Date of Award

5-2012

Document Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Legacy Department

Economics

Advisor

Mroz, Thomas A.

Committee Member

Sauer , Raymond D.

Committee Member

Tollison , Robert D.

Committee Member

Warner , John T.

Abstract

The first and second chapters examine the disincentive effects of the Supplemental Security Income (SSI) Program's generosity on the employment decisions of prime age blind and/or deaf individuals. Using an individual-level model with state and time-fixed effects and the Difference-in-Difference method, I find only small impacts of an increase in monthly SSI benefits. Grouping all blind and deaf individuals together, the estimated impact of a $100 increase in monthly maximum SSI benefits (about a 17% increase) is only a 0.4 percentage point reduction in labor force participation. The estimated effects from separate analysis by demographic groups, however, suggest larger reductions (about 1 percentage point) in labor force participation. The largest impact found in this study suggests a 4 percentage point reduction in the labor force participation of high school dropout blind and/or deaf individuals from a $100 increase in monthly maximum SSI benefits. Using an alternative definition of labor supply (hours of work per year) I still find only a small impact of SSI generosity on the labor force participation decision. Specifically, a $100 increase in maximum SSI benefits per month reduces hours of work per year by 4 hours for all the blind and/or deaf individuals.
The third chapter explores the effects of chronic child illness on married mother's labor force participation decision using longitudinal data from the Panel Study of Income Dynamics (PSID) and Child Development Supplements (CDS). Mothers of sick children may remain at home in order to care for their children. Alternatively, mothers may decide to enter the labor force to pay for additional health resources. While previous studies suggest that a sick child negatively affects mothers' labor supply, most studies use only cross-section datasets and therefore lacking information on changes in both child health and labor supply of mothers over time. The long term or permanent nature of chronic child illness may adversely affect a married mother's labor force participation decision over several years in a way that cannot be observed in a single year analysis. Using a pooled Probit model and exploiting the panel structure of the data from 1997 to 2007, I find that having at least one child with a chronic illness condition reduces married mother's probability of working by almost 2.5 percentage points. This is a small effect considering almost 72% of the mothers in the dataset are employed. The pooled OLS model suggests that with the existence of at least one chronically ill child, a married mother increases her hours of work by almost 10 years per year. However this effect is not significant. Considering that the married mother's average hours of work per year are almost 1587 hours, this effect is almost negligible indicating no substantial change in mother's hours of work per year.

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Economics Commons

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