This paper examines the structure and consequences of eligibility rules for a major social program in the U.S. - the Job Training Partnership Act. We find that temporal and geographic variation in written eligibility rules has little consequence for the size and composition of the eligible population, but stable rules are important. The stable eligibility rules are inequitable because they discriminate on the basis of income sources and family status. We examine whether this inequity is a consequence of efficient screening, given standard objectives for government intervention in human capital markets. Many - but not all - of the JTPA eligibility rules are consistent with an efficient screening strategy.
Theresa Devine is a Visiting Scholar at the American Bar Foundation and Research Associate at the Harris School Center for Social Program Evaluation and Research Affiliate in the Population Research Center of the University of Chicago. James Heckman is Henry Schultz Distinguished Service Professor of Economics and Director of the Harris School Center for Social Program Evaluation at the University of Chicago and a Fellow of the American Bar Foundation. This research was supported by grants from the Russell Sage Foundation, NSF-SBER-91-11455, NSF-SES-90-23-776, NSF-SES-90-103-07, the American Bar Foundation, the Census Research Fellow Program, and NIH Postdoctoral Traineeship Program. We thank Jingjing Hsee for her excellent research assistance and David Hsu and Gerald Marschke for help in an early stage of the project. We also thank Joe Altonji, Jonathan Gruber, Jim Poterba, Kent Smith, and colleagues at the American Bar Foundation, Canadian Economics Association Meetings, Canadian Economic Reform Forum, University of Chicago, University of Illinois, NBER Labor Studies Summer Institute, NBER Public Economics Meeting, Northwestern, Ohio State, Population Association of America Meetings, Princeton, and Rutgers for many useful comments.