Journal
AMERICAN JOURNAL OF AGRICULTURAL ECONOMICS
Volume 85, Issue 4, Pages 914-927Publisher
BLACKWELL PUBLISHERS
DOI: 10.1111/1467-8276.00497
Keywords
labor force; Oaxaca; rural; TANF program; welfare reform
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Nonmetro poor in the Midwest participate more in the labor force and less in welfare programs than metro poor. We formalize how household composition, capital, labor market conditions, and state-specific regulations define opportunity sets, then estimate a bivariate binomial probit model of work and program participation choices. An Oaxaca decomposition analysis is conducted to compare differences in characteristics to differences in behavior in explaining the two groups' choices. We find no behavioral basis for the difference in labor market participation. And while most of the lower Midwestern nonmetro welfare program participation is due to demographics, some is due to different life-cycle behavior.
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