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Trends in the Level and Distribution of Income Support

In: Tax Policy and the Economy, Volume 24

Author

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  • Robert Moffitt
  • John Karl Scholz

Abstract

Means-tested and social insurance programs in the U.S. have been transformed over the last 25 years, with expansions in Medicare and Medicaid, the Earned Income Tax Credit, and Supplemental Security Income, and with contractions in Temporary Assistance for Needy Families. We examine the effect of these changes on benefits received by families. We find that transfer program expenditures in total rose from 1984 to 2004 but the increase was spread unevenly across different demographic groups and income classes. Very poor elderly, disabled, and childless families received greatly increased expenditures, mostly arising from Social Security, SSDI, SSI, and the health programs. Very poor single parent and two-parent households experienced declines in expenditures, driven largely by lower recipiency rates, benefit receipt, or both in the AFDC/TANF and Food Stamp programs. For example, AFDC-TANF participation for one-adult families with children and market income below 50 percent of the poverty line fell from 62 percent in 1984 to 24 percent in 2004. However, expenditures received by one- and two-parent households further up the income scale increased, largely because of expansions of the EITC. Thus there was a redistribution of income from the very poor to the near-poor and nonpoor for these one- and two-parent households, as well as an overall relative redistribution from them to the elderly, disabled, and childless.
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Suggested Citation

  • Robert Moffitt & John Karl Scholz, 2010. "Trends in the Level and Distribution of Income Support," NBER Chapters,in: Tax Policy and the Economy, Volume 24, pages 111-152 National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberch:11969
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    References listed on IDEAS

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    1. Bruce D. Meyer & Wallace K. C. Mok & James X. Sullivan, 2015. "Household Surveys in Crisis," Journal of Economic Perspectives, American Economic Association, vol. 29(4), pages 199-226, Fall.
    2. Bruce D. Meyer & James X. Sullivan, 2009. "Five Decades of Consumption and Income Poverty," NBER Working Papers 14827, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Bruce D. Meyer & Nikolas Mittag, 2015. "Using Linked Survey and Administrative Data to Better Measure Income: Implications for Poverty, Program Effectiveness and Holes in the Safety Net," Upjohn Working Papers and Journal Articles 15-242, W.E. Upjohn Institute for Employment Research.
    2. Leoš Vítek, 2011. "Fiscal Instruments of a Support of the Families with Children and their Changes in Developed Countries," European Financial and Accounting Journal, University of Economics, Prague, vol. 2011(4), pages 60-84.
    3. Meyer, Bruce D. & Mittag, Nikolas, 2017. "Using Linked Survey and Administrative Data to Better Measure Income: Implications for Poverty, Program Effectiveness and Holes in the Safety Net," IZA Discussion Papers 10943, Institute for the Study of Labor (IZA).
    4. Olga Gorbachev & Keshav Dogra, 2009. "Evolution of Consumption Volatility for the Liquidity Constrained Households over 1983 to 2004," ESE Discussion Papers 193, Edinburgh School of Economics, University of Edinburgh.
    5. Olivier Bargain & Mathias Dolls & Dirk Neumann & Andreas Peichl & Sebastian Siegloch, 2011. "Tax-Benefit Systems in Europe and the US: Between Equity and Efficiency," CESifo Working Paper Series 3534, CESifo Group Munich.
    6. María Alzúa & Guillermo Cruces & Laura Ripani, 2013. "Welfare programs and labor supply in developing countries: experimental evidence from Latin America," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(4), pages 1255-1284, October.
    7. Pac, Jessica & Nam, Jaehyun & Waldfogel, Jane & Wimer, Chris, 2017. "Young child poverty in the United States: Analyzing trends in poverty and the role of anti-poverty programs using the Supplemental Poverty Measure," Children and Youth Services Review, Elsevier, vol. 74(C), pages 35-49.
    8. Norbert Berthold & Mustafa Coban, 2014. "Kombilöhne gegen Erwerbsarmut: Warum die USA erfolgreicher sind als Deutschland," Wirtschaftsdienst, Springer;German National Library of Economics, vol. 94(2), pages 118-124, February.
    9. Bönke, Timm & Eichfelder, Sebastian & Utz, Stephen, 2012. "Uneven treatment of family life? Horizontal equity in the U.S. tax and transfer system," Discussion Papers 2012/18, Free University Berlin, School of Business & Economics.
    10. repec:nbr:nberch:14003 is not listed on IDEAS
    11. Chung, Yiyoon, 2015. "Does SNAP serve as a safety net for mothers facing an economic shock? An analysis of Black and White unwed mothers' responses to paternal imprisonment," Children and Youth Services Review, Elsevier, vol. 57(C), pages 179-192.
    12. Albrecht, James & van Vuuren, Aico & Vroman, Susan, 2015. "The black–white wage gap among young women in 1990 vs. 2011: The role of selection and educational attainment," Labour Economics, Elsevier, vol. 33(C), pages 66-71.
    13. Bruce Meyer & Nikolas Mittag, 2017. "Using Linked Survey and Administrative Data to Better Measure Income: Implications for Poverty, Program Effectiveness and Holes in the Safety Net," Working Papers 2017-075, Human Capital and Economic Opportunity Working Group.

    More about this item

    JEL classification:

    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty

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