Subsidized Vehicle Acquisition and Earned Income in the Transition from Welfare to Work

It is the Policy of Cornell University actively to support equality of educational and employment opportunity. No person shall be denied admission to any educational program or activity or be denied employment on the basis of any University is committed to the maintenance of affirmative action programs which will assure the continuation of such equality of opportunity. 1 Successful transition from welfare to work depends on the availability of supporting services such as reliable transportation and affordable childcare. Despite this recognition, few empirical studies analyze the impacts of reliable personal transportation programs on individuals in transition. This study examines the impacts on earned income of the " Good News Garage, " a small-scale vehicle donation-and-sales program in Vermont. Using reduced-form random effects and censored regression models to account for the simultaneity of decisions to work and participate in welfare programs, we examine the impacts of this vehicle acquisition program for a small group of individuals. Our analyses indicate that the program results in a statistically significant increase in both earned income and the probability of employment. Introduction Successful transition from welfare to work has been at the heart of the political debate over the last few years, particularly since the passage of the Personal Responsibility and Work A major finding is that successful outcomes in the transition to work depend in part on supporting services such as access to affordable childcare and transportation [Minton, 1999]. A study of welfare-to-work transportation issues [Multisystems, Inc., 2000] noted that fewer than seven percent of Temporary Assistance to Needy Families (TANF) recipients owned an automobile, and that existing transportation systems often did not provide sufficient services for welfare recipients seeking work. Public transportation routes (especially buses) provided inadequate services in geographic areas and for time schedules more common to individuals in transition. Moreover, few public transportation systems recognized the need for " trip chaining " in which workers link their daily commutes to daycare centers or school drop-offs and pickups. These challenges are particularly acute in rural areas where population density is low and public transportation services are limited. About 38 percent of the nation's rural residents live in areas with no form of public transportation and an additional 28 percent of rural residents live in areas with very low levels of service provision [Dewees, 1998]. Small community size, dispersed residential areas, and low population density are often cited as barriers to the development …