Subsidized Vehicle Acquisition and Earned Income in the Transition from Welfare to Work

Abstract

Successful transition from welfare to work depends on the availability of supporting services such as reliable transportation and affordable childcare. Despite this recognition, few empirical studies analyze the impacts of reliable personal transportation programs on individuals in transition. This study examines the impacts on earned income of the Good News Garage, a small-scale vehicle donation-and-sales program in Vermont. Using reduced-form random effects and censored regression models to account for the simultaneity of decisions to work and participate in welfare programs, we examine the impacts of this vehicle acquisition program for a small group of individuals. Our analyses indicate that the program results in a statistically significant increase in both earned income and the probability of employment.