In May of 1998, the Relocation Assistance Program (RAP) was introduced in Kentucky as a means of aiding welfare recipients to achieve self-sufficiency by offering lump-sum payments to those who wished to relocate to seek or accept employment. Unlike other relocation assistance programs, this program provides moving assistance to welfare clients rather than to unemployed persons or dislocated workers. We relate this program to other relocation programs as well as to the UI bonus experiments. We also survey the theoretical literature to give some intuition for the effects of the program on earnings and employment for welfare clients. Using program participation to measure the treatment effect is a contentious issue due to program requirements linking employment to participation. Given that advertising would certainly influence participation, we construct an advertising proxy that differs from program uptake/utilization to identify the program’s effects. Working with a relatively short, panel administrative dataset, we find that a one standard deviation increase in the RAP proxy is associated with a 20.4 percent increase in employment and a 18.3 percent increase in quarterly unconditional earnings, which is robust to various specification checks.
Research
Welfare Reform
DP2008-01.pdf