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1082

QUARTERLY JOURNAL OF ECONOMICS

state and federal expenditures on these four new federal pro- grams by state and year are scaled by the number of single mothers with children under six. These numbers can be seen in Table I, which shows a steep rise in child care expenditures between 1988 and 1992, followed by a slower rise in later years. For more detail on training and child care programs, see Meyer and Rosenbaum [1999].

V. THE DETERMINANTS OF EMPLOYMENT

We use several different econometric methods to identify the impact of the recent policy changes on the employment of single mothers. We begin with the familiar difference in differences estimator. This approach compares employment rates over time for single mothers with those for single women without children. This approach is the one taken by Eissa and Liebman [1996] in their study of the EITC over the 1984 to 1990 period. We wait until Section VI to discuss the estimates from our simple struc- tural model.

A. Employment Rates of Single Mothers and Single Childless Women

The top panel of Table II reports the employment rates of single mothers and single women without children, along with the difference in employment rates between these two groups of single women. We report this difference, because many determi- nants of employment that change over time, especially wages and macroeconomic conditions, might be expected to affect all single women similarly. Other determinants of employment, particu- larly the tax and transfer programs that we examine, speciÓĀćcally affect single mothers. The bottom panel of Table II focuses on the subsample of single mothers with children under six (again rela- tive to single women without children), a group we expect to be more responsive to changes in the rewards to work. Also, employ- ment changes are likely to have greater effects on children, for better or worse, when they are young and their mother likely plays a larger role in their care and education.

We report two different measures of employment: whether a woman worked last week (from the ORG data) and whether a woman worked at all last year (from the March data). Each measure has its advantages. Whether a woman worked last week is probably a better measure of labor supply to use as an input to

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