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Separating Psychological Costs from Time Costs: Female Labor Supply and Participation in Food Stamps and WIC

Author

Listed:
  • Colleen Flaherty

    (Department of Economics, Stanford University)

  • Kevin Mumford

    (Department of Economics, Stanford University)

Abstract

Many individuals who are eligible for welfare choose not to participate. This well-documented fact suggests that there is a utility cost associated with welfare participation. Previous studies have produced estimates of how large this cost would have to be to explain the observed degree of non-participation. Prior estimates of this utility cost have not differentiated psychological costs of participation from the time and effort required to become eligible and maintain eligibility (time costs). This paper develops a structural model that allows for the separate estimation of these two types of costs associated with welfare participation in dollar terms. The estimation suggests that psychological costs are three times larger than the time costs of welfare participation.

Suggested Citation

  • Colleen Flaherty & Kevin Mumford, 2007. "Separating Psychological Costs from Time Costs: Female Labor Supply and Participation in Food Stamps and WIC," Discussion Papers 06-024, Stanford Institute for Economic Policy Research.
    • Handle: RePEc:sip:dpaper:06-024
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    References listed on IDEAS

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    5. V. Joseph Hotz, 2003. "The Earned Income Tax Credit," NBER Chapters, in: Means-Tested Transfer Programs in the United States, pages 141-198, National Bureau of Economic Research, Inc.
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    More about this item

    Keywords

    welfare; psychological cost; time cost;
    All these keywords.

    JEL classification:

    • I39 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Other

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