Welfare, the Earned Income Tax Credit, and the Labor Supply of Single Mothers

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ISBN 13 :
Total Pages : 80 pages
Book Rating : 4.:/5 (321 download)

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Book Synopsis Welfare, the Earned Income Tax Credit, and the Labor Supply of Single Mothers by : Bruce D. Meyer

Download or read book Welfare, the Earned Income Tax Credit, and the Labor Supply of Single Mothers written by Bruce D. Meyer and published by . This book was released on 1999 with total page 80 pages. Available in PDF, EPUB and Kindle. Book excerpt: During 1984-96, welfare and tax policy changed dramatically. The Earned Income Tax Credit was expanded, welfare benefits were cut, welfare time limits were added and cases were terminated, Medicaid for the working poor was expanded, training programs were redirected, and subsidized or free child care was expanded. Many of the program changes were intended to encourage low income women to work. During this same time period there were unprecedented increases in the employment and hours of single mothers, particularly those with young children. In this paper, we first document these large changes in policies and employment. We then examine if the policy changes are the reason for the large increases in single mothers' labor supply. We find evidence that a large share of the increase in work by single mothers can be attributed to the EITC, with smaller shares for welfare benefit reductions, welfare waivers, changes in training programs, and child care expansions. We also find that most of these policies increased hours worked. Our results indicate that financial incentives through the tax and welfare systems have substantial effects on single mothers' labor supply decisions.

Welfare, the earned income credit and the labor supply of single mothers

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ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (111 download)

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Book Synopsis Welfare, the earned income credit and the labor supply of single mothers by : Bruce D. Meyer

Download or read book Welfare, the earned income credit and the labor supply of single mothers written by Bruce D. Meyer and published by . This book was released on 1999 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Nonparametric Estimation of Labor Supply Under the Earned Income Tax Credit and Welfare Programs

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ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)

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Book Synopsis Nonparametric Estimation of Labor Supply Under the Earned Income Tax Credit and Welfare Programs by : Ximing Wu

Download or read book Nonparametric Estimation of Labor Supply Under the Earned Income Tax Credit and Welfare Programs written by Ximing Wu and published by . This book was released on 2010 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the effect of the Earned Income Tax Credit (EITC) and welfare programs on the labor supply of single mothers. The EITC consists of an earning subsidy program in the form of marginal tax credits to the working poor. The presence of different marginal tax rates at the various earning levels makes the recipients' budget constraint a non-linear function of hours worked. Correspondingly, I estimate a flexible nonparametric labor supply function, taking full account of the nonlinear budget constraint. I then simulate the impact of each program component and their combined impact on hours. Contrary to the standard assumption of constant policy effect, I show that the EITC effect is heterogenous. An expansion of the EITC increases the hours of poor single mothers whose tax credits increase with earnings, while it decreases the hours of those not so poor whose tax credits decrease with earnings. These two effects cancel out, which explains why previous studies, focusing on the average treatment effect, found that the EITC substantially increased the participation, but had little net effects on the average hours worked. I also find that the recent EITC expansion and welfare reform worked together to significantly increase the hours worked by single mothers. Moreover, despite its disincentive effect on part of the population, the EITC improved the family income for all affected groups.

Making Work Pay

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Publisher : Russell Sage Foundation
ISBN 13 : 1610443942
Total Pages : 413 pages
Book Rating : 4.6/5 (14 download)

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Book Synopsis Making Work Pay by : Bruce D. Meyer

Download or read book Making Work Pay written by Bruce D. Meyer and published by Russell Sage Foundation. This book was released on 2002-01-10 with total page 413 pages. Available in PDF, EPUB and Kindle. Book excerpt: Since its inception under President Ford in 1975, the Earned Income Tax Credit (EITC) has become the largest antipoverty program for the non-elderly in the United States. In 1998, more than nineteen million families received EITC payments, and the program lifted over four million Americans above the poverty line. Despite the rapid growth of the EITC throughout the 1990s, little has been written about how the program works or how it affects low-income families. Making Work Pay provides the first full-scale examination of the EITC, exploring its effects on income distribution, poverty, work, and marriage. Making Work Pay opens with a history of the EITC—its emergence in the 1970s as a pro-work, low-cost antipoverty program and its expansion through the 1980s and 1990s. The central chapters in the volume look at the substantial impact of the EITC on work incentives in recent years and show that the program, in combination with welfare reform and a strong economy, has led to an unprecedented increase in the employment of single mothers. In one study, researchers conclude that the EITC—with its stipulation that one family member be a wage earner—was the most important change in work incentives for single mothers between 1984 and 1996, a period when the employment rate of single mothers rose sharply. Several chapters outline proposals for reforming the program, addressing the concerns by policymakers about the work disincentives that rise as benefits fall with increasing income. Finally, Making Work Pay examines how EITC recipients view the credit and what they do with it once they get it. The contributors find that not only does EITC's lump-sum payment increase consumption but it also allows recipients to make changes in economic status. Many families use the end-of-the-year payment as a form of forced savings, enabling them to save for home improvement, a new car, or other purchases to improve their lives, and providing the extra economic cushion needed to move beyond mere day-to-day survival. Comprehensive in scope, Making Work Pay is an indispensable resource for policymakers, administrators, and researchers seeking to understand the ramifications of the country's largest programs for aiding the working poor.

Labor Supply Response to the Earned Income Tax Credit

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ISBN 13 :
Total Pages : 72 pages
Book Rating : 4.:/5 (321 download)

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Book Synopsis Labor Supply Response to the Earned Income Tax Credit by : Nada Eissa

Download or read book Labor Supply Response to the Earned Income Tax Credit written by Nada Eissa and published by . This book was released on 1995 with total page 72 pages. Available in PDF, EPUB and Kindle. Book excerpt: In a series of major expansions starting in 1987, the earned income tax credit (EITC) has become a central part of the federal government's anti-poverty strategy. In this paper, we examine the impact of the Tax Reform Act of 1986 (TRA86), which included an expansion of the EITC, on labor force participation and hours of work. The expansion of the credit affected an easily identifiable group, single women with children, but is predicted to have had no effect on another group, single women without children. Other features of TRA86, such as the increase in the value of dependent exemptions and the large increase in the standard deduction for head of household filers, are predicted by economic theory to have reinforced the impact of the EITC on the relative labor supply outcomes of single women with and without children. We therefore compare the change in labor supply of single women with children to the change in labor supply of single women without children. We find that between 1984-1986 and 1988-1989 single women with children increased their labor force participation by 1.4 percentage points (from a base of 73.1 percent) relative to single women without children. We explore a number of possible explanations for this finding and conclude that the 1987 expansion of the EITC and the other provisions of TRA86 are the most likely explanations. We find no effect of the EITC expansion on the hours of work of single women with children who were already in the labor force. Compared to other elements of the welfare system, the EITC appears to produce little distortion of work incentives.

The Effect of Child Care Costs on the Labor Force Participation and Welfare Recipiency of Single Mothers

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ISBN 13 :
Total Pages : 68 pages
Book Rating : 4.E/5 ( download)

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Book Synopsis The Effect of Child Care Costs on the Labor Force Participation and Welfare Recipiency of Single Mothers by : Rachel Ex Connelly

Download or read book The Effect of Child Care Costs on the Labor Force Participation and Welfare Recipiency of Single Mothers written by Rachel Ex Connelly and published by . This book was released on 2001 with total page 68 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Making Ends Meet

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Publisher : Russell Sage Foundation
ISBN 13 : 1610441753
Total Pages : 338 pages
Book Rating : 4.6/5 (14 download)

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Book Synopsis Making Ends Meet by : Kathryn Edin

Download or read book Making Ends Meet written by Kathryn Edin and published by Russell Sage Foundation. This book was released on 1997-04-17 with total page 338 pages. Available in PDF, EPUB and Kindle. Book excerpt: Welfare mothers are popularly viewed as passively dependent on their checks and averse to work. Reformers across the political spectrum advocate moving these women off the welfare rolls and into the labor force as the solution to their problems. Making Ends Meet offers dramatic evidence toward a different conclusion: In the present labor market, unskilled single mothers who hold jobs are frequently worse off than those on welfare, and neither welfare nor low-wage employment alone will support a family at subsistence levels. Kathryn Edin and Laura Lein interviewed nearly four hundred welfare and low-income single mothers from cities in Massachusetts, Texas, Illinois, and South Carolina over a six year period. They learned the reality of these mothers' struggles to provide for their families: where their money comes from, what they spend it on, how they cope with their children's needs, and what hardships they suffer. Edin and Lein's careful budgetary analyses reveal that even a full range of welfare benefits—AFDC payments, food stamps, Medicaid, and housing subsidies—typically meet only three-fifths of a family's needs, and that funds for adequate food, clothing and other necessities are often lacking. Leaving welfare for work offers little hope for improvement, and in many cases threatens even greater hardship. Jobs for unskilled and semi-skilled women provide meager salaries, irregular or uncertain hours, frequent layoffs, and no promise of advancement. Mothers who work not only assume extra child care, medical, and transportation expenses but are also deprived of many of the housing and educational subsidies available to those on welfare. Regardless of whether they are on welfare or employed, virtually all these single mothers need to supplement their income with menial, off-the-books work and intermittent contributions from family, live-in boyfriends, their children's fathers, and local charities. In doing so, they pay a heavy price. Welfare mothers must work covertly to avoid losing benefits, while working mothers are forced to sacrifice even more time with their children. Making Ends Meet demonstrates compellingly why the choice between welfare and work is more complex and risky than is commonly recognized by politicians, the media, or the public. Almost all the welfare-reliant women interviewed by Edin and Lein made repeated efforts to leave welfare for work, only to be forced to return when they lost their jobs, a child became ill, or they could not cover their bills with their wages. Mothers who managed more stable employment usually benefited from a variety of mitigating circumstances such as having a relative willing to watch their children for free, regular child support payments, or very low housing, medical, or commuting costs. With first hand accounts and detailed financial data, Making Ends Meet tells the real story of the challenges, hardships, and survival strategies of America's poorest families. If this country's efforts to improve the self-sufficiency of female-headed families is to succeed, reformers will need to move beyond the myths of welfare dependency and deal with the hard realities of an unrewarding American labor market, the lack of affordable health insurance and child care for single mothers who work, and the true cost of subsistence living. Making Ends Meet is a realistic look at a world that so many would change and so few understand.

Helping Working Families

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Publisher : W.E. Upjohn Institute
ISBN 13 : 0880992549
Total Pages : 247 pages
Book Rating : 4.8/5 (89 download)

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Book Synopsis Helping Working Families by : Saul D. Hoffman

Download or read book Helping Working Families written by Saul D. Hoffman and published by W.E. Upjohn Institute. This book was released on 2003 with total page 247 pages. Available in PDF, EPUB and Kindle. Book excerpt: Gives an overview of the EITC and makes recommendations for changes.

The Impact of the Earned Income Tax Credit and Social Policy Reforms on Work, Marriage, and Living Arrangements

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ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)

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Book Synopsis The Impact of the Earned Income Tax Credit and Social Policy Reforms on Work, Marriage, and Living Arrangements by : David T. Ellwood

Download or read book The Impact of the Earned Income Tax Credit and Social Policy Reforms on Work, Marriage, and Living Arrangements written by David T. Ellwood and published by . This book was released on 2010 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This article examines the impact of the recent dramatic changes in the social policies, particularly the expansion of the EITC and Welfare reform on labor supply, marriage, and cohabitation. Altered policies have increased incentives to work or marry for some, diminished incentives for others. The results strongly indicate expanded work by single mothers and reductions of work by married mothers in accordance with their changed incentives. By contrast, estimated impacts on marriage are small and ambiguous, though modest changes in cohabitation in the predicted direction suggest that impact on family structure might become more apparent in the future.

Advance Earned Income Tax Credit

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ISBN 13 :
Total Pages : 2 pages
Book Rating : 4.:/5 (3 download)

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Book Synopsis Advance Earned Income Tax Credit by : United States. Internal Revenue Service

Download or read book Advance Earned Income Tax Credit written by United States. Internal Revenue Service and published by . This book was released on 1994 with total page 2 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Labor Supply Response to the Elimination of the EITC for Undocumented Immigrants

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ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)

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Book Synopsis Labor Supply Response to the Elimination of the EITC for Undocumented Immigrants by : Sakshi Bhardwaj

Download or read book Labor Supply Response to the Elimination of the EITC for Undocumented Immigrants written by Sakshi Bhardwaj and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper examines the labor market effects of ending the Earned Income Tax Credit (EITC) for undocumented immigrants by requiring a Social Security number to claim the EITC. Exploiting variation across the number of children of undocumented single women, the timing of the policy, and a placebo group of undocumented married men shows that ending the EITC reduced the labor force participation of undocumented single mothers by 7 percentage points. The results suggest that ending the EITC for undocumented immigrants makes the American children of single-mother undocumented immigrants doubly disadvantaged because they not only lack a tax credit but their mothers' labor supply is also reduced as a result.

The Impact of the Earned Income Tax Credit on Poverty, Labor Supply, and Human-capital Accumulation

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Publisher :
ISBN 13 :
Total Pages : 444 pages
Book Rating : 4.3/5 (129 download)

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Book Synopsis The Impact of the Earned Income Tax Credit on Poverty, Labor Supply, and Human-capital Accumulation by : Scott B. Darragh

Download or read book The Impact of the Earned Income Tax Credit on Poverty, Labor Supply, and Human-capital Accumulation written by Scott B. Darragh and published by . This book was released on 2002 with total page 444 pages. Available in PDF, EPUB and Kindle. Book excerpt:

It's Not Like I'm Poor

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Publisher : Univ of California Press
ISBN 13 : 0520959221
Total Pages : 299 pages
Book Rating : 4.5/5 (29 download)

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Book Synopsis It's Not Like I'm Poor by : Sarah Halpern-Meekin

Download or read book It's Not Like I'm Poor written by Sarah Halpern-Meekin and published by Univ of California Press. This book was released on 2015-01-14 with total page 299 pages. Available in PDF, EPUB and Kindle. Book excerpt: The world of welfare has changed radically. As the poor trade welfare checks for low-wage jobs, their low earnings qualify them for a hefty check come tax time—a combination of the earned income tax credit and other refunds. For many working parents this one check is like hitting the lottery, offering several months’ wages as well as the hope of investing in a better future. Drawing on interviews with 115 families, the authors look at how parents plan to use this annual cash windfall to build up savings, go back to school, and send their kids to college. However, these dreams of upward mobility are often dashed by the difficulty of trying to get by on meager wages. In accessible and engaging prose, It’s Not Like I’m Poor examines the costs and benefits of the new work-based safety net, suggesting ways to augment its strengths so that more of the working poor can realize the promise of a middle-class life.

Making the Work-Based Safety Net Work Better

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Publisher : Russell Sage Foundation
ISBN 13 : 1610446445
Total Pages : 361 pages
Book Rating : 4.6/5 (14 download)

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Book Synopsis Making the Work-Based Safety Net Work Better by : Carolyn J. Heinrich

Download or read book Making the Work-Based Safety Net Work Better written by Carolyn J. Heinrich and published by Russell Sage Foundation. This book was released on 2009-06-02 with total page 361 pages. Available in PDF, EPUB and Kindle. Book excerpt: Work first. That is the core idea behind the 1996 welfare reform legislation. It sounds appealing, but according to Making the Work-Based Safety Net Work Better, it collides with an exceptionally difficult reality. The degree to which work provides a way out of poverty depends greatly on the ability of low-skilled people to maintain stable employment and make progress toward an income that provides an adequate standard of living. This forward-looking volume examines eight areas of the safety net where families are falling through and describes how current policies and institutions could evolve to enhance the self-sufficiency of low-income families. David Neumark analyzes a range of labor market policies and finds overwhelming evidence that the minimum wage is ineffective in promoting self-sufficiency. Neumark suggests the Earned Income Tax Credit is a much more promising policy to boost employment among single mothers and family incomes. Greg Duncan, Lisa Gennetian, and Pamela Morris find no evidence that encouraging parents to work leads to better parenting, improved psychological health, or more positive role models for children. Instead, the connection between parental work and child achievement is linked to parents' improved access to quality child care. Rebecca Blank and Brian Kovak document an alarming increase in the number of single mothers who receive neither wages nor public assistance and who are significantly more likely to suffer from medical problems of their own or of a child. Time caps and work hour requirements embedded in benefits policies leave some mothers unable to work and ineligible for cash benefits. Marcia Meyers and Janet Gornick identify another gap: low-income families tend to lose financial support and health coverage long before they earn enough to access employer-based benefits and tax provisions. They propose building "institutional bridges" that minimize discontinuities associated with changes in employment, earnings, or family structure. Steven Raphael addresses a particularly troubling weakness of the work-based safety net—its inadequate provision for the large number of individuals who are or were incarcerated in the United States. He offers tractable suggestions for policy changes that could ease their transition back into non-institutionalized society and the labor market. Making the Work-Based Safety Net Work Better shows that the "work first" approach alone isn't working and suggests specific ways the social welfare system might be modified to produce greater gains for vulnerable families.

The Labor Supply and Child Care Demand of Single Mothers in the Seattle and Denver Income Maintenance Experiments

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Publisher :
ISBN 13 :
Total Pages : 96 pages
Book Rating : 4.E/5 ( download)

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Book Synopsis The Labor Supply and Child Care Demand of Single Mothers in the Seattle and Denver Income Maintenance Experiments by : Carlton E. Munson

Download or read book The Labor Supply and Child Care Demand of Single Mothers in the Seattle and Denver Income Maintenance Experiments written by Carlton E. Munson and published by . This book was released on 1980 with total page 96 pages. Available in PDF, EPUB and Kindle. Book excerpt:

The Effects of Welfare Reform and Related Policies on Single Mothers' Welfare Use and Employment

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ISBN 13 :
Total Pages : 74 pages
Book Rating : 4.E/5 ( download)

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Book Synopsis The Effects of Welfare Reform and Related Policies on Single Mothers' Welfare Use and Employment by : Adam Looney

Download or read book The Effects of Welfare Reform and Related Policies on Single Mothers' Welfare Use and Employment written by Adam Looney and published by . This book was released on 2005 with total page 74 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines how changes in tax policy, welfare programs, public health insurance, and economic conditions during the 1990s affected welfare use and employment among single mothers. Drawing on panel data from the Survey of Income and Program Participation, I give new estimates of the effects of specific policy changes and use those estimates to explain changes in economic behavior. The results suggest that Welfare Reform policies, the EITC, and improved economic conditions, in that order, were the primary determinants of changes in welfare use and employment between 1993 and 1999.

From Welfare to Work

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Publisher : Russell Sage Foundation
ISBN 13 : 161044258X
Total Pages : 335 pages
Book Rating : 4.6/5 (14 download)

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Book Synopsis From Welfare to Work by : Judith M. Gueron

Download or read book From Welfare to Work written by Judith M. Gueron and published by Russell Sage Foundation. This book was released on 1991-08-29 with total page 335 pages. Available in PDF, EPUB and Kindle. Book excerpt: From Welfare to Work appears at a critical moment, when all fifty states are wrestling with tough budgetary and program choices as they implement the new federal welfare reforms. This book is a definitive analysis of the landmark social research that has directly informed those choices: the rigorous evaluation of programs designed to help welfare recipients become employed and self-sufficient. It discusses forty-five past and current studies, focusing on the series of seminal evaluations conducted by the Manpower Demonstration Research Corporation over the last fifteen years. Which of these welfare-to-work programs have worked? For whom and at what cost? In answering these key questions, the authors clearly delineate the trade-offs facing policymakers as they strive to achieve the multiple goals of alleviating poverty, helping the most disadvantaged, curtailing dependence, and effecting welfare savings. The authors present compelling evidence that the generally low-cost, primarily job search-oriented programs of the late 1980s achieved sustained earnings gains and welfare savings. However, getting people out of poverty and helping those who are most disadvantaged may require some intensive, higher-cost services such as education and training. The authors explore a range of studies now in progress that will address these and other urgent issues. They also point to encouraging results from programs that were operating in San Diego and Baltimore, which suggest the potential value of a mixed strategy: combining job search and other low-cost activities for a broad portion of the caseload with more specialized services for smaller groups. Offering both an authoritative synthesis of work already done and recommendations for future innovation, From Welfare to Work will be the standard resource and required reading for practitioners and students in the social policy, social welfare, and academic communities.