The following are designed to help you not only be able to compare different programs and different types of welfare assistance, but to provide a simple framework you can apply to your term projects (I’d expect you’d go into some detail on those; less so on an exam).
Some key questions to ask about welfare programs
- What is the explicit function? ‘Explicit’ function because one could argue that some welfare programs serve other, less widely recognized functions. For instance, we’ve discussed the EITC (earned income tax credit), which is a program designed to encourage work and reward the working poor. There is evidence that it does so and is effective. However, a more cynical view is that it kills incentives to raise wages, since taxpayers will pick up the difference. This logic goes back to the Speenhamland Laws in England in the 19th century. For our purposes, we’ll focus on what programs are supposed to do, and you should think about how well they do them.
- Who benefits? What are the eligibility criteria? Is the program means-tested? Is it an insurance program people pay into? What is the difference between the two? Which generally enjoy more public support, and why? Is the program an entitlement (those who qualify are entitled to receive benefits), or is the pot of money limited?
- What form do benefits assume? There are cash assistance programs, such as TANF, but TANF also offers many in-kind benefits to some recipients (transportation vouchers, child care assistance, money to purchase clothes). Food stamps is in-kind–you don’t get the money, but you can use credit on the Oregon Trail card to purchase food. What levels of benefit? What are the eligibility issues criteria?
- How is it financed? This addresses not only whether it’s an entitlement (and entitlements are potentially more expensive, since everyone who qualifies is entitled–what happens if the economy tanks, for instance?),or a block grant (fixed sums of money from the federal to the state government, generally). What kinds of tax revenue are used to finance (e.g., state/federal income tax, property tax)? Is it public/private/non-profit)? Is it supported by grants, or local fundraising? Why is this important?