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Date of Award

Spring 5-15-2021

Author's School

Graduate School of Arts and Sciences

Author's Department

Economics

Degree Name

Doctor of Liberal Arts (DLA)

Degree Type

Dissertation

Abstract

The first two chapters of my dissertation paper detail the role of work-inducing welfare policies on single mother’s human capital formation. These chapters focus on the two most important work-inducing policies that have transformed the welfare program in the United States from an out-work to an in-work assistance program: (1) welfare reform in 1996, imposed strict work requirements and time limits on the Aid to Families with Dependent Children (AFDC), which was the biggest monthly cash assistance program for single parents; (2) in 1993, the government expanded the Earned Income Tax Credits in a historical rate to subsidize earnings for low-income working families. In chapter one, "Welfare Reform, Expansion of Earned Income Tax Credit, and College Enrollment of Single Mothers," I explore the effect of each specific policy (1) work requirements, (2) time limits, and (3) EITC expansion on the college enrollment of single mothers. Past studies mainly focused on estimating the overall effect of the welfare reform and have done limited work on disentangling the effects of each specific policies. By exploiting variations in the timing, intensity, and eligibility conditions of programs across states and time as identification strategies, I show that work requirements and the expansion of EITC decreased full-time four-year college enrollment rates among single mothers by two percentage points. I find that time limits had no statistically significant impact on the enrollment to college between 1992 and 2001.

Motivated by these results, in chapter two, "Welfare Reform, Expansion of Earned Income Tax Credit, and Human Capital Formation of Single Mothers," I explore the effect of each specific welfare reform policy 1) work requirements, 2) time limits, and 3) EITC expansion on the human capital formation of single mothers. While work-inducing policies are intended to improve the self-sufficiency of single mothers through promoting employment, which also increase their work experience, these standards can discourage single mothers' from deciding to enroll in college; in turn, this factor decreases their higher educational attainment. To understand the effect of these policies on single mothers' long-term wage growth through two channels of work experience and college attainment, I extend the dynamic discrete choice model of Chan (2013) by endogenizing the choice of college enrollment and incorporating heterogeneous returns to work experience across different educational level. Using the 1992 policy environment as the baseline scenario, a 10-year simulation based on initial estimates shows that, in the long-run, wage gains caused by an increases in work experience can be larger than the wages lost from declines in the attainment of post-secondary education induced by the reform package across single mothers with children aged under 8. However, the counterfactual scenario shows that, if states impose smaller penalties on the single mothers who attend college while on the welfare, then it can mitigate substantial portion of wage loss through decline in educational attainment, increasing the reform package's impact on the wage growth. In particular, the wage of single mothers who are induced to drop out from the college because of the reform package increases by 6 percentage points if government allows college towards the work requirements. Although the reform policy induces net wage gain, the disposable income of single mothers decline because rise in earnings is not large enough to counter the loss in the welfare benefits. In particular, single mothers with low initial human capital experience the largest drop in the disposable income and utility as the result for the reform policy. Welfare analysis under a revenue-neutral condition based on initial estimates shows that single mothers are worse off because of the introduction of work requirements, time limits and the expansion of EITC. In chapter three, “Economic Outcome of Return Migration,” I explore the gender-specific selection process and economic outcomes of internal return migration by using Indonesian panel data from 1993 to 2014 that focuses on work-related migrants. In the first part of this chapter, I focus on the gender-specific selection process of outward and return migration. I find important gender differences in the selection process or return decision in terms of the employment characteristics of the host region. In particular, female migrants who have accumulated more experience in service sector or private wage jobs are more likely to return, and male migrants who have accumulated more experience at an unpaid family job are more likely to return. This finding demonstrates that returning male migrants are a negatively selected group of migrants, and female migrants are positively selected in terms of employment characteristics at the migration stage. The second part of this chapter provides a descriptive analysis of the gender-specific economic outcomes of return migration by comparing wages, occupational choices and household decision-making of return migrants with people who have not migrated. To control for the selection bias, I use two different methods to supplement the main analysis: (1) ordinary lest squares (OLS) regression while controlling for the innate ability with elementary exit test scores and the wages in a first full-time job before migration to study the wage difference between non-movers and return migrants. (2) propensity score matching (PSM) and matching difference in difference (MDID) to systematically control for the selection at the initial stage of migration to study about the occupation choice of migrants; The results from OLS provide the plausible evidence that returning male migrants experience hourly wage gains and results from OLS, PSM and MDID show that returning male migrants are more likely to be self-employed in the non-agricultural sector relative to local stayers upon return. Conversely, results from OLS show that returning female migrants experience substantial monthly wage losses, and no hourly wage gains upon return. I show returning female migrants’ wage losses or lack of wage gains are associated with their increased marriage rates and a sharp decline in their work participation after their return. However, even with the rise in marriage rates, returning female migrants who initially migrate for education both increase their work participation and experience no wage loss. These results demonstrate that the economic outcome of return migration can be heterogeneous across different initial migration purposes. Although female return migrants who migrate for work experience adverse economic outcomes relative to migrants who immigrate for education, I find they are more likely to make the economic decisions in their households compared to people who do not migrate. This chapter suggests the importance of considering marriage and migration together to understand how gender differences affect the economic outcomes of return migration. Moreover, it suggests the need to look beyond employment outcomes to understand the channels through which the migration experience can improve the lives of female return migrants.

Language

English (en)

Chair and Committee

George-Levi Gayle

Committee Members

Limor Golan, Sanghmitra Gautam, Ian Fillmore, Barton Hamilton,

Available for download on Sunday, May 15, 2022

Included in

Economics Commons

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