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 in the attached file 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?
Information related to above question is enclosed below:
Attachment:- Data.rar