RT Journal Article
SR Electronic
T1 Measuring the Effects of Welfare Time Limits
JF Journal of Human Resources
JO J Hum Resour
FD University of Wisconsin Press
SP 0814-6554R2
DO 10.3368/jhr.53.1.0814-6554R2
A1 Marc K. Chan
YR 2016
UL http://jhr.uwpress.org/content/early/2016/11/01/jhr.53.1.0814-6554R2.abstract
AB This paper develops a simple regression model that incorporates the behavioral dynamics of time limits and is estimable by panel data techniques. By relating this model to reduced-form analysis, I clarify an implicit assumption that underlies a popular difference-in-differences (DID) specification, which understates the overall effects of time limits. I also find that a considerable amount of dynamics is due to individuals reducing welfare use, as their stock of remaining welfare eligibility depletes. This generates more plausible predictions related to counterfactuals, cumulative welfare use patterns, and mechanical termination of benefits.