Working Papers:
Unemployment Insurance Expansions and Family Structure: Evidence from AFDC-UP in the 1970s and 1980s [JOB MARKET PAPER]
Abstract
This paper evaluates the short-run family structure-stabilizing effects of public assistance for poor two-parent families. 1961 amendments to the Social Security Act gave states the option to extend the Aid to Families with Dependent Children program to provide a segment covering the families of an unemployed parent (AFDC-UP), and access to benefits remained contingent on state of residence for the next three decades. AFDC-UP functioned similarly to the U.S. unemployment insurance (UI) system but also largely targeted the families of individuals who were UI-ineligible. Leveraging Current Population Survey Annual Social and Economic Supplement data as early as 1968 and through 1988, the difference in differences research design compares measures of program participation and family structure between recently unemployed men and those not experiencing unemployment, in AFDC-UP versus non-AFDC-UP states, and by tercile of previous earnings. I find that AFDC-UP provided a large degree of protection, preventing upwards of 50 percent of increases in divorce, separation, or spousal absence and declines in cohabitation that would have otherwise occurred. These effects are concentrated primarily among poor families of long-term unemployed men. The findings in this paper indirectly suggest that the welfare gains of extending UI benefits to ineligible workers and their families would be large, highlight the historical importance of complementary safety net programs in protecting against unemployment, and contribute to our understanding of the increasing association between unemployment and two-parent family dissolution since the 1960s.
Public Pensions and Retirement: Evidence from the Railroad Retirement Act (Revisions Requested at Journal of Public Economics)
Abstract
This paper estimates how public pensions affect retirement timing by examining the Railroad Retirement Act of 1937, which replaced private railroad pensions with a national program similar to Social Security. Leveraging linked decennial census records between 1910-1940, the analysis compares male labor force nonparticipation in 1940 relative to 1930, between workers previously in railroad versus other industries, and by age. Higher benefits led to earlier retirement, largely driven by exit at age 65. Exploiting the switch from flat to progressive benefits, I estimate the elasticity of nonparticipation for ages 65-69 to be around 0.55, indicating a large retirement response.
The Expansion of Social Security and the Decline of Elderly Public Assistance (Joint with Daniel Fetter)
Abstract
The growth of social insurance and transfer programs was among the most consequential changes in the 20th century United States, and a central element of this growth was the change in the level of government that administered and funded transfers. We investigate the expansion of the nationally-administered Old Age and Survivors Insurance (OASI) program -- commonly known as Social Security -- and its role in the decline of the state-administered, means-tested Old Age Assistance (OAA) program from 1940 through 1955. In the absence of changes in state OAA policies, means-tested OAA programs would shrink as Social Security increased the resources of the elderly, meaning that the net cost of Social Security transfers and the increase in the resources of the elderly would both be smaller than the dollar value of Social Security transfers would suggest. The analysis exploits variation across states in the size of Social Security expansions due to exclusions of certain industries from coverage in the early program. Overall, OAA programs shrank in response to the growth of Social Security, but states also responded to these "savings" by liberalizing eligibility and payment policies. However, there was stark regional variation in states' responses. Most notably, most of the decline in OAA attributable to the expansion of Social Security was driven by Southern states.
Work in Progress:
Who Benefits from Federal Welfare Spending? Evidence from the Introduction of Progressive Cost Sharing (Joint with Andrew Goodman-Bacon)
Abstract
This paper examines whether the federal government can induce states to offer higher benefits through greater generosity in matching funds. We examine the initial switch to progressive federal matching of state public assistance expenditure in 1958 for the four federalized programs Old Age Assistance OAA, Aid to Families with Dependent Children (AFDC), Aid to the Blind (AB), and Aid to the Permanently and Totally disabled (APTD). The formula based funding on how state per capita income related to national per capita income, setting the precursor for Medicaid financing. Our empirical strategy compares higher and lower income states before and after 1958. States could respond by increasing welfare spending, which would constitute evidence of flypaper effects. They could also decrease taxes or increasing other spending. Preliminary evidence suggests progressive cost sharing was not effective in achieving more equitable benefits, but may have increased medical vendor payments, the 1950s public insurance component of welfare.
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