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Welfare Reform and Labor Participation: Are There Urban and Rural Differences?

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  • Pan, Suwen
  • Fuller, Wayne A.
  • Jensen, Helen H.

Abstract

Although welfare reform began in 1996 at the national level, Iowa was one of the earliest states to obtain a waiver to initiate the Iowa Family Investment Program (FIP) in 1993. To gain a better understanding of welfare recidivism, we use Iowa administrative quarterly data between October1993 and September 1995, impute the education attainment for the caseheads with missing education attainment using fractional imputation and study the factors that affect the probability of working, the potential wage for the caseheads and the possibility of leaving FIP based on the potential wage. We find higher education (i.e. higher skills) leads to higher labor force participation, especially for single-mothers with children. Metro or urban location is associated with the probability of working and potential wage earnings, but has no effect on FIP participation. The local unemployment rate does not affect labor participation of low-income individuals, but does affect the potential wage and FIP status. Those with lower education, and nonwhites are more affected by the local labor market environment than others. If an individual moves once in a year, he or she will earn more money than in the original job; no gains are achieved through moving more than once. The possibility of leaving FIP is relatively high if there is only one move.

Suggested Citation

  • Pan, Suwen & Fuller, Wayne A. & Jensen, Helen H., 2001. "Welfare Reform and Labor Participation: Are There Urban and Rural Differences?," 2001 Annual meeting, August 5-8, Chicago, IL 20665, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  • Handle: RePEc:ags:aaea01:20665
    DOI: 10.22004/ag.econ.20665
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    References listed on IDEAS

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    1. Note: For best results & the figures should be printed on a non-Postscript printer. Hoynes & H., "undated". "The Employment, Earnings, and Income of Less-Skilled Workers over the Business Cycle," Institute for Research on Poverty Discussion Papers 1199-99, University of Wisconsin Institute for Research on Poverty.
    2. Helen H. Jensen & Shao-Hsun Keng & Steven B. Garasky, 2000. "Location and the Low Income Experience: Analyses of Program Dynamics in the Iowa Family Investment Program," Center for Agricultural and Rural Development (CARD) Publications 00-wp244, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    3. repec:mpr:mprres:1934 is not listed on IDEAS
    4. Robert H. Topel & Michael P. Ward, 1992. "Job Mobility and the Careers of Young Men," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 439-479.
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