Seminar in Empirical Microeconomics - Welfare, Workfare and Labor Supply: A Unified Evaluation
Time
Thursday, 2. June 2022
13:30 - 15:00
Location
H309
Organizer
Chair of Political Economy
Speaker:
Giuseppe Sorrenti (University of Amsterdam)
Welfare, Workfare and Labor Supply: A Unified Evaluation
(with Francesco Agostinelli and Emilio Borghesan)
Abstract: We analyze the extent to which labor supply responds to incentives created by social programs in the United States. We find evidence that the incentive and disincentive effects of the EITC and welfare programs on hours worked among single mothers are more extensive than previously found in the literature. We also show that the difference-in-differences design, frequently adopted in the existing literature, fails to identify a meaningful treatment parameter in the context of the welfare-to-workfare transition in the 1990s. Finally, we use our quasi-experimental estimates to identify a structural model of labor supply with multiple tax and transfer programs. Model counterfactuals show that the EITC’s effect on labor supply depends on the regime of taxes and welfare system in place.