This analysis utilizes longitudinal survey and administrative data on 1998 welfare recipients in Illinois to assess whether different types of grant reductions are associated with subsequent work, welfare receipt, and hardships. Results show that imposed sanctions are inversely associated with formal work and earnings, as well as with increases in informal work, other work activities, and food hardships. Threats to sanction are unassociated with formal work and welfare outcomes but positively associated with informal work, other work activities, and rent hardship. Greater knowledge of welfare rules is associated with more formal work, less welfare receipt, and less hardship.
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