This paper models the transitions between states defined in terms of work and welfare status as a discrete-time competing-risk model with unobserved heterogeneity. A random-effects logit model is estimated with a panel drawn from Wisconsin administrative records. Unobservables are assumed to follow a discrete distribution. The most striking result is that welfare recipients were substantially less likely to start working while remaining on welfare afterthe 1981 changes in program rules.
ASJC Scopus subject areas
- Economics and Econometrics