Welfare Payments and Work Incentive: Some Determinants of the Rates of General Assistance Payments

Hirschel Kasper

Journal of Human Resources, 1968, vol. 3, issue 1, 86-110

Abstract: Recently the subject of the relation between the level of welfare payments and the number of people receiving welfare has attracted renewed interest. This paper presents an analysis of the determinants of the proportion of people receiving one form of public assistance, General Assistance Payments. We develop a model which is somewhat more complete than those of earlier studies by including more appropriate measures of the economic forces which affect the likelihood of people receiving GAP. Our results suggest that labor market conditions, particularly the unemployment rate during the recent past, is the most consistent explanation of variations in the rate of assistance. The level of the payments themselves seem to play a distinctly secondary role. These conclusions hold for both the numbers of families and individuals on General Assistance. In addition, we show that the recent controversy regarding the effect of the level of GAP on the demand for assistance is likely to be a matter of model specification rather than matters of definition or theory.

Date: 1968
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Persistent link: https://EconPapers.repec.org/RePEc:uwp:jhriss:v:3:y:1968:i:1:p:86-110

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