Howard Gensler

Welfare and the family size decision of low-income, two-parent families

This study determines the increase in family size given an increase in the per child welfare benefit for a family with children in the US. The family size decision was modeled as a discrete choice decision. Data were obtained from the 1980-91 March Current Population Surveys of the US Census Bureau on 13,516 low-income, nonmilitary, non-farm, two-parent families with at least one dependent child. Low income was any amount under twice the official poverty level. Parents were limited to ages 18-40 years. Alaska and Hawaii were excluded. The data sets for 1979-90 were pooled. The sample included 10% Blacks and 27% receiving some amount of welfare. Average ages were 28.9 years for mothers and 30.8 years for fathers. The average number of children was 2.43. Findings from the ordered probit model indicate that education had a negative impact on family size, and age and race had positive impacts. Wages did not have a significant effect. The state unemployment rate and the average state income had negative effects. Unearned income had a small but significant effect on family size. The marginal welfare benefit had a positive impact. Findings reinforce the wealth hypothesis, that wealthier societies have smaller family sizes. Family size declines with increases in wages and education, which reflect increases in opportunity costs for time. Family size increases with age, as rearing children is labor-intensive. Family size increases with unearned income and welfare benefits that make childbearing affordable. It is argued that poor people in developed societies behave more consistently like poor people in developing countries. A 100% increase in the per child welfare benefit resulted in a 2% increase in the number of children. The policy implication is that a considerable increase in welfare benefits will have only trivial behavioral impacts for the poor on family size decisions.

A comparison of the effect of welfare programme features on welfare participation: one- and two-parent families

The effect of welfare programme characteristics on the decision to enter the welfare system is modelled as a binary discrete-choice latent variable model dependent upon an underlying index function. The two chief classes of welfare beneficiaries in the US welfare system are analysed: two-parent families and single female-headed families. The data set is a large, recent, non-experimental multiyear cross-sectional pooled data set derived from the US Census Bureaus Current Population Survey. Behavioural impacts from a range of economic variables are consistent in sign with predictions made by economic theory. Newly estimated comprehensive descriptive statistics of the entire welfare system for both single female household heads and married couples with children are employed to characterize the welfare system. Statistically significant estimates of substantial magnitude are obtained for the impacts on welfare participation for the welfare guarantee level, the effective tax rate on earned income, and the effec...

Labour-supply impacts of effective welfare programme parameters: a reanalysis

We quantify the impact of effective welfare programme parameters on the labour supply of single female household heads – the primary group of welfare recipients in the USA. Our panel of data is derived from the US Census Bureaus Current Population Survey for the years 1979 to 1990 inclusive. Behavioural impacts from a range of economic variables are consistent in sign with predictions made by economic theory. We find that effective welfare gurantee levels and the effective tax rate on earned income both significantly decrease labour supply. The marginal effects of these welfare programme parameters are economically small: a US

The effects of welfare guarantee levels and tax rates on male labour supply

1000 increase in the expected welfare guarantee level reduces annual labour supply by about 36 hours; a 10 percentage point increase in the effective tax rate on earned income reduces annual labour supply by about 7.5 hours.

Labor Force and Welfare Program Participation: The Effects of Welfare

The effect of welfare on labour supply is theoretically ambiguous. The effect of implicit welfare tax rates has not been precisely determined in previous studies. The effective welfare guarantee levels and tax rates estimated for each state from 1979 to 1990. Employing these newly estimated welfare descriptive statistics, the labour supply impacts of both welfare guarantee levels and tax rates are determined with high statistical precision for married males with children. A standard labour supply model is estimated by means of a tobit procedure over a multiyear cross-sectional pooled data set derived from the US Census Bureaus Current Population Survey for the period 1979 to 1990. Increases in the welfare guarantee level slightly increase labour supply for married males. An elasticity of 0.04 is computed. Increases in the welfare tax rate on earned income slightly decreases labour supply. An elasticity of -0.07 is computed.