Sullivan, James X. 2006. “Welfare Reform, Saving, and Vehicle Ownership: Do Asset Limits and Vehicle Exemptions Matter?” Journal of Human Resources 41(1): 72–105.
This paper examines whether AFDC/TANF asset tests affect the asset holdings of low-educated single mothers. Special emphasis is given to vehicle assets that make up a very significant share of total wealth for poor families. Consistent with other recent research, I find little evidence that asset limits have an effect on the amount of liquid assets that single mothers hold. However, I find evidence that vehicle exemptions do have an important effect on vehicle assets. Also, the results indicate that single mothers are not substituting vehicle equity for liquid assets in response to more relaxed restrictions on vehicles.
James X. Sullivan is an assistant professor in the department of economics and econometrics at the University of Notre Dame. The author thanks Joseph Altonji, Rebecca Blank, Thomas Deleire, Steven Haider, Jonah Gelbach, Mark Long, Bruce Meyer, Lucie Schmidt, Christopher Taber, Jennifer Ward-Batts, Jim Ziliak, two anonymous referees, and seminar participants at Michigan State University, the University of British Columbia, the University of Kentucky Center for Poverty Research, the University of Michigan, and the Upjohn Institute. Vladimir Sokolov provided excellent research assistance for this project. Much of the research for this project was done while the author was a visiting scholar at the National Poverty Center at the University of Michigan. The Upjohn Institute for Employment Research and the Seng Foundation Endowment at the Institute for Scholarship in the Liberal Arts, College of Arts and Letters, University of Notre Dame provided generous support for this work. The data used in this article can be obtained beginning August 2006 through July 2009 from James X. Sullivan, University of Notre Dame, 447 Flanner Hall, Notre Dame, IN, 46556, sullivan.197@nd.edu.