One rationale for work-focused welfare reform was human capital theory: work today should raise experience tomorrow, which should raise future wage offers and reduce welfare dependency. Yet few studies have estimated the effect of welfare reform on wages. I approach the problem using a novel sample selection estimator based on reservation wage data. Reservation wages solve the selection problem using bivariate censored regression methods without the need for exclusion restrictions. Whereas OLS and conventional sample selection estimates suggest that reform had little effect on wages, the reservation-wage-adjusted estimates suggest that Florida's welfare reform experiment raised wages by about 4%.

Of all of the welfare reforms that were implemented during the 1990s, time limits may represent the single greatest break from past policy. This paper expands on what is known about this important welfare reform measure by exploiting the predictions from Grogger and Michalopoulos (2003) to estimate the effects of time limits on welfare use, employment, labor supply, earnings, and income among female-headed families. Results based on data from the March Current Population Survey suggest that time limits have had important effects on welfare use and work, accounting for about one-eighth of the decline in welfare use and about 7% of the rise in employment since 1993. They have had no significant effect on earnings or income, however. The analysis also shows that the collective effects of other reforms have had important impacts on employment and labor supply. Furthermore, it identifies the Earned Income Tax Credit (EITC) as a particularly important contributor to both the recent decrease in welfare use and the recent increase in employment, labor supply, and earnings.

Time limits are among the most fundamental of recent welfare reforms. Whereas welfare benefits were an entitlement under the old Aid to Families with Dependent Children (AFDC) program, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), which replaced AFDC with the Temporary Aid to Needy Families (TANF) program, restricts most families to 60 months of federally funded benefits. Although the states are free to extend benefits further using their own funds, almost all have incorporated some sort of time limit into their TANF programs. Time limits may affect welfare receipt in two distinct ways. The most obvious effect is mechanical, reducing welfare use once recipients exhaust their benefits. However, time limits may also reduce welfare receipt before recipients reach the limit. If families are forwardlooking, they may reduce their current welfare use in order to preserve their benefits for the future. The purpose of this paper is to provide evidence on such anticipatory, or behavioral, effects of time limits. I use data from the Survey of Income and Program Participation (SIPP) to replicate my earlier estimates based on the Current Population Survey (CPS). I also exploit the SIPP to relax some of the restrictive assumptions that were implicit in my previous work.

Among the most important changes brought about by the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 are time limits, which provide consumers with an incentive to conserve their welfare benefits for future use. Among forward‐looking, expected‐utility‐maximizing consumers who face liquidity constraints and earnings uncertainty, economic theory predicts that the incentive to conserve should be strongest among families with the youngest children. We test this prediction using data from Florida’s Family Transition Program, a randomized welfare reform experiment. Our estimates generally exhibit the predicted age dependence, which suggests that time limits affect welfare use before they become binding. Our estimates indicate that, in the absence of other reforms that increased welfare use, FTP’s time limit would have reduced welfare receipt by 16 percent.

We analyze location choices of foreign-born science and engineering students receiving PhDs from US universities. Foreign students who stay in the United States are positively selected on observables. They tend to stay in the United States during periods of strong US economic growth and during periods of weak home country economic growth. Foreign students from higher-income countries and from recently democratized countries tend not to remain in the United States. Education and innovation may therefore be part of a virtuous cycle by which education enhances a country’s prospects for innovation and innovation makes the country more attractive for scientists and engineers.

Why Did the Welfare Rolls Fall During the 1990's? The Importance of Entry by Jeffrey Grogger, Steven J. Haider and Jacob Klerman. Published in volume 93, issue 2, pages 288-292 of American Economic Review, May 2003

We study the scale and selectivity of foreign-born PhD students in science and engineering. We focus on students from China, India, Korea, and Taiwan, which together account for most roughly one-third of science and engineering PhD students in the United States. The selectivity of these students is high, as measured by their fathers' relative education levels. In China and India, fathers of students who receive US PhDs in these fields are roughly 15 times more likely to have a BA degree than their contemporaries are to have tertiary education. Over time, selectivity falls for China but the trend for other countries is ambiguous.