Premium
Does it pay to move from welfare to work? A comment on Danziger, Heflin, Corcoran, Oltmans, and Wang
Author(s) -
Moffitt Robert,
Winder Katie
Publication year - 2005
Publication title -
journal of policy analysis and management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.898
H-Index - 84
eISSN - 1520-6688
pISSN - 0276-8739
DOI - 10.1002/pam.20095
Subject(s) - citation , welfare , library science , sociology , work (physics) , computer science , political science , law , engineering , mechanical engineering
In a recent paper in this Journal, Danziger, Heflin, Corcoran, Oltmans and Wang reported data from a sample of welfare recipients in Michigan suggesting that leaving welfare for work results in a large income gain. In this Comment, we offer data from the Three-City Study suggesting that the magnitude,of the income,gains found in Michigan is very sensitive to the presence and magnitude,of income of other family members. The income gains from leaving welfare are much smaller in the three cities becauseof smaller amounts,of this form of income. The Three-City data also show that most of the income gains from leaving welfare for work could be achieved by staying on welfare and working. The Michigan study again differs from this finding because those who leave welfare in Michigan, even if they were working while on the rolls, experience large gains in income of other family members, so that leaving welfare per se is quantitatively more important. Finally, we find that the overall gain from leaving welfare in the Three-City data is quite modest, and possibly negative, when the presence and risk of nonemployment,is accounted for. The findings have significant policy implications. In a recent article in this journal, Danzigeret al. (2002) reported findings from a study of welfare recipients in Michigan who have been followed over time as they either stayed on welfare or left, and either went to work or stayed nonemployed. Danziger et al. reported that the difference in monthly income between “wage reliant” mothers who had left welfare and were working, and “welfare reliant” mothers who had stayed on welfare and were not working, is $635, equivalent to a large 63 percent gain. Compared to many panel studies of welfare recipients, the Michigan study has the advantage of having comprehensive measures of all income types in the household, not just wage and welfare income obtainable from administrative records as is the case in the majority of other studies. In this Comment, we report findings from a study of welfare recipients in three cities