Effect of maternal welfare receipt on the probability

Reference no: EM131763035

Question: It is sometimes asserted that the welfare system creates a form of intergenerational "dependency." That is, children born into households that receive welfare will themselves become more apt to receive welfare when they attain adulthood. The data found at https://www.wiley.com/college/ashenfelter provide information on the following variables:

Recwelfm = 1 if the mother received welfare.

Recwelfd = 1 if the mother's daughter received welfare when she attained adulthood.

hiFaminc = the log income of the mother's family.

a. What percentage of daughters received welfare? What is the percentage among daughters whose mothers received/did not receive welfare? Do the raw data suggest grounds for a "de-pendency" effect?

b. Estimate the model Recwelfdi = β0 + βiRecwelfrai + εi using OIS. What is the effect of maternal receipt on her daughter's welfare receipt in adulthood?

c. Now, estimate a probit model relating the daughter's welfare receipt to her mother's welfare receipt. Calculate the effect of maternal welfare receipt on the probability the daughter re-ceives welfare as an adult using the estimated coefficients.

d. Repeat (b) and (c) including Famine in the model. What do you conclude?

Reference no: EM131763035

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