Class Notes 040908 Poverty and Income Maintenance Part 2

Class Notes 040908 Poverty and Income Maintenance Part 2 -...

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4/9/08 Poverty and Income Maintenance 1.  What are main means-tested transfer programs in U.S.? 2. What is best way to design  transfer programs? 3. What has happened in U.S. policy, and what are the effects? Participation in Transfer Programs Programs listed in CBO Study: Medicaid/SCHIP     —health insurance for low income families EITC     —credit for low earners Food Stamps     —in-kind benefit, mostly for people already getting some cash benefit  (TANF/SSI). AFDC/TANF     --basically for single parents not working SSi     —elderly widows; adults unable to work, who never worked Trends last 20 years :
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Medicaid way up since 1990 EITC way up since 1990 AFDC     /Food Stamps  down a lot since mid-1990s welfare reform Theory of Means-Tested Transfers Concerned about how transfer programs affect labor supply
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Unformatted text preview: Use labor/leisure tradeoff (Moffitt) SEE FIGURES A-E IN BINDER Welfare Reform By early 1990s, welfare programs under attack from many people Disincentives to work very strong (though EITC, Medicaid changes already starting to work) Also clear that propensity to choose welfare was being passed from one generation to anotherintergenerational transmissions Led to sharp change in mid-1990s; having a child became an insufficient reason for continuous welfare Question Has this been a success, or are lots of people worse off than before? In bottom 20% of income, families with children have seen strong income gains Mostly because of earnings/EITC...
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This note was uploaded on 04/28/2008 for the course ECON 401 taught by Professor Sabelhaus during the Spring '08 term at Maryland.

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Class Notes 040908 Poverty and Income Maintenance Part 2 -...

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