The impact of AFDC on birth decisions and program participation

A longitudinal study examining how the level of AFDC benefits and the per-child increment affect births. Although the findings support the "AFDC benefits cause births" hypothesis, the author shows that eliminating the new-birth increment would reduce total program costs by less than 3 percent, since both the per-dollar effect of benefits on births and the per-child increments themselves are small.Demography ; Welfare

Growth and poverty revisited

An explanation of an alternative analysis of poverty based on consumption rather than on annual income, which disputes the documented breakdown in progress against poverty in the 1980s and concludes that the poor appear to benefit from a growing economy now as much as in previous decades.Gross domestic product ; Poverty

Does means-testing welfare discourage saving? Evidence from the National Longitudinal Survey of Women

An empirical test of AFDC's asset limit, finding that after correcting for the potential endogeneity of policy, a $1 difference in limits implies a difference in potential AFDC recipients' wealth of 30 cents. ; This paper uses a stochastic cost frontier to examine the scale economies, cost efficiencies, and technological change of three payments instruments--check, automated clearinghouse (ACH) transfers, and Fedwire processing--provided by the Federal Reserve over the period 1990-94.Saving and investment ; Welfare

A Longitudinal Analysis of Entries and Exits of the Low-Income Elderly to and from the Supplemental Security Income Program

This paper is the first to analyze eligibility and participation spells and estimate dynamic models of SSI participation by the aged. We first describe eligibility and participation spells and estimate competing-risk models of the determinants of transitions. Next, we present evidence of extensive measurement error in the expected SSI benefit and the associated imputed eligibility status of sample members. We compare and contrast two approaches to ameliorating this error. A cross-section approach exploits self-reports of participants’ benefits, and a longitudinal approach makes inferences from time variation in the computed benefit. We find that the hazard model estimates vary little with regard to whether or which particular measurement error correction is employed. Finally, the longitudinal patterns of eligibility and participation suggest that take-up rates among the persistently eligible are nearly 80 percent.

The Supplemental Security Income Program and Incentives to Take Up Social Security Early Retirement: Empirical Evidence from Matched SIPP and Social..

Features of the Supplemental Security Income (SSI) program and the social security retirement system may interact in a manner that creates incentives for prospective SSI recipients to take social security early retirement (SSER). This paper takes a first close look at this issue. The work disincentives posed by SSI rules and the potential interactions between the SSI and SSER programs are outlined in a basic theoretical framework. The hypotheses that emerge can be tested using public-use microdata linked to Social Security Administration records. We first present evidence supporting the hypothesis that SSI rules induce prospective SSI recipients to substantially reduce work activity (by various measures) prior to age 65. We then present two types of evidence on SSI-SSER interactions. We do not find a simple correspondence between generous SSI benefits and SSER use, which might be an expected indirect SSI-SSER interaction. However, estimates for some specifications for SSER receipt, derived directly from the theoretical interaction between SSER and SSI rules through the household budget constraint, provide evidence of a direct interaction between SSER and SSI, with SSI inducing use of SSER for those individuals for whom the SSI-SSER interaction eliminates the reduction in benefits associated with early receipt of social security benefits.

Consequences of means testing Social Security: evidence from the SSI program

A treatise that draws inferences about the potential behavorial responses to means testing Social Security by examining the effects of the Supplementary Security Income program for the aged on wealth accumulation and employment.Labor supply ; Social security

Public Health Insurance and SSI Program Participation Among the Aged

Previous researchers have noted that the ‘categorical’ Medicaid eligibility accompanying the welfare programs Aid to Families with Dependent Children (AFDC) and Supplemental Security Income (SSI) often far exceeds the value of these programs’ cash benefits. It may be the case that the accompanying health insurance, not the cash benefit, is often the decisive factor in welfare participation. If so, welfare participation should decrease when cash and health insurance benefits are unbundled. We present a simple model of program participation with heterogeneous valuation of health insurance and transaction costs of participation. We evaluate the following four implications of the model: 1) SSI participation declines with the expansion of alternative routes to Medicaid (i.e., noncategorical Medicaid); 2) the availability of noncategorical Medicaid increases Medicaid participation among SSI nonparticipating eligibles; 3) the average SSI benefit collected by welfare recipients is higher when noncategorical Medicaid is available; and 4) the average SSI benefit rejected by nonparticipating SSI eligibles is higher when noncategorical Medicaid is available. Overall, the findings on the model’s testable implications are mixed. The estimates imply strikingly large effects of the presence of alternative routes to Medicaid on both SSI and Medicaid participation, but the results for the hypotheses about SSI benefit amounts are sensitive to controls for recipient characteristics.

SSI, Labor Supply, and Migration

The Supplemental Security Income (SSI) program in the United States creates incentives for potential aged recipients to reduce labor supply prior to becoming eligible, and past research finds evidence of such behavior for older men. There may be a migration response to across-state variation in SSI benefits, which is of interest in its own right and can bias estimates of the effects of SSI benefits on labor supply. We fail to find evidence that older individuals migrate in response to SSI benefits, or that the labor supply disincentive effects of SSI are spurious and instead reflect migration behavior.Supplemental Security Income; Migration; Labor supply

Understanding differences in regional poverty rates

An examination of the huge variation in U.S. regional poverty rates, showing that although demographic, policy, and cost-of-living factors all play a role, economic differences are key.Income ; Regional economics

The Effects of Changes in State SSI Supplements on Pre-Retirement Labor Supply

Because the Supplemental Security Income (SSI) program is means-tested, with both income limits and asset limits, those on the margin of eligibility for the elderly component of the program face incentives to reduce labor supply (or earnings) prior to becoming eligible. Our past research relying on cross-state variation in SSI benefits found evidence consistent with the predicted negative labor supply effects. However, a reliance on cross-state variation necessitated reliance on less-than-ideal control samples. In contrast, this paper uses CPS data covering a 22-year period, which permit identification of the effects of SSI from within-state, time-series variation in SSI benefits, using a better control sample. The evidence points consistently to negative effects of more generous SSI payments on the labor supply of likely SSI participants aged 62-64. The implied elasticities of labor supply with respect to benefits, for those with a high probability of SSI participation, are generally in the range of 0.2 to 0.3, looking at both employment and hours of work.