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THE LABOR SUPPLY OF SINGLE MOTHERS

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Meyer and Rosenbaum [1999] for more details). Difference-in- differences estimates for hours analogous to those in Table II show large relative increases in work for single mothers over the sample period, with almost all of the change occurring after 1991. We also estimated a series of Tobit and OLS regressions to determine the effects of tax and welfare policy on hours, controlling for demographics, economic conditions, state, and year. We in- clude the same variables as we did in Tables IV and V, although we should emphasize that these variables were constructed for our structural model of employment and so are less suitable for an analysis of hours. The effects of the policy variables in the Tobit estimates for all women whether or not they work tend to be similar to the effects on employment seen in the earlier tables. These results hold for the sample of single mothers as well as for all single women. The results are very similar for hours per year in the March CPS and hours in a typical week in the ORG. For hours worked conditioning on positive hours, the policy variables tend to have much the same signs, but smaller and less signi- cant coefcients. Overall, the results tend to conrm the results for the main policy variables that we found in the employment probits.

VII. WHICH POLICIES ACCOUNTED FOR THE EMPLOYMENT CHANGES?

Our simultaneous examination of many government policies makes it straightforward to estimate the relative contribution of these policies to the recent increase in employment of single mothers. In Table VI we decompose the employment increases for single mothers relative to single women without children for both the entire period (1984 –1996) and the recent period of rapid employment growth (1992–1996). Overall, these decompositions indicate a large role for the EITC and other tax changes, modest roles for AFDC benet cuts and waivers, and smaller roles for Medicaid, training, and child care increases.

Using the parameter estimates from our main specications (specications (1) and (5) of Table IV), the EITC explains 62 percent of the increase in weekly employment over the full 1984 to 1996 period, yet only 27 percent of the increase between 1992 and 1996. For annual employment, the EITC plays a very similar role, explaining 61 percent of the 1984 to 1996 increase and 35 percent of the 1992 to 1996 increase. The corresponding changes in employment attributed to the EITC over the full 1984 to 1996

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