Anatomy of Welfare Reform Evaluation: Announcement and Implementation Effects
نویسندگان
چکیده
Adopting a simple model of female labor force decisions, we explore several mechanisms through which women can respond to the announcement and implementation of an inwork benefit reform, including intertemporal substitution, human capital accumulation, and labor market frictions. Using information of the precise timing of the announcement and implementation of a major UK in-work benefit reform, we then estimate its effects on single mothers’ behavior. We find important announcement effects on employment decisions that are consistent with short-run frictions in the labor market. Evaluations that ignore such effects produce impact estimates that are biased downwards by 15 to 35 percent.
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