Tuesday, May 2, 2017

The Safety Net Helps People To Work

"An emerging body of research reveals that some social welfare policies actually encourage more people to work and to do so more productively. In this emerging liberal version of supply side economics, government programs enable more people to work, and to work in higher-productivity, higher-income jobs. The clearest example of a program that appears to increase labor supply and hence the nation’s economic potential is the earned-income tax credit (EITC). One study shows that a major expansion of the program in 1993 was a principal driver of higher employment among single mothers.

By 1999, 460,000 more women who headed their household were working than would have been without the EITC expansion. That is more than the number of such women who were pulled into the workforce by welfare reforms or a booming economy during the 90’s. In other areas, SNAP for example, the relationship between public programs and higher incomes and employment rates is more indirect and takes longer to play out. Research shows that low-income children who benefited early as Food Stamps were phased in were healthier and more likely to be working decades later than otherwise similar children in areas where the program arrived later."

Source: New York Times, 4/15/17, Supply Side for Liberals

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