Klerman, Jacob Alex, and Steven J. Haider. 2004. "A Stock-Flow Analysis of the Welfare Caseload." Journal of Human Resources 39(4): 865-886.

This paper reconsiders the methods used in previous studies to assess the welfare caseload movements during the 1990s. We develop a model in which the welfare caseload is the net outcome of past flows onto and off of the caseload and show that such a stock-flow model can explain some of the anomalous findings in previous studies. We then estimate the stock-flow model using California administrative data. We find that approximately 50 percent of the caseload decline in California can be attributed to the declining unemployment rate. These estimates are more robust and larger than those obtained when applying more typical methods to the same California data.

Jacob Alex Klerman is a senior economist at RAND and a professor of economics at the Pardee RAND Graduate School. Steven J. Haider is an assistant professor of economics at Michigan State University. This work was funded in part by U.S. Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation (#99ASPE34A and #00ASPE353A) and by NICHD grant P50-HD12639. The opinions and conclusions expressed herein are solely those of the authors and should not be construed as representing the opinions or policy of any of the sponsors or related agencies. The data used in this paper come from confidential California administrative data and cannot be provided to others by the authors. Requests for these data should be addressed to the California Department of Social Services. The authors gratefully acknowledge the expert programming assistance of Elizabeth Roth. They also acknowledge the helpful suggestions of two anonymous referees, Jay Bhattacharya, V. Joseph Hotz, Darius Lakdawalla, David Loughran, Kathleen McGarry, Terra McKinnish, Regina Ripahn, Robert Schoeni, and the seminar participants at UC-Berkeley, UCLA, Cornell, IRP 2000 Summer Workshop, Michigan, Michigan State, UNC-Chapel Hill, RAND, Syracuse, and the Upjohn Institute for Employment Research. For information on how to acquire the data, authors may contact either author. Klerman: RAND; 1700 Main Street; Santa Monica, CA 90401; klerman@rand.org. Haider: Department of Economics; Michigan State University; 101 Marshall Hall; East Lansing, MI 48824; haider@msu.edu.