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The Long-Term Effects of Cash Assistance

Author

Listed:
  • David J. Price
  • Jae Song

Abstract

We investigate the long-term effects of cash assistance on beneficiaries and their children among participants in the Seattle-Denver Income Maintenance Experiment. Treated families in this randomized experiment received thousands of dollars in extra government benefits for three or five years in the 1970s. We match experimental records to Social Security Administration data using a novel algorithm, finding that treatment decreased adults' postexperimental annual earnings by $1,800 and increased their disability benefit applications. Effects were strongest around retirement age; evidence suggests possible occupational mechanisms. In contrast, children experienced no significant effects on earnings or interaction with the disability system.

Suggested Citation

  • David J. Price & Jae Song, 2026. "The Long-Term Effects of Cash Assistance," American Economic Journal: Applied Economics, American Economic Association, vol. 18(4), pages 154-199, October.
    • Handle: RePEc:aea:aejapp:v:18:y:2026:i:4:p:154-99
    DOI: 10.1257/app.20210064
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    More about this item

    JEL classification:

    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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