Title

Regional welfare program and labour force participation

Campus Units

Economics, Center for Agricultural and Rural Development

Document Type

Article

Publication Version

Submitted Manuscript

Publication Date

6-2007

Journal or Book Title

Papers in Regional Science

Volume

86

Issue

2

First Page or Article ID Number

215

Last Page

239

DOI

10.1111/j.1435-5957.2007.00120.x

Abstract

This paper investigates regional variations in household welfare program and labour force participation behaviour in the United States. A choice-theoretic model is developed and estimated for each of the major census regions (Northeast, Midwest, South and West) using cross-section data on households, labour markets, and state policies. We show how the observable heterogeneity across U.S. census regions explains different welfare program participation and workforce outcomes. We find little evidence of differences in behaviour with respect to welfare program policies across regions. This finding undermines some of the efficiency rationale for the devolution of authority over welfare programs to the states. We also find evidence that welfare program participation still reduces labour supply in some regions. That finding supports the incentive rationale for the imposition of work requirements.

JEL Classification

H53, J21, R23

Comments

This is a working paper of an article from Papers in Regional Science 86 (2007): 215, doi: 10.1111/j.1435-5957.2007.00120.x.