Boskin, Michael J., and Frederick C. Nold. 1975. "A Markov Model of Turnover in Aid to Families with Dependent Children." Journal of Human Resources 10(4):467-481.

In order to gain some insight into turnover in the welfare population, a two-state (on and off welfare) Markov chain transition probability matrix is estimated with longitudinal data on welfare recipients coming on welfare in 1965. Results indicate that an enormous amount of turnover occurs in the welfare population and that the average duration of time on welfare per time on welfare is relatively modest for this group. Persons facing a wage below the minimum wage and/or high unemployment are less likely to leave welfare and more likely to return, likely to stay off for shorter periods and on for longer periods, and more likely to be on welfare than are those with low expected unemployment or wages above the minimum.

Boskin is Assistant Professor of Economics, Stanford University, and on the staff of the National Bureau of Economic Research. Nold is Assistant Professor of Economics, University of Santa Clara. The authors wish to thank T. Amemiya, T. W. Anderson, D. McFadden, R. Hall, the referees, and seminar participants at NBER, SRI, and Stanford and the NSF-NBER Conference on Decision Rules for valuable advice; Leonard Carlson for research assistance; and Thomas Moore for programming assistance. The authors were supported, respectively, by Manpower Administration Grant No. 51-06-73-06 and NSF Grant GS-39906; they thank the Manpower Administration and NSF for this support.

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US ISSN 0022-166X

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