James P. Ziliak

Accounting for the Decline in AFDC Caseloads: Welfare Reform or the Economy?

We use state-level monthly panel data to assess the relative contributions of the macroeconomy and welfare reform in accounting for the 1993-96 decline in Aid to Families with Dependent Children (AFDC) caseloads. Our results suggest that the decline in per capita AFDC caseloads is attributable largely to the economic conditions in states and not to waivers from federal welfare policies. Nationwide, we attribute 66 percent of the decline to the macroeconomy. However, we do find substantial heterogeneity in the impact and timing of alternative waivers on AFDC caseloads. States with waivers impacting parental responsibilities experienced greater caseload declines than states with waivers that made work more attractive. Overall, our model predicts that had it not been for the influence of economic factors, welfare reform would not have led to any decrease in aggregate caseloads.

Efficient Estimation With Panel Data When Instruments Are Predetermined: An Empirical Comparison of Moment-Condition Estimators

I examine the empirical performance of instrumental variables estimators with predetermined instruments in an application to life-cycle labor supply under uncertainty. The estimators studied are two-stage least squares, generalized method-of-moments (GMM), forward filter, independently weighted GMM, and split-sample instrumental variables. I compare the bias/efficiency trade-off for the estimators using bootstrap algorithms suggested by Freedman and by Brown and Newey. Results indicate that the downward bias in GMM is quite severe as the number of moment conditions expands, outweighing the gains in efficiency. The forward-filter estimator, however, has lower bias and is more efficient than two-stage least squares.

Poverty and Macroeconomic Performance Across Space, Race, and Family Structure

We examined the effects of macroeconomic performance and social policy on the extent and depth of poverty in America using state-level panel data from the 1981–2000 waves of the Current Population Survey. We found that a strong macroeconomy at both the state and national levels reduced both the number of families who were living in poverty and the severity of poverty. The magnitude and source of these antipoverty effects, however, were not uniform across family structures and racial groups or necessarily over time. While gains in the eradication of poverty, in general, were tempered by rising wage inequality, simulations indicated that female-headed families and families that were headed by black persons experienced substantial reductions in poverty in the 1990s largely because of the growth in median wages. An auxiliary time-series analysis suggests that the expansions in the federal Earned Income Tax Credit of the 1990s accounted for upward of 50% of the reduction in after-tax income deprivation.

Estimating Life Cycle Labor Supply Tax Effects

We present an econometrically tractable life cycle labor supply model for panel data including intertemporally progressive taxes on uncertai wage and nonwge incomes. Our two‐stage fixedeffects generalized method‐of‐moments approach first extimates intretemporal and then intertemporal preferences. Specification testing domonstrates the value of incorporating joint progressive taxation of labor and nonlabor incomes, Results for prime‐age men emphasize the roles played by hourly wage endogeneity, worker‐specific effects, the measure of the rate of pay, and intemporal budget constaint, nonseparability, Simulations indicate that recent tax reform, while not self‐financing, stimulated made labor supplied by about 3 percent and reduced deadweight loss about 16 percent.

Food Insecurity And Health Outcomes

Almost fifty million people are food insecure in the United States, which makes food insecurity one of the nations leading health and nutrition issues. We examine recent research evidence of the health consequences of food insecurity for children, nonsenior adults, and seniors in the United States. For context, we first provide an overview of how food insecurity is measured in the country, followed by a presentation of recent trends in the prevalence of food insecurity. Then we present a survey of selected recent research that examined the association between food insecurity and health outcomes. We show that the literature has consistently found food insecurity to be negatively associated with health. For example, after confounding risk factors were controlled for, studies found that food-insecure children are at least twice as likely to report being in fair or poor health and at least 1.4 times more likely to have asthma, compared to food-secure children; and food-insecure seniors have limitations in activities of daily living comparable to those of food-secure seniors fourteen years older. The Supplemental Nutrition Assistance Program (SNAP) substantially reduces the prevalence of food insecurity and thus is critical to reducing negative health outcomes.

Food Stamp Caseloads over the Business Cycle

We use a dynamic model of food stamp caseloads with state-level panel data to estimate the impact of the business cycle on food stamp caseloads in the era of welfare reform. The macroeconomy has a substantial impact on food stamp caseloads: A one-percentage-point increase in the unemployment rate leads to a 2.3% increase after one year. In terms of welfare policy, a 10-percentage-point increase in the share of a states population waived from rules limiting food stamp receipt among able-bodied adults without dependents (ABAWDs) results in a 0.5% increase in contemporaneous caseloads. States with waivers from the Aid to Families with Dependent Children (AFDC) program in the mid-1990s had caseloads about 1.9% higher than nonwaiver states. While changes in AFDC caseloads have historically resulted in coincident changes in food stamp caseloads, our results suggest that the link between AFDC caseload and food stamp caseload changes has dissipated substantially after welfare reform. The cyclical sensitivity of food stamp caseloads indicates the importance of food stamps in smoothing consumption during economic recessions.

The Value of a Statistical Life: Evidence from Panel Data

Our research addresses fundamental long-standing concerns in the compensating wage differentials literature and its public policy implications: the econometric properties of estimates of the value of statistical life (VSL) and the wide range of such estimates from about

The Importance of Sample Attrition in Life Cycle Labor Supply Estimation

0 to almost

Gender And Promotion In The Economics Profession

30 million. Here we address most of the prominent econometric issues by applying panel data, a new and more accurate fatality risk measure, and systematic application of panel data estimators. Controlling for measurement error, endogeneity, latent individual heterogeneity that may be correlated with the regressors, state dependence, and sample composition yields an estimated value of a statistical life of about

Income Transfers and Assets of the Poor

7 million–