The Constrained Demand for Public Assistance

Peter S. Albin and Bruno Stein

Journal of Human Resources, 1968, vol. 3, issue 3, 300-311

Abstract: Public assistance is treated here as a transaction with a demand and a supply side. The theory of demand is explored under a hypothetical condition of free choice to individuals between wage income and relief income. Then, more realistic situations are examined in which able-bodied individuals are required to seek work if work is available at some social minimum wage rate. The work requirement is treated as one of several existing contraints upon choice. To this are added the various disutilities that, in effect, lower the value of relief income to the recipient and further alter his choice. The analysis suggests that welfare authorities (the supply side) can and do vary the constraints and disutilities so as to change the magnitude of the demand for public assistance. Administrative behavior, then, becomes a variable in the determination of the number of recipients, serving as a force that equilibrates demand with supply.

Date: 1968
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