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Project Description

Following welfare policy changes in the 90s, concerns have been expressed about whether enough jobs will be available to employ the additional welfare recipients entering the labor market as a result of welfare reform. If a surplus of jobs is not available in particular areas, welfare recipients’ entry into the labor force might reduce low-skill wages and displace some workers. There is also a great concern about the impact of welfare reform on rural and small metropolitan labor markets, because these markets might be less able to absorb the inflow of welfare recipients than urban labor markets. To address these concerns, this project examines how well rural and small metropolitan labor markets can absorb welfare recipients, and to the extent feasible, estimate the impact of welfare reform on rural and small-metropolitan regions since 1993. This study uses an economic model to estimate the impact of welfare reform and improvements in the economy on the low-skill labor market, where most welfare recipients seek work. The basic approach began by comparing estimates of the number of welfare recipients entering the labor market to changes in the low-skill labor force in each of the regions. Were there enough jobs to absorb the increase of welfare recipients who left for work or who combined welfare and work? Researchers then attempted to estimate the effect of the welfare push on employment and wages in each of the regions and distinguish between entry due to reforms (“welfare push”) and entry due to the strong economy (“demand pull”).

Project duration: - Apr 2001

Sites studied include 12 sites which include a mix of rural and small metropolitan areas.
Decatur and Florence, AL;
Rural MS;
Central OR;
Medford-Ashland, OR;
Joplin, MO;
Florence, SC;
Southeast MO;
VT;
Jamestown, NY;
Eau Claire, WI;
North Country, NY;
Wausau, WI.

Sample Characteristics and Sites Studied

General population in the 12 study sites

Recent Findings in Brief

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