Abstract
Welfare policy in the United States is strongly influenced by intergovernmental factors. This analysis traces the effects of federal financial incentives on state welfare policy decisions across programs and examines how changes in federal incentives affect state policy choices over time. The data indicate that higher levels of federal participation are associated with substantial reductions in variance of welfare grants among the states and with higher levels of interstate equity. These findings imply that significant shifts in welfare outputs would result from a devolution of responsibility for welfare to the states.
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