Time-inconsistency and welfare program participation: Evidence from the nlsy

Hanming Fang, Dan Silverman

Research output: Contribution to journalArticle

47 Scopus citations

Abstract

We empirically implement a dynamic structural model of labor supply and welfare program participation for agents with potentially time-inconsistent preferences. Using panel data on the choices of single women with children from the National Longitudinal Surveys (NLSY) 1979, we provide estimates of the degree of time-inconsistency, and of its influence on the welfare take-up decision. With these estimates, we conduct counterfactual experiments to quantify a measure of the utility loss stemming from the inability to commit to future decisions, and the potential gains from commitment mechanisms such as welfare time limits and work requirements.

Original languageEnglish (US)
Pages (from-to)1043-1077
Number of pages35
JournalInternational Economic Review
Volume50
Issue number4
DOIs
StatePublished - Nov 1 2009

ASJC Scopus subject areas

  • Economics and Econometrics

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