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Poverty in America: Is Welfare the Answer or the Problem?

  • David T. Ellwood
  • Lawrence H. Summers

This paper reviews the current policies for fighting poverty and explores the impact they have had. We begin by reviewing trends in poverty, poverty spending and economic performance. It is immediately apparent that economic performance is the dominant determinant of the measured poverty rate over the past two decades. Government assistance programs expanded greatly over this period, but the growth in cash assistance was too modest to have major effects, and the large growth in in-kind benefits could not reduce measured poverty since such benefits are not counted as income. Next we focus on three groups: the disabled, female family heads, and unemployed black youth. We find little evidence that government deserves the blame for the problems of each group, and suggest that the broad outlines of current policies are defensible on economic grounds.

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File URL: http://www.nber.org/papers/w1711.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 1711.

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Date of creation: Oct 1985
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Publication status: published as Ellwood, David T. and Lawrence H. Summers. "Poverty in America: Is Welfare the Answer or the Problem?" in Fighting Poverty: What Works and What Doesn't, eds. S.Bazinger and D. Wienberg, Cambridge: Harvard University Press, 1986, pp. 78-105
Handle: RePEc:nbr:nberwo:1711
Note: LS
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  1. Danziger, Sheldon & Haveman, Robert & Plotnick, Robert, 1981. "How Income Transfer Programs Affect Work, Savings, and the Income Distribution: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 19(3), pages 975-1028, September.
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