The impact of welfare reform on local labor markets

Abstract

We develop a local labor market information system to assess the labor market effects of recently adopted welfare reform laws. Using the Cleveland-Akron metropolitan area as a prototype, we develop an occupationally and geographically specific inventory of projected job openings and measure the skill mismatch between projected job openings and the welfare population likely to enter the labor market. We find the skill mismatches are quite large: Following implementation of reform, welfare recipients entering the labor force would initially have to claim anywhere from 34 to 61 percent of expected low-skill job openings in order to become fully employed. Labor market opportunities are further diminished if one takes into account the effect of gender and space in limiting job accessibility. Welfare recipients entering the labor market as a result of reform would require from 40 to 75 percent of jobs remaining if predominately male occupations are removed from consideration. The AFDC recipients who depend on public transportation, even in extraordinarily long commutes, can access only 40 to 44 percent of entry-level job openings. © 1998 by the Association for Public Policy Analysis and Management