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THE LABOR SUPPLY OF SINGLE MOTHERS

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welfare. We rely on less subjective measures of welfare waivers such as implementation dates and the beginning of case termi- nations and provide the rst evidence on the effects of waivers on employment. Unlike most past work, we examine the major pro- grams affecting single mothers together, nding that examining one or two programs in isolation can lead to biases in estimated behavioral effects.

In most of our specications identication comes from the differences in incentives faced by single women with and without children. While we argue that single women without children are a plausible comparison group, we also provide estimates that do not rely on this comparison. Instead, these estimates rely on changes in the treatment of family size, state cost of living dif- ferences, changes in state income taxes, differences in earnings disregards and implicit tax rates across states, and changes in these parameters and welfare benets within a state over time. Our nding of large tax and welfare effects on employment are robust, although tax effects and especially welfare effects are sometimes smaller using alternative identication strategies.

Our result that the EITC played a dominant role in the employment increases of single mothers between 1984 and 1996 suggests that policies that “make work pay” are effective in in- creasing work by single mothers. This lesson is important in light of the emphasis on punitive measures, such as time limits and work requirements, in the most recent welfare reforms.

APPENDIX 1: DESCRIPTION OF POLICY VARIABLES

This section describes the construction of our policy variables and lists our information sources. First, we begin with the as- sumptions that we use to determine taxes, program participation, and benet levels. 1. The determination of whether a woman has children and how many she has is based on the CPS family and sub- family denitions. Children in primary families (both re- lated and unrelated) are assigned to the family head, while children in subfamilies are assigned to the subfam- ily head rather than to the primary family head. Children are dened as any member of the given family (primary or subfamily) under age 19 (or under 24 and a full-time student) for EITC purposes and under age 18 for all other programs.

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