Working Paper: NBER ID: w17042
Authors: Yonatan Benshalom; Robert A. Moffitt; John Karl Scholz
Abstract: We assess the effectiveness of means-tested and social insurance programs in the United States. We show that per capita expenditures on these programs as a whole have grown over time but expenditures on some programs have declined. The benefit system in the U.S. has a major impact on poverty rates, reducing the percent poor in 2004 from 29 percent to 13.5 percent, estimates which are robust to different measures of the poverty line. We find that, while there are significant behavioral side effects of many programs, their aggregate impact is very small and does not affect the magnitude of the aggregate poverty impact of the system. The system reduces poverty the most for the disabled and the elderly and least for several groups among the non-elderly and non-disabled. Over time, we find that expenditures have shifted toward the disabled and the elderly, and away from those with the lowest incomes and toward those with higher incomes, with the consequence that post-transfer rates of deep poverty for some groups have increased. We conclude that the U.S. benefit system is paternalistic and tilted toward the support of the employed and toward groups with special needs and perceived deservingness.
Keywords: Antipoverty programs; Poverty rates; Social insurance; Mean-tested programs
JEL Codes: H53; I3
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Benefits provided (J32) | Poverty reduction (I32) |
| Benefits provided (J32) | Poverty reduction for disabled (I32) |
| Benefits provided (J32) | Poverty reduction for elderly (I32) |
| Shift in distribution of benefits (D39) | Increase in deep poverty rates for certain demographics (I32) |
| Behavioral side effects (D91) | Overall poverty impact (F63) |