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Welfare Reform And Children'S Early Cognitive Development

Author

Listed:
  • HAU CHYI
  • ORGUL DEMET OZTURK
  • WEILONG ZHANG

Abstract

type="main" xml:lang="en"> In this paper, we use a dynamic structural model to measure the effects of (1) single mothers' work and welfare use decisions and (2) welfare reform initiatives on the early cognitive development of the children of the NLSY79 mothers. We use PIAT-Math scores as a measure of attainment and show that both the mothers' work and welfare use benefit children on average. Our simulation of a policy that combines a time limit with work requirement reduces the use of welfare and increases employment significantly. These changes in turn significantly increase children's cognitive attainment. This implies that the welfare reform was not only successful in achieving its stated goals, but was also beneficial to welfare children's outcomes. In another policy simulation, we show that increasing work incentives for welfare population by exempting labor income from welfare tax can be a very successful policy with some additional benefits for children's outcomes. Finally, a counterfactual with an extended maternal leave policy significantly reduces employment and has negative, though economically insignificant, impact on cognitive outcomes. (JEL I38, J22, J18)

Suggested Citation

  • Hau Chyi & Orgul Demet Ozturk & Weilong Zhang, 2014. "Welfare Reform And Children'S Early Cognitive Development," Contemporary Economic Policy, Western Economic Association International, vol. 32(4), pages 729-751, October.
    • Handle: RePEc:bla:coecpo:v:32:y:2014:i:4:p:729-751
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    More about this item

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy

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