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Quasi‐Experimental Evidence on the Effects of Expanding Cash Welfare

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  • Matthew Freedman
  • Yoonjung Kim

Abstract

We study the labor supply and consumption responses to cash assistance delivered through the Temporary Assistance to Needy Families (TANF) program in the United States. Exploiting a sharp increase in cash benefit generosity for low‐income single‐parent families in New Hampshire due to a legislative revision to payment calculations, we implement difference‐in‐differences and triple‐differences to estimate the impacts of greater benefits on work behavior as well as on food expenditures and food security. Our results suggest that more generous cash assistance reduces labor supply among likely TANF‐eligible individuals. At the same time, greater cash benefits increase household food spending and reduce the incidence of food insecurity. Our findings speak to individual and family responses to expanded cash assistance in an era in which cash welfare is at historically low levels, is time limited, and imposes work requirements.

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  • Matthew Freedman & Yoonjung Kim, 2022. "Quasi‐Experimental Evidence on the Effects of Expanding Cash Welfare," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 41(3), pages 859-890, June.
    • Handle: RePEc:wly:jpamgt:v:41:y:2022:i:3:p:859-890
    DOI: 10.1002/pam.22388
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    1. Natasha Pilkauskas & Katherine Michelmore & Nicole Kovski & H. Luke Shaefer, 2022. "The Effects of Income on the Economic Wellbeing of Families with Low Incomes: Evidence from the 2021 Expanded Child Tax Credit," NBER Working Papers 30533, National Bureau of Economic Research, Inc.

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