Welfare Policy and Welfare Spells: Evidence from New York State during the Great Recession
*Names in bold indicate Presenter
A key concern in welfare program design is the economic dependency induced when benefits are increased or the costs to participation are reduced. Such dependency, indicated by long spells, may lead to a depreciation of human capital, and a reduced likelihood of finding a job.
Most of what we know about the effects of welfare programs in the U.S.A dates from the PWORA Act of 1996 or earlier. Little research has been done using data from the post-welfare reform period, despite important economic changes including the Great Recession of the late 2000s. In the case of the FSP, enrollment has risen sharply recently, making the program one of the largest transfer programs in the U.S. Nevertheless, the FSP has been less studied, in part because there is little variation across states in benefits level and eligibility standards.
We use administrative records from NYS that consist of monthly payments to all beneficiaries of PA and FSP for years 2007 to 2012 together with basic demographic data for all family members. During this period, four increases in the level of PA benefits took place, providing quasi-experiment variation within county and across county in the percentage increase in benefits received by families. We study how such changes affected duration of PA spells during our time span. In addition, we use variation over time and across counties in the application rules for FSP, in particular the implementation of telephone interviews and online applications by county. We take advantage of the geographic phase-in of these policies by county to study their effects on FSP spells.