The Impact of Earnings Disregards on the Behavior of Low Income Families

62 Pages Posted: 2 Jun 2008 Last revised: 12 May 2021

See all articles by Jordan D. Matsudaira

Jordan D. Matsudaira

Cornell University - Department of Policy Analysis and Management

Rebecca M. Blank

U.S. Department of Commerce

Date Written: May 2008

Abstract

This paper investigates the impact of changes in earnings disregards for welfare assistance received by single mothers following welfare reform in 1996. Some states adopted much higher earnings disregards (women could work full time and still receive welfare), while other states did not. We explore the effect of these changes on women's labor supply and income using several data sources and multiple estimation strategies. Our results indicate these changes had little effect on labor supply or income. We show this is because few women used these earnings disregards. This is surprising and we discuss why this might occur.

Suggested Citation

Matsudaira, Jordan D. and Blank, Rebecca M., The Impact of Earnings Disregards on the Behavior of Low Income Families (May 2008). NBER Working Paper No. w14038, Available at SSRN: https://ssrn.com/abstract=1139354

Jordan D. Matsudaira

Cornell University - Department of Policy Analysis and Management ( email )

Ithaca, NY 14853
United States

Rebecca M. Blank (Contact Author)

U.S. Department of Commerce ( email )

1401 Constitution Ave, N.W.
Rm 5838, HCHB
Washington, DC 20230
United States
202-482-3727 (Phone)

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