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Explaining Welfare Reform: Public Choice and the Labor Market

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Author Info
Robert Moffitt

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Abstract

This paper seeks to identify factors which could plausibly have led to the contractionary welfare reform initiatives begun at the state and federal levels in the U.S. in the 1990s, initiatives concentrated on the AFDC program. A review of aggregate time series evidence, cross-section regression research, and studies of attitudes toward welfare spending and toward welfare recipients suggests a role for three types of factors. First, a major expansion of the U.S. welfare system in the late 1980s in terms of expenditures and caseloads may have led voters to desire to retrench by cutting back on the AFDC program, even though that program was not primarily responsible for the expansion. Second, declines in the relative and absolute levels of household income, wages, and employment rates among the disadvantaged population may have driven up caseloads and costs, increased the social distance of voters from the poor, heightened concern with work incentives, and may have led, more generally, to a decrease in the perceived deservingness of the poor. Third, a surge of births to unmarried mothers in the 1980s is suggested, by cross-sectional and attitudinal evidence, to have led to a reduction in voter support for the AFDC program. Copyright Kluwer Academic Publishers 1999

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Publisher Info
Article provided by Springer in its journal International Tax and Public Finance.

Volume (Year): 6 (1999)
Issue (Month): 3 (August)
Pages: 289-315
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Handle: RePEc:kap:itaxpf:v:6:y:1999:i:3:p:289-315

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Keywords: welfare public choice public spending

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Peltzman, Sam, 1980. "The Growth of Government," Journal of Law & Economics, University of Chicago Press, vol. 23(2), pages 209-87, October.
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  2. Moffitt, Robert, 1992. "Incentive Effects of the U.S. Welfare System: A Review," Journal of Economic Literature, American Economic Association, vol. 30(1), pages 1-61, March. [Downloadable!] (restricted)
  3. Orr, Larry L, 1976. "Income Transfers as a Public Good: An Application to AFDC," American Economic Review, American Economic Association, vol. 66(3), pages 359-71, June. [Downloadable!] (restricted)
  4. Varian, Hal R., 1980. "Redistributive taxation as social insurance," Journal of Public Economics, Elsevier, vol. 14(1), pages 49-68, August. [Downloadable!] (restricted)
  5. Pauly, Mark V., 1973. "Income redistribution as a local public good," Journal of Public Economics, Elsevier, vol. 2(1), pages 35-58, February. [Downloadable!] (restricted)
  6. Chinhui Juhn & Kevin M. Murphy & Robert H. Topel, 1992. "Why Has the Natural Rate of Unemployment Increased over Time?," NBER Reprints 1694, National Bureau of Economic Research, Inc.
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  7. Robin Boadway & Michael Keen, 1999. "Redistribution," Working Papers 983, Queen's University, Department of Economics. [Downloadable!]
    Other versions:
    • Boadway, Robin & Keen, Michael, 2000. "Redistribution," Handbook of Income Distribution, in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 12, pages 677-789 Elsevier. [Downloadable!] (restricted)
  8. Howard Chernick, 1998. "Fiscal Effects of Block Grants for the Needy: An Interpretation of the Evidence," International Tax and Public Finance, Springer, vol. 5(2), pages 205-233, May. [Downloadable!] (restricted)
  9. Rebecca M. Blank, 1997. "What Causes Public Assistance Caseloads to Grow?," NBER Working Papers 6343, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  10. Jason Barabas, 1998. "Wage Erosion, Economic Assessments, and Social Welfare Opinions," JCPR Working Papers 56, Northwestern University/University of Chicago Joint Center for Poverty Research. [Downloadable!]
  11. Preston, Ian & Ridge, Michael, 1995. "Demand for Local Public Spending: Evidence from the British Social Attitudes Survey," Economic Journal, Royal Economic Society, vol. 105(430), pages 644-60, May. [Downloadable!] (restricted)
  12. Peter H. Lindert, . "Three Centuries Of Inequality In Britain And America," Department of Economics 97-09, California Davis - Department of Economics. [Downloadable!]
  13. Shroder, Mark, 1995. "Games the States Don't Play: Welfare Benefits and the Theory of Fiscal Federalism," The Review of Economics and Statistics, MIT Press, vol. 77(1), pages 183-91, February. [Downloadable!] (restricted)
  14. Kristov, Lorenzo & Lindert, Peter & McClelland, Robert, 1992. "Pressure groups and redistribution," Journal of Public Economics, Elsevier, vol. 48(2), pages 135-163, July. [Downloadable!] (restricted)
  15. Poterba, James M, 1994. "State Responses to Fiscal Crises: The Effects of Budgetary Institutions and Politics," Journal of Political Economy, University of Chicago Press, vol. 102(4), pages 799-821, August. [Downloadable!] (restricted)
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  16. Moffitt, Robert, 1983. "An Economic Model of Welfare Stigma," American Economic Review, American Economic Association, vol. 73(5), pages 1023-35, December. [Downloadable!] (restricted)
  17. Peter Gottschalk & Timothy M. Smeeding, 1997. "Cross-National Comparisons of Earnings and Income Inequality," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 633-687, June. [Downloadable!] (restricted)
  18. Grossman, Herschel I., 1995. "Robin hood and the redistribution of property income," European Journal of Political Economy, Elsevier, vol. 11(3), pages 399-410, September. [Downloadable!] (restricted)
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Cited by:
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  1. Christian Holzner & Volker Meier & Martin Werding, 2006. "Workfare, Monitoring, and Efficiency Wages," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
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