The Effect of Reducing Welfare Access on Employment, Health, and Children's Long-Run Outcomes

Welfare caseloads in North America halved following reforms in the 1990s and 2000s. This study shows how this shift affected families by linking Canadian welfare records to tax returns, medical spending, educational attainment, and crime data. It finds that substantial and heterogeneous employment responses that increased average income despite reduced transfers. It also finds zero effects on aggregate health expenditures, but mothers saw reduced preventative care and increased mental health treatment, consistent with the transition to employment elevating time pressure and stress.