Means-tested Transfer Programs Research Articles

SNAP participation, diet quality, and obesity: robust evidence with estimation techniques without external instrumental variables

This paper examines the effects of the Supplemental Nutrition Assistance Program (SNAP) on obesity among women. We address several of the empirical challenges surrounding the estimation of said effects raised in Currie and Moffitt (in: Moffitt RA, Moffitt R (eds) Means-tested transfer programs in the USA. University of Chicago Press, Chicago, 2003). We do so by employing a battery of recently developed econometric methods that require only cross-sectional data, and alternative identification assumptions relative to the traditional instrumental variable used in the current literature. Our goal is to assess whether the common findings are robust to various methods. Using data from the National Health and Nutrition Examination Survey, we reach two important conclusions. First, the positive effect of SNAP on both obesity and the body mass index is robust to differing statistical and modeling assumptions, while statistical significance may vary. Second, we also find that decreased dietary quality among SNAP participants could be at best a weak candidate for explaining the difference in our findings (if any) on obesity.

How Means-Tested Transfer Programs Respond to Household Earned-Income Increases: Policy and Practice

We use data from the 2008 Survey of Income and Program Participation to estimate how four means-tested transfer programs respond to household earned-income increases. In general, the programs respo...

How Hard Should We Push the Poor to Save for Retirement?

More than half of U.S. states are working to establish programs what would automatically enrollment in Individual Retirement Accounts (IRAs) workers who are not offered a retirement plan by their employer. These programs are designed to address a perceived shortfall of retirement saving, particularly among low-wage workers who are less likely to be offered an employer-sponsored plan. But the designers of state-run auto-IRA plans fail to consider three questions: Do the poor need to save more for retirement? Will state-run auto-IRA plans increase net household savings? And, after accounting for interactions with means-tested government transfer programs, will state-run auto-IRA plans make the poor better off? The answer to all three questions may be “no.” First, tax data indicate that most low-income retirees have incomes adequate to maintain their pre-retirement standard of living. Second, recent research has found that employees automatically enrolled in retirement plans may accrue additional debts that offset much or all of their own contributions. Third, income- and asset-tests for federal and state transfer programs could reduce benefits to low-earners in substantially greater amounts than they could save in auto-IRA accounts. In light of these issues, policymakers should reconsider the design of state-run auto-IRA programs. One potential improvement is to exempt truly low-earning workers, such as those with earnings below $12,000, from automatic enrollment in these plans while leaving open the option to voluntary participate.

Economic Conditions and SSI Applications

The Supplemental Security Income (SSI) program provides federally-funded income support for individuals with disabilities, and has become one of the most important means-tested transfer programs in the United States. Previous studies have examined the effects of economic conditions on growth in disability caseloads, but most focus on the Social Security Disability Insurance (SSDI) program. Most work on SSI dates from before welfare reform, which had both direct and indirect effects on the composition of the population at risk for SSI participation. In this paper we examine the relationship between SSI application risk and economic conditions between 1996 and 2010, using data from the Survey of Income and Program Participation (SIPP) linked to the Social Security Administration’s 831 file, which includes monthly data on SSI (and SSDI) application and receipt. Results from hazard models suggest that higher state unemployment rates have a large, positive effect on the risk of SSI application among jobless individuals, and our evidence suggests that female potential applicants may be more responsive to local economic conditions than men. State-level TANF policies have no effect on SSI application risk but state fiscal distress significantly increases application risk. Given the continued growth of the SSI program, understanding these relationships is increasingly important and policy-relevant.

U.S. Social Policy and Family Complexity

The United States has a number of social policies that were designed explicitly to provide options and supports for individuals related to their family formation decisions, such as the Title X National Family Planning Program and the Healthy Marriage Initiative. At the same time, because social policies can have considerable implications for the populations they target, we have long known that government policy can impact family structure and individuals’ fertility decisions even when such an impact was not the policy’s stated objective. This article reviews both theoretical and empirical literature asking to what extent United States’ social policy affects the complexity of families. Specifically, we review the literature on divorce and custody laws, means-tested transfer programs, and policies designed to provide information and services related to family formation. We report findings, and discuss common themes across the literature and identify important gaps in knowledge.

Rising Extreme Poverty in the United States and the Response of Federal Means-Tested Transfer Programs

This study documents an increase in the prevalence of extreme poverty among US households with children between 1996 and 2011 and assesses the response of major federal means-tested transfer programs. Extreme poverty is defined using a World Bank metric of global poverty: $2 or less, per person, per day. Using the 1996–2008 panels of the Survey of Income and Program Participation (SIPP), we estimate that in mid-2011, 1.65 million households with 3.55 million children were living in extreme poverty in a given month, based on cash income, constituting 4.3 percent of all nonelderly households with children. The prevalence of extreme poverty has risen sharply since 1996, particularly among those most affected by the 1996 welfare reform. Adding SNAP benefits to household income reduces the number of extremely poor households with children by 48.0 percent in mid-2011. Adding SNAP, refundable tax credits, and housing subsidies reduces it by 62.8 percent.

An Evaluation of the Tax-Transfer Treatment of Married Couples in European Countries

This paper presents an evaluation of the tax-transfer treatment of married couples in 15 EU countries using the EUROMOD microsimulation model. First, we show that many tax-transfer schemes in Europe feature negative jointness defined as a situation where the tax rate on one person depends negatively on the earnings of the spouse. This stands in contrast to the previous literature on this question, which has focused on a specific form of positive jointness. The presence of negative jointness is driven by family-based and means-tested transfer programs combined with tax systems that usually feature very little jointness. Second, we consider the labour supply distortion on secondary earners relative to primary earners implied by the current tax-transfer systems, and study the welfare effects of small reforms that change the relative taxation of spouses. By adopting a small-reform methodology, it is possible to set out a simple analysis based on more realistic labour supply models than those considered in the existing literature. We present microsimulations showing that simple revenue-neutral reforms that lower the tax burden on secondary earners are associated with substantial welfare gains in most countries. Finally, we consider the tax-transfer implications of marriage and estimate the so-called marriage penalty. For most countries, we find large marriage penalties at the bottom of the distribution driven primarily by features of the transfer system.

Marginal Tax Rates Facing Low– and Moderate–Income Workers Who Participate in Means–Tested Transfer Programs

The combination of a progressive tax system with credits for low-income workers and means-tested transfer programs can create high marginal tax rates (MTRs) on earned income. We document the extent and distribution of statutory and actual MTRs for Wisconsin households with earned income in 2000 using a unique data set of merged tax, transfer program, and wage data. Nearly a quarter of unmarried tax filers with two or more dependents face MTRs of 50 percent or greater. Households between 100 percent and 250 percent of the federal poverty threshold and those using multiple means-tested programs are more likely to face high rates.

Book Review: Economic and Social Security and Substandard Working Conditions: Means-Tested Transfer Programs in the United States

Book Review: Economic and Social Security and Substandard Working Conditions: Means-Tested Transfer Programs in the United States

Robert A Moffitt (ed.), Means-tested Transfer Programs in the United States, National Bureau of Economic Research and University of Chicago Press, 2003, 644 pp.

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Welfare recipiency and savings outcomes in individual development accounts

The authors examined how welfare recipiency is associated with savings outcomes in individual development accounts (IDAs), a structured savings program for low-income people. They investigated whether welfare recipients can save if they are provided with incentives. Data for this study ore from the American Dream Demonstration (ADD), the first nationwide demonstration of IDAs. A Heckman two-step regression analysis suggests that, after controlling for a variety of program and participant characteristics, welfare recipiency, either before or at the time of enrollment in IDAs, is not correlated with program exits or savings outcomes. The findings suggest that welfare recipiency does not seem to affect savings performance in IDAs. Key words: individual development accounts (IDAs); savings; welfare recipients; welfare reform ********** Welfare recipients accumulate little wealth. or example, in 1994 more than 90% of welfare recipients reported less than $500 accumulated financial liquid assets Hurst & Ziliak, 2001). Welfare recipients may have little wealth because of limited ability to accumulate assets and structural barriers to wealth accumulation. One structural barrier may be their response to disincentives created by means-tested transfer programs such as Aid to Families with Dependent Children (AFDC)/Temporary Assistance for Needy Families (TANF), Supplemental Security Income (SSI), Medicaid, and food stamps. To qualify for benefits, a household's income and assets must be sufficiently low. For example, benefits are cut off in some states if liquid assets in the form of cash and deposits in bank accounts exceed $1,000. Under these conditions, asset limits may limit savings. Also, many nonpoor households have incentives for asset accumulation in the form of home mortgage interest tax deductions, tax deferments on retirement savings, and other tax benefits (Howard, 1997; Seidman, 2001), but few low-income households benefit from these asset-building policies (Sherraden, 1991). We examined the relationship between welfare recipiency and savings outcomes in a matched savings program for low-income people--individual development accounts (IDAs). IDAs are saving programs that provide incentives and an institutional structure for savings for low-income people. Account holders receive matching funds when they purchase assets that promote long-term well-being and financial self-sufficiency such as a home, postsecondary education, or microenterprise. We investigated whether current and former welfare recipients have the ability and willingness to save and whether their savings patterns differ from people who have never received welfare. Our study draws on a general research report by Schreiner and colleagues (2001), with closer attention to welfare recipiency and savings in IDAs. This study may have policy implications for welfare reform. First, the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 (P.L. 104-193) represents a fundamental change in the delivery of cash benefits to program participants (PRWORA, 1996). PRWORA replaced AFDC with TANF, a work-based program. Major changes under I'RWORA include time limits on receipt of cash assistance and greater control of program rules by states. The stated intent of the legislation was to end welfare dependency and promote self-sufficiency. Yet, very little programming has been developed to help welfare recipients become self-sufficient. Studies show that limited skills for self-sufficiency may prevent many welfare leavers from lifting themselves out of poverty, even if they work full-time (Edin & Lein, 1997; Loprest, 1999, 2001). Helping welfare recipients save and accumulate assets may increase their long-term well-being and self-sufficiency. In contrast to income, which refers to the flow of resources into a household, assets refer to the stock of resources in households. Assets include financial resources such as cash savings and stocks, capital such as homeownership, and business property. …

Marginal Tax Rate Cuts and the Public Tax Debate

Previous articleNext article No AccessFORUM ON THE ECONOMIC GROWTH AND TAX RELIEF RECONCILIATION ACT OF 2001Marginal Tax Rate Cuts and the Public Tax DebateCharles W. Calomiris and Kevin A. HassettCharles W. Calomiris Search for more articles by this author and Kevin A. Hassett Search for more articles by this author PDFPDF PLUS Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinkedInRedditEmail SectionsMoreDetailsFiguresReferencesCited by National Tax Journal Volume 55, Number 1March 2002 Published for: The National Tax Association Article DOIhttps://doi.org/10.17310/ntj.2002.1.07 Views: 2Total views on this site Citations: 2Citations are reported from Crossref © 2002 National Tax Association. All rights reserved.PDF download Crossref reports the following articles citing this article:Stephen D. Holt and Jennifer L. Romich Marginal Tax Rates Facing Low– and Moderate–Income Workers Who Participate in Means–Tested Transfer Programs, National Tax Journal 60, no.22 (Mar 2021): 253–276.https://doi.org/10.17310/ntj.2007.2.05Alan J. Auerbach The Bush Tax Cut and National Saving, National Tax Journal 55, no.33 (Mar 2021): 387–407.https://doi.org/10.17310/ntj.2002.3.02

Distributive effects of benefits and taxes.

In light of the growing federal deficit, pressure is mounting to cut federal spending. If the budget for social security programs is cut, who will suffer? This article presents the results of a study that investigated the degree to which taxes and public income transfers change the level of income, the degree of inequality in income distribution, and the poverty rates of various demographic groups. Major findings are that public income transfers are more powerful than taxes in equalizing the income distribution and that poverty reduction through non-means-tested transfer programs is more effective among elderly people, white people, and people in married-couple families, whereas poverty reduction through means-tested transfer programs is more effective among nonelderly people, black people, and people in female-headed families. Implications for social work practice are discussed.

Welfare Programs in the Rent-Seeking Society

Over the past fifteen years the interest-group theory of government behavior has shown itself to be an empirically rich and powerful explanatory tool. Applications have included environmental regulation [14; 17], Federal trucking regulation [15], the output of state legislatures [12], and numerous other government programs and activities. But one important subset of government programs has been consistently neglected in the literature: meanstested transfer programs. As a group, the poor are not well organized for political lobbying; they are dispersed and consequently face high organization costs. Further, as a potential lobbying group, the poor face potentially overwhelming free-rider problems (i.e., all of the poor stand to benefit from poverty programs that some subset of the poor achieve via lobbying). For this reason, the interest group theory of government seems to offer meagre explanatory power in the case of poverty programs. Many who otherwise typically interpret governmental activity from the perspective of rent-seeking analysis make an exception when it comes to welfare programs, and argue that here ideology (mostly, egalitarian ideology) has for some unexplained reason dominated the political process. There is sometimes a reference to the imperialism of the welfare bureaucracy which benefits indirectly from any expansion of the poverty program system, and admittedly this seems to be a plausible partial explanation for the rapid recent growth of welfare spending. Finally, Tullock [19] has adopted a radical reinterpretation, arguing that the welfare state does not really transfer net wealth to the poor at all, but actually represents a thinly disguised system of net transfers to better organized middle class interest groups. The Tullock hypothesis is designed mainly to explain major patterns of government transfer spending. It represents an attempt to reinterpret the net effect of transfer spending on the wealth positions of different income groups, and does not attempt to explain specific welfare programs from an interest group perspective. While this approach has merit, an interest group analysis of specific welfare programs must concern itself with the functional consequences of particular programs and the interest groups which benefit from them, both directly and indirectly. But such an analysis should not necessarily presuppose that the poor themselves are the most important politically relevant interest group involved in the lobbying process, or even that they play a major role. Very substantial transfers to the poor, or to any other recipient group, may ultimately be the result of interest group pressure in the