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How do benefit adjustments for government transfer programs compare with their participants' inflation experiences?

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  • Leslie McGranahan
  • Anna L. Paulson

Abstract

The authors measure the inflation experienced by demographic groups that likely received benefits from major government transfer programs during the period 1980–2010. They then compare the group-specific inflation measures with the transfer programs’ benefit adjustments, which are typically based on aggregate inflation. The extent to which the program benefits keep up with group inflation differs across the programs and their targeted groups, depending on both the ways in which the benefits are adjusted for price changes and the spending patterns of the various groups.

Suggested Citation

  • Leslie McGranahan & Anna L. Paulson, 2011. "How do benefit adjustments for government transfer programs compare with their participants' inflation experiences?," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q IV, pages 113-136.
  • Handle: RePEc:fip:fedhep:y:2011:i:qiv:p:113-136:n:v.35no.4
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    References listed on IDEAS

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    1. Bruce D. Meyer & Dan T. Rosenbaum, 2001. "Welfare, the Earned Income Tax Credit, and the Labor Supply of Single Mothers," The Quarterly Journal of Economics, Oxford University Press, vol. 116(3), pages 1063-1114.
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    3. Leslie McGranahan, 2008. "Food inflation and the consumption patterns of U.S. households," Chicago Fed Letter, Federal Reserve Bank of Chicago, issue Oct.
    4. Robert Haveman & Karen Holden & Kathryn Wilson & Barbara Wolfe, 2003. "Social security, age of retirement, and economic well-being: Intertemporal and demographic patterns among retired-worker beneficiaries," Demography, Springer;Population Association of America (PAA), vol. 40(2), pages 369-394, May.
    5. Bart Hobijn & David Lagakos, 2005. "Inflation Inequality In The United States," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 51(4), pages 581-606, December.
    6. Hanson, Kenneth & Andrews, Margaret S., 2008. "Rising Food Prices Take a Bite Out of Food Stamp Benefits," Economic Information Bulletin 58624, United States Department of Agriculture, Economic Research Service.
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