States have a lot of discretion over administering federal anti-poverty programs. Take Medicaid, for instance. As Chicago Fed economist Jacob Bermanpoints out,the eligibility cut-off for a single-parent household with three kids rangesfrom an annual income of $50,868 in Washington DC to $2,652 in Alabama. In a new study, Bermananalyzes which state have the most and least generous safety nets — supposedly accounting for living costs — including the following programs:
— Medicaid Children’s Health Insurance Program (CHIP);
— Earned income credits;
— Unemployment insurance Supplemental Security Income (SSI);
— Temporary Assistance for Needy Families (TANF);
— Supplemental Nutrition Assistance Program (SNAP);
— Special Supplemental Nutrition Program for Women, Infants, and Children (WIC);
— Worker’s compensation;
— Temporary disability insurance.
Berman’s key finding:
Vermont ranks as the most generous state with the average low-income person receiving about $26,000 in benefits. This is due largely to the fact that, using my measure, Vermont has the most generous Medicaid program and Medicaid accounts for about half of all of the programs I consider. Vermont also has its own refundable earned income credit and SSI program. Conversely, Georgia is at the bottom of the ranking since it has some of the most restrictive laws for Medicaid and TANF.
Now here is the part I find really interesting. As Berman concedes, government spending isn’t the only thing that affect living standards for low-income Americans: “Outside of the budget process, regulations influence the prices households pay for goods and services. For example, restrictive zoning laws tend toincreasehousing costs. Transfer payments are only part of the story.”
Here is the summary of the well-known paper that Berman links to:
Does America face an affordable housing crisis and, if so, why? This paper argues that in much of America the price of housing is quite close to the marginal, physical costs of new construction. The price of housing is significantly higher than construction costs only in a limited number of areas, such as California and some eastern cities. In those areas, we argue that high prices have little to do with conventional models with a free market for land. Instead, our evidence suggests that zoning and other land use controls, play the dominant role in making housing expensive.
Along these lines, a very nice blog post from my pal Ryan Avent on housing markets.
Follow James Pethokoukis on Twitter at@JimPethokoukis, and AEIdeas at@AEIdeas.
FAQs
Other states with high per capita public welfare spending in 2021 included New Mexico ($3,953), Massachusetts ($3,885), and California ($3,870). After Connecticut, the lowest per capita spending was in Georgia ($1,352), Florida ($1,524), Nevada ($1,541), and Wyoming ($1,577).
Who receives the most welfare in the US? ›
Non-Hispanic White people accounted for 44.6% of adult SNAP recipients and 31.5% of child recipients in 2020. About 27% of both adult and child recipients were Black. Hispanic people, who can be of any race, accounted for 21.9% of adult recipients and 35.8% of child recipients.
Who has the best welfare system? ›
France remains the country most committed to social benefits, with almost a third of French GDP spent on social services by the government in 2019. Scandinavian countries appear high up on the ranking, with Denmark, Sweden and Norway all spending more than 25%. The OECD average was 20%.
What are the 3 welfare states? ›
Specifically, in his typology, Esping-Andersen identifies three types of welfare state regimes by which advanced capitalist democracies can be categorized: liberal, conserva- tive, and social democratic.
What states get more than they give? ›
Virginia, Kentucky, New Mexico and West Virginia get the most back from the federal government, raking in far more than they contribute. Virginia almost doubles its money, paying about $10,000 in tax revenues per resident, while receiving more than $20,000 in federal money per person.
What is the hidden welfare state in the US? ›
The hidden welfare state refers to tax expenditures (deductions) with social welfare objectives: tax deductions for retirement saving, charitable contributions, higher education, and the home mortgage interest deduction. All of these deductions benefit constituencies with considerable disposable income.
What state pays the most in food stamps? ›
The state where SNAP benefits are the highest is Alaska, due to the high cost of living in the northern state. In Alaska, a family of four's maximum SNAP benefits is 1,819, dollars.
What race uses food stamps the most? ›
SNAP recipients represent different races and/or ethnicities. White: about 37 percent; African American: 26 percent; Hispanic: 16 percent; Asian: 3 percent; and Native American: about 2 percent. (About 16 percent of participants are categorized as “race unknown.”) Many SNAP households have earned income.
What race has the highest welfare rate? ›
Using research from the Urban Institute (gathering data from 59 million people), the graph below presents the largest percentage of welfare recipients in 2019. The majority of recipients were white (43 percent), followed by Hispanic (26 percent), and Black (23 percent).
What percent of US citizens are on welfare? ›
What percentage of the U.S. population receives welfare benefits? Approximately 21% of the U.S. population receives some form of welfare benefits, including programs such as Medicaid, Supplemental Nutrition Assistance Program (SNAP), and housing assistance.
Despite the cutbacks, France has the most generous social welfare spending, which amounts for 31.5% of its GDP. As is generally the case in Europe and other OECD member nations, the bulk of this spending goes to old-age support programs and health.
Why is the US not a welfare state? ›
Across countries, racial fragmentation is a powerful predictor of redistribution. Within the United States, race is the single most important predictor of support for welfare. America's troubled race relations are clearly a major reason for the absence of an American welfare state.
Has been the most successful welfare program in the United States? ›
Studies also suggest that the EITC has been more successful than other welfare programs in reducing poverty. The Census Bureau claims that the poverty rate would be 2.5 percent higher in the absence of refundable tax credits.
What country is a good example of a welfare state? ›
Singapore. In Singapore, the government provides financial and social support through a variety of social assistance schemes for lower and middle-income Singaporeans.
What race is on food stamps the most? ›
SNAP recipients represent different races and/or ethnicities. White: about 37 percent; African American: 26 percent; Hispanic: 16 percent; Asian: 3 percent; and Native American: about 2 percent.
