Date of Award
Doctor of Philosophy (PhD)
Leonard M. Lopoo
At-risk young adults, Educational Attainment, Human Capital Development, Poverty, U.S. Social Welfare Policy, Work Experience
Social and Behavioral Sciences
Social welfare programs and policies can have a variety of anticipated and unexpected effects on the human capital investments of young adults at-risk of living in poverty in the United States. My dissertation investigates how three large-scale public programs – means-tested, cash welfare (e.g., Aid to Families with Dependent Children and Temporary Aid to Needy Families), Medicaid health insurance for children, and the Social Security Student Benefit Program – affected the educational attainment and work experience of vulnerable young adults.
In the first chapter, I examine how public policies encouraging labor force participation by low-skilled single mothers during welfare reform unintentionally led to labor supply declines by young, less-educated single males. While the labor market woes of low-skilled male workers over the past several decades have been well documented, the academic literature on the identification of causal factors leading to the decline in labor force participation (LFP) by young, low-skilled males is relatively scant. In this paper, I use a fixed-effects, instrumental variable research design to exploit the timing and characteristics of welfare reform policies to explore whether policies targeted to increase LFP rates for low-skilled single mothers inadvertently led to labor force exit of young, low-skilled males. Using data from the Current Population Survey and the series of work inducements enacted by states throughout the 1990s as a source of exogenous variation in a quasi-experimental design, I find that a welfare-reform-generated 10 percentage point (pp) increase in LFP for low-skilled single mothers resulted in a statistically significant 2.6 pp decline in LFP rates by young, low-skilled single males. Furthermore, after a series of alternative model specifications and robustness checks, I find that this result is driven entirely by the decline in labor supply for white males; young black males and other groups of workers appear to be unaffected by the labor supply response of less-educated single mothers to welfare reform.
The second essay in my dissertation studies one of the long-term effects of the child Medicaid health insurance expansions. Prompted by the legislative decision to decouple child Medicaid benefits from cash welfare receipt, the number of young children qualifying for public health insurance grew markedly throughout the 1980s and early 1990s. This chapter extends the academic literature examining early childhood investments and longer-term human capital measures by exploring whether public health insurance expansions to low-income children led to a greater number of high school completers in the 2000s. Using a technique developed by Currie and Gruber (1994, 1996) to simulate the generosity of a state’s Medicaid program during early childhood, I find large and significant effects on completion rates, which are examined in two forms: the dropout rate and the traditional four-year high school graduation rate. Intent-to-treat estimates range from a 1.9 to 2.5 pp decrease in the dropout rate for each 10 pp increase in early childhood years covered by the state-level Medicaid program. The same 10 percentage point increase in child Medicaid program generosity reveals increases of 1.0 to 1.3 pp when applied to four-year graduation rates, indicating that dropout reductions are propelled by increases in traditional diplomas. In addition, results appear to be driven by Hispanic and white students, the two groups which experienced the greatest within-group eligibility increases due to the decoupling of child Medicaid from the AFDC cash assistance program.
My final dissertation chapter investigates how a particular college fund guarantee affected achievements in higher education. Utilizing data from the National Longitudinal Survey of Youth (1979) and a difference-in-differences model, this work re-examines the impact of the Social Security Student Benefits Program (SSSBP) on post-secondary educational attainment, a topic first studied by Dynarski (2003). By exploiting a larger panel of data and exploring degree attainment at various ages, my coauthor and I find that disadvantaged youth potentially qualifying for SSSBP funds – e.g., those losing a father before they turned 18 – were over 20 pp more likely to obtain higher education degrees beyond their high school diploma than similar students who would have qualified for benefits, but-for the program’s termination in May 1982. Initial program impacts – i.e., those by age 23 – show an increase in Associate’s degree attainment. As these respondents age, however, many go on to obtain four year degrees. Impacts are large and statistically significant, and suggestive that social programs seeking to reduce the financial costs of Associate’s degrees – such as the one announced by President Obama in his 2015 State of the Union Address – could be well-targeted.
Groves, Lincoln H., "Three Essays on U.S. Social Policy’s Impact on the Human Capital Development of Young Adults At-Risk of Poverty" (2015). Dissertations - ALL. 271.