Browse All

Theses & Dissertations

Submissions

The Decline of Welfare Benefits in the U.S.: The Role of Wage Inequality

UNCG Author/Contributor (non-UNCG co-authors, if there are any, appear on document)
David C. Ribar, Professor (Creator)
Institution
The University of North Carolina at Greensboro (UNCG )
Web Site: http://library.uncg.edu/

Abstract: Welfare benefits in the U.S. have experienced a much-studied secular decline since the mid-1970s. We explore a new hypothesis for this decline related to the increase in wage inequality in the labor market and the decline of real wages at the bottom of the distribution: we posit that voters prefer benefits which are tied to low-skilled wages. We test the hypothesis using a 1969–1992 panel of state-level data. An additional contribution of our analysis is the use of General Social Survey data on voter preferences for welfare which we combine with Current Population Survey data to determine the voter in each state who has the median preferred welfare benefit level. Our analysis reveals considerable evidence in support of a role for declining real wages in the decline of welfare benefits.

Additional Information

Publication
Journal of Public Economics, 68:3 (June 1998), 421-52
Language: English
Date: 1998
Keywords
Welfare benefits, USA, Wage inequality