← Search

American Economic Review Vol. 96 No. 4 2006

What Mean Impacts Miss: Distributional Effects of Welfare Reform Experiments

Marianne Bitler1; Jonah B. Gelbach2; Hilary W. Hoynes3

1 Public Policy Institute of California, 500 Washington Street, Suite 800, San Francisco, CA 94111. · 2 Department of Economics, University of Maryland at College Park, College Park, MD 20742, and Florida State University College of Law. · 3 Department of Economics, University of California, Davis, 1152 Social Science and Humanities Building, One Shields Avenue, Davis, CA 95616.

Abstract

Labor supply theory predicts systematic heterogeneity in the impact of recent welfare reforms on earnings, transfers, and income. Yet most welfare reform research focuses on mean impacts. We investigate the importance of heterogeneity using random-assignment data from Connecticut's Jobs First waiver, which features key elements of post-1996 welfare programs. Estimated quantile treatment effects exhibit the substantial heterogeneity predicted by labor supply theory. Thus mean impacts miss a great deal. Looking separately at samples of dropouts and other women does not improve the performance of mean impacts. We conclude that welfare reform's effects are likely both more varied and more extensive than has been recognized.

DOI
10.1257/aer.96.4.988
Volume
96
Issue
4
Pages
988-1012
Language
en
Sources
crossref openalex bibtex:phds-export.bib

Cite