Are Parental Welfare Work Requirements Good for Disadvantaged Children? Evidence From Age‐of‐Youngest‐Child Exemptions

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu This paper assesses the short-run impact of first-year maternal employment on low-income children's cognitive development. The identification strategy exploits an important feature of the U.S.'s welfare work requirement rules -namely, age-of-youngest-child exemptions -as a source of quasi-experimental variation in maternal employment. The 1996 welfare reform law empowered states to exempt adult recipients from the work requirements until the youngest child reaches a certain age. This led to substantial variation in the amount of time that mothers can remain home with a newborn child. I use this variation to estimate local average treatment effects of work-requirement-induced increases in maternal employment. Using a sample of infants from the Birth cohort of the Early Childhood Longitudinal Study, the OLS results show that children of working mothers score higher on a test of cognitive ability. However, the IV estimates reveal sizable negative effects of early maternal employment. An auxiliary analysis of mechanisms finds that working mothers experience an increase in depressive symptoms, and are less likely to breast-feed and read to their children. In addition, such children are exposed to non-parental child care arrangements at a younger age, and they spend more time in these settings throughout the first year of life. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E S JEL Classification:I38, J2

The Timing of Exemptions From Welfare Work Requirements and Its Effects on Mothers' Work and Welfare Receipt Around Childbirth

“…Washbrook et al () report that long AYC exemptions reduce maternal work at or before 4 months by 7 percentage points, which continues to be the case until 9 months after birth. Herbst () finds that a 1‐month reduction in the AYC increases the likelihood of employment by 0.6 percentage point and months of employment by 0.04 months.…”

“…Specifically, I closely track how LFP patterns have evolved around childbirth in order to identify the effects of the two sequential exemptions. Second, the study contributes to the broad literature that examines the employment effect of Welfare Reform; most of that literature documents modest decreases in welfare participation and substantial increases in work among single mothers (Fang and Keane 2004;Grogger 2003Grogger , 2004Herbst 2008;Kaushal and Kaestner 2001;Mazzolari 2007;Meyer and Rosenbaum 2001). What distinguishes my study from the broad literature is its focus, first, on how employment before and after childbirth responds to work exemption rules and, second, on the potentially negative consequence of working when the opportunity cost is high on employment and welfare dependency.…”

“…They discover that a tighter AYC exemption is associated with a higher likelihood of exiting welfare, but it also is associated with an accelerated return to welfare. Washbrook et al () and Herbst () utilize longitudinal data that span 9 months from childbirth using the Early Childhood Longitudinal Study Birth cohort to exploit cross‐state differences in the generosity of AYC allotments in 2001. Specifically, Washbrook et al () employ a DD strategy and find that long welfare work exemptions reduce the employment of single mothers who have infants.…”

“…Specifically, Washbrook et al () employ a DD strategy and find that long welfare work exemptions reduce the employment of single mothers who have infants. Herbst () exploits the AYC exemption as a source of quasi‐experimental variation in first‐year maternal employment and uses the instrumental variable approach. He finds a sizable increase in maternal employment in response to a short AYC exemption and subsequent negative effects on low‐income children's cognitive development.…”

“…Although five previous papers have examined the AYC exemption (Hill 2012;Herbst 2017;Hofferth et al 2002Hofferth et al , 2005Washbrook et al 2011), none to date have examined the pregnancy exemption. Using data from the Panel Study of Income Dynamics, Hofferth et al (2002Hofferth et al ( , 2005 evaluate both the policies that require work and their associations with welfare exit behavior.…”