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Abstract

Welfare recipiency declined and labor force participation increased differentially across the United States over the past decade. This paper investigates whether this is due to the differences in opportunities, behavior, or state welfare program parameters. A model of labor force and program participation choice is developed and estimated. The welfare and labor force participation of midwestern families categorically eligible for Temporary Assistance for Needy Families (TANF) income support is compared to participation choices by families in the rest of the United States. We find that midwestern labor force participation does differ from that of other regions nationwide, and we show how participation in TANF depends on state-level differences in welfare programs.

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