Panel Paper:
The Effect of Cash Transfers on Economic Well-Being: Evidence from the 2010s
Thursday, November 7, 2019
I.M Pei Tower: Terrace Level, Columbine (Sheraton Denver Downtown)
*Names in bold indicate Presenter
The Personal Responsibility and Work Opportunity Act of 1996 established the Temporary Assistance for Needy Families (TANF) program within the United States. Perhaps the most controversial aspect of TANF was that it mandated 60-month lifetime time limits for federal cash assistance dollars. States, however, reserve the right to set stricter time limits or to continue to fund TANF caseloads beyond 60 months using their own funds. In recent years, several states imposed TANF time limits for the first time or made existing time limits more stringent. Within a targeted population, I find that stricter time limits decrease annual TANF participation by 23 percent and annual transfer income by 4 percent. In some policy contexts, much of the decrease in TANF use is offset by increased participation in the Supplemental Security Income (SSI) program. Labor supply effects vary across policy contexts and demographic groups. Stricter time limits decrease employment and earnings when there are large increases in SSI participation. In other policy contexts, stricter time limits increase employment among mothers without young children and mothers of both young and adolescent children. Among mothers of young children only, stricter time limits generally decrease employment and earnings. The pattern of results suggests that work becomes relatively less attractive in the absence of TANF income and work requirements among mothers who face the largest child care costs. Decreased TANF generosity diminishes the economic well-being of these families.
Full Paper:
- Pepin_TANF.pdf (1349.5KB)
