What Mean Impacts Miss:Distributional Effects of Welfare Reform Experiments

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  • 1 January 2005
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      • Published in RePEc
Abstract
Labor supply theory predicts systematic heterogeneity in the impact of recent welfare reformson earnings, transfers, and income. Yet most welfare reform research focuses on meanimpacts. We investigate the importance of heterogeneity using random-assignment data fromConnecticut's Jobs First waiver, which features key elements of post-1996 welfare programs.Estimated quantile treatment effects exhibit the substantial heterogeneity predicted by laborsupply theory. Thus mean impacts miss a great deal. Looking separately at samples of dropoutsand other women does not improve the performance of mean impacts. We conclude that welfarereform's effects are likely both more varied and more extensive than has been recognized.

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