Extending the Employment Continuum: Well-Being in Welfare Transitions

Abstract

Nothing is so certain as that the evils of idleness can be shaken off by hard work. Seneca, Epistles , 56: 9 The most immediate route by which the ex-welfare population can find jobs is by competing with and displacing unqualified workers who are already employed, either by being in some way a more suitable employee or, more likely, by offering to work for less than the incumbent is getting. Unqualified workers are presumably excellent substitutes for one another, so only a very small wage cut would be needed. But pure displacement is just musical chairs: more players and the same number of chairs. Solow, 1998, pp. 27–28 INTRODUCTION Welfare in the Employment Continuum Welfare as Underemployment . Welfare may appear to be outside the domain of work and employment. In the United States, the term “welfare” has come to refer to public funds used to assist parents in the care of their young children. Usually, this has meant cash payments supplemented by other benefits such as food stamps and health coverage. In order to limit such assistance to the legitimately needy, eligibility rules have sometimes specified that the adult recipient (almost always the mother) have no source of income, such as her own job or the job of a working spouse. When such a recipient is neither working nor looking for work, she is officially counted as out of the labor force (OLF). In practice, however, welfare recipients have significant connections to the labor market.