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Finding Jobs

Finding Jobs: Work and Welfare Reform

David E. Card
Rebecca M. Blank
Copyright Date: 2000
Published by: Russell Sage Foundation
Pages: 560
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  • Book Info
    Finding Jobs
    Book Description:

    Do plummeting welfare caseloads and rising employment prove that welfare reform policies have succeeded, or is this success due primarily to the job explosion created by today's robust economy? With roughly one to two million people expected to leave welfare in the coming decades, uncertainty about their long-term prospects troubles many social scientists.Finding Jobsoffers a thorough examination of the low-skill labor market and its capacity to sustain this rising tide of workers, many of whom are single mothers with limited education. Each chapter examines specific trends in the labor market to ask such questions as: How secure are these low-skill jobs, particularly in the event of a recession? What can these workers expect in terms of wage growth and career advancement opportunities? How will a surge in the workforce affect opportunities for those already employed in low-skill jobs?

    Finding Jobsoffers both good and bad news about work and welfare reform. Although the research presented in this book demonstrates that it is possible to find jobs for people who have traditionally relied on public assistance, it also offers cautionary evidence that today's strong economy may mask enduring underlying problems.Finding Jobsshows that the low-wage labor market is particularly vulnerable to economic downswings and that lower skilled workers enjoy less job stability. Several chapters illustrate why financial incentives, such as the Earned Income Tax Credit (EITC), are as essential to encouraging workforce participation as job search programs. Other chapters show the importance of including provisions for health insurance, and of increasing subsidies for child care to assist the large population of working single mothers affected by welfare reform.

    Finding Jobsalso examines the potential costs of new welfare restrictions. It looks at how states can improve their flexibility in imposing time limits on families receiving welfare, and calls into question the cutbacks in eligibility for immigrants, who traditionally have relied less on public assistance than their native-born counterparts.

    Finding Jobsis an informative and wide-ranging inquiry into the issues raised by welfare reform. Based on comprehensive new data, this volume offers valuable guidance to policymakers looking to design policies that will increase work, raise incomes, and lower poverty in changing economic conditions.

    eISBN: 978-1-61044-104-9
    Subjects: Business, Sociology

Table of Contents

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  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vi)
  3. Contributors
    (pp. vii-viii)
  4. Introduction The Labor Market and Welfare Reform
    (pp. 1-20)
    Rebecca M. Blank and David E. Card

    The coordinated push to move an increasing number of welfare recipients off assistance and into full-time work has raised a number of key questions about the nature of the labor market for less skilled workers: Will employment opportunities for former welfare recipients be vulnerable to future recessions? How quickly will workers’ wages grow as they gain labor market experience? What is the effect of eligibility time limits on those who remain on welfare despite financial incentives and administrative prodding to leave? The twelve chapters in this book address these and many other important questions about the labor market prospects facing...


    • Chapter 1 The Employment, Earnings, and Income of Less Skilled Workers over the Business Cycle
      (pp. 23-71)
      Hilary W. Hoynes

      One of the most substantial risks facing workers is the potential for job loss, either permanent or temporary. The possibility of a loss in earnings and employment is likely to be of greater concern to less skilled workers because of difficulties in replacing lost income with savings and the earnings of secondary earners. Many government transfer programs have been established to reduce the variability of family income over the business cycle. Because of recent changes in welfare programs, however, there is some uncertainty as to the role that the safety net can and will play in subsequent recessions.

      Recent evidence...

    • Chapter 2 Displacement and Wage Effects of Welfare Reform
      (pp. 72-122)
      Timothy J. Bartik

      Recent welfare reform has pushed welfare recipients into the labor market, raising a number of questions about its short- and long-term effects. Will jobs obtained by former welfare recipients come at the expense of others, who will be displaced by losing their jobs or having fewer job vacancies available? Will the increased labor supply of welfare recipients stimulate job creation? Will it depress wages overall, or for women with little education?

      The recent welfare reforms began around 1993. Welfare caseloads, after increasing since 1988, did not change much from 1993 to 1994, and then began to decline. Nineteen ninety-three was...


    • Chapter 3 Job Change and Job Stability Among Less Skilled Young Workers
      (pp. 125-159)
      Harry J. Holzer and Robert J. Lalonde

      To what extent does job or employment instability contribute to the problems of less skilled workers in the labor market?¹ For which skill group is job instability most severe? What factors are associated with such instability, both among and within demographic groups? Labor economists and policy makers have long been interested in these questions, and a significant body of research on these topics has emerged over the years. Changes in the labor market for less skilled workers over the past few decades, however, raise new concerns about these questions. For one thing, inequality between skill groups has grown rapidly over...

    • Chapter 4 Wage Progression Among Less Skilled Workers
      (pp. 160-192)
      Tricia Gladden and Christopher Taber

      During the last thirty years we have witnessed a large increase in the “returns to skill.” These changes in the wage structure have renewed interest aimed at increasing the skill levels of low-skilled workers. Attempts to do this through job training programs have been largely unsuccessful, as the wage gains from these programs tend to be quite modest (although the costs are often also small). In rethinking questions about subsidizing skill formation, it is useful to step back and explore the issue of wage growth among low-skilled workers. Despite the large amount of work in labor economics devoted to the...

    • Chapter 5 Gender Differences in the Low-Wage Labor Market
      (pp. 193-232)
      Jane Waldfogel and Susan E. Mayer

      The fact that women, particularly women with children, are working in such great numbers has often been cited as a motivation for the welfare reforms enacted by many states in the 1990s and by Congress in 1994. The rationale was that if so many women found it possible to work and care for their children, there was no reason mothers on welfare should not do the same. The narrowing of the gender gap in pay may have been another factor underlying the increased emphasis on women’s supporting themselves and their children.

      The improvement in women’s labor market position has been...

    • Chapter 6 Health Insurance and Less Skilled Workers
      (pp. 233-261)
      Janet Currie and Aaron Yelowitz

      Most nonelderly Americans get their health insurance either through their own employment or through the employment of family members. Thus, evidence that rates of private health insurance coverage have fallen over time has caused great concern. The fraction of private sector workers age twenty to sixty-five who were covered by their own employer’s insurance fell from 72 to 65 percent between 1979 and 1997. The decline was much more dramatic among workers without a high school education; among these workers, coverage fell from 67 to 50 percent (see table 6.1).

      A closer inspection of table 6.1 suggests, however, that the...

    • Chapter 7 Employee-Based Versus Employer-Based Subsidies to Low-Wage Workers: A Public Finance Perspective
      (pp. 262-296)
      Stacy Dickert-Conlin and Douglas Holtz-Eakin

      There has been renewed interest of late in the topic of labor market subsidies to disadvantaged workers. In part, this reflects widespread concern over shifts in the distribution of earnings and income over the past two decades. At the same time, it is also driven by a reconsideration of the goals of income-support programs and a new federalist approach to welfare programs in the United States.

      Our purpose in this chapter is to revisit one aspect of the design of these programs, namely, the use of employer-based subsidies versus employee-based subsidies. In doing so, we seek to approach the design...


    • Chapter 8 Public Service Employment and Mandatory Work: A Policy Whose Time Has Come and Gone and Come Again?
      (pp. 299-372)
      David T. Ellwood and Elisabeth D. Welty

      During the Great Depression, when unemployment rates were soaring toward 30 percent, public service employment seemed an inevitable part of the solution, and thus various programs like the Works Progress Administration (WPA) and the Civilian Conservation Corps (CCC) were born. During summers in the 1970s, when youth unemployment approached 25 percent, and black youth unemployment was double that, the Summer Youth Employment Program provided summer jobs for young people. When welfare recipients were having a difficult time making the transition to work, presumably in part because they lacked real work experience, the work experience program in San Diego was born....

    • Chapter 9 Financial Incentives for Increasing Work and Income Among Low-Income Families
      (pp. 373-419)
      Rebecca M. Blank, David E. Card and Philip K. Robins

      Policy makers in the United States and around the world have long struggled to accomplish at least three goals in the design of welfare programs: raise the living standards of low-income families; encourage work and economic self-sufficiency; and keep government costs low. Many analysts have argued that these three goals are inherently inconsistent; some have even characterized the conflict between them as the “iron triangle” of welfare reform. Nevertheless, a number of programs have been initiated over the past decade that aim to accomplish all three goals through an innovative set of financial incentives, sometimes in combination with job-search assistance...

    • Chapter 10 Child Care and Mothers’ Employment Decisions
      (pp. 420-462)
      Patricia M. Anderson and Phillip B. Levine

      The employment of mothers with small children has exploded over the past few decades, outpacing the growth among any other large demographic group. In 1947, only 12 percent of women with children under the age of six were in the workforce, but that level jumped to 32 percent by 1970 and 62 percent by 1996. An obvious implication of the increased labor force activity of women is the concomitant increase in the importance of the market for child care.

      An inclusive economic analysis of the child care market and public policies directed toward it would address at least three central...


    • Chapter 11 Use of Means-Tested Transfer Programs by Immigrants, Their Children, and Their Children’s Children
      (pp. 465-506)
      Kristin F. Butcher and Luojia Hu

      The past two decades have brought more immigrants to the United States than any comparable period since the “great” migration at the turn of the last century. Researchers and policy makers have always been concerned about the impact of immigration on a host of socioeconomic outcomes. However, since the changes in immigration law in 1965, the predominant sending regions shifted from European countries to countries in Latin America and Asia. These “new” immigrants tend to have lower levels of education, on average, than the native born in the United States. This shift, combined with declines in real wages for low-skilled...

    • Chapter 12 Time Limits
      (pp. 507-536)
      Robert A. Moffitt and LaDonna A. Pavetti

      Of all the U.S. welfare reform developments of the 1990s, the introduction of time limits on benefit receipt is generally thought to mark the most dramatic break from the past. Whereas work requirements, sanctions, and other features have been discussed in welfare reform debates for many years and have been introduced in various forms, time limits have a very short history as a serious policy alternative. First politically promulgated at a national level by candidate Bill Clinton in the 1992 presidential elections and first widely introduced into the policy-making and research communities by David Ellwood (1988), the concept of time...

  9. Index
    (pp. 537-549)