Toro
Diamond Member
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.
An Assessment of the Effectiveness of Anti-Poverty Programs in the United States
With anti-poverty programs under serious attack in Washington, heres something to keep in mind: a major new study from the National Bureau of Economic Research (NBER) finds that public programs keep one in six Americans out of poverty primarily the elderly, disabled, and working poor and that the poverty rate would double without these programs.
Without the cash and non-cash income provided by programs such as Social Security, SNAP (formerly food stamps), and the Earned Income Tax Credit:
* The share of Americans below the poverty line in 2004 ($19,307 for a family of four) would have more than doubled, from 13.5 percent to 29 percent. That is, 45 million more Americans would have been poor.
* The share of Americans in deep poverty, with incomes below half the poverty line, would have more than tripled, to 21 percent.
* The share of Americans who are poor or near-poor, with incomes below one-and-a-half-times the poverty line, would have risen to about 40 percent.
Off the Charts Blog | Center on Budget and Policy Priorities | Blog Archive | Public Programs Keep Millions Out of Poverty, New Study Shows