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American Journal of Evaluation
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What Are the Effects of Welfare Sanction Policies? Or, Using Propensity Scores as a Subgroup Indicator to Learn More From Social Experiments

Laura R. Peck

Arizona State University, Laura.Peck{at}asu.edu

This article uses propensity scores to identify subgroups of individuals most likely to experience a reduction in cash benefits because of sanctions in some of the programs that make up the National Evaluation of Welfare-to-Work Strategies. It extends program evaluation methodology by using propensity scoring to identify the subgroups of sanctioned and nonsanctioned welfare recipients. Specifically, the propensity score is used to identify the sample subset most likely to experience program sanction. In this application, the propensity score helps deal with an omitted variable problem, that of not knowing what the sanction status is in the control group (because they were not subject to the policies being tested). Findings reveal that being high sanction risk induces greater work levels and therefore higher earnings, but it also results in receiving less cash assistance so that sanctioned recipients have roughly the same net incomes as nonsanctioned ones.

Key Words: program evaluation • propensity scores • experimental design • subgroup analysis • welfare sanction

American Journal of Evaluation, Vol. 28, No. 3, 256-274 (2007)
DOI: 10.1177/1098214007304129
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