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THE LABOR SUPPLY OF SINGLE MOTHERS

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Group (ORG) data. During each interview household members are asked whether they worked last week and their hours worked, as well as many other questions. In the March inter- views, individuals are asked to provide detailed retrospective information including hours, earnings, and weeks worked during the previous year. The ORG les come from all twelve months of the year but only include the same person once in a given year. The March CPS data are from the 1985–1997 interviews, and therefore provide information on the years 1984 –1996. The ORG data are from 1984 –1996. We limit the sample to single women (widowed, divorced, and never married) who are between 19 and 44 years old and not in school. In the March CPS, women who were ill or disabled during the previous year or who had positive earned income but zero hours of work are also excluded. The resulting samples sizes are 373,662 for the ORG and 119,019 for the March CPS.

IV. THE POLICY CHANGES AND LABOR SUPPLY

In this section we describe the major policy changes between 1984 and 1996 that affected the labor supply of single mothers. For each policy or program, we rst provide some brief back- ground information and outline the major changes between 1984 and 1996 (see Figure I for a time line depicting these changes). Next, we describe the policy variables used in the empirical work to summarize the incentive effects of these programs. Finally, we analyze the theoretical effects of these changes on labor supply, especially on the choice of whether or not to work. An in-depth discussion of the policy changes is in Meyer and Rosenbaum [2000a].

A. The EITC and Federal and State Income Taxes

In our period the most important changes in work incentives for single mothers probably came from the Earned Income Tax Credit.11 EITC credits increased fteenfold from $1.6 billion in 1984 to a projected $25.1 billion in 1996. Single parents received about two-thirds of these EITC dollars (see U. S. House of Rep- resentatives, Green Book [1996]; U. S. Department of the Trea- sury, SOI [1999]). In 1996 a single woman with two children who

11. See Liebman [1998] for a history of the EITC and a survey of many of the key economic issues.

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