The Structure of the American Welfare System
The structure of the American welfare system is very complicated, and its effects are both controversial and disputed. This chapter will describe the overall structure of the entire income-maintenance system by determining the expected welfare guarantee levels over the 1980s. A number of empirical investigations have been made employing those newly estimated descriptive welfare statistics to determine the extent of the effect welfare has on a range of behavior. The results of these investigations are presented in the next chapter. Finally, in the third chapter of this part, one particular version of the negative income tax system will be proposed as a possible solution to many of the problems posed by the present system of income-maintenance, as well as some other social problems.
Previous investigations of welfare have usually been based on either the negative income tax (NIT) experiments or the Aid to Families with Dependent Children (AFDC) program. The NIT studies are based on experimental data, which pose a number of problems. 599 AFDC accounts for only roughly half of welfare. The strength of this study lies in the utilization of a very large and relatively current data set from the Current Population Survey (CPS), a nationally representative, randomly selected, non-experimental data set. In addition, virtually the entire income maintenance system is captured by the descriptive welfare statistics developed herein. The levels of support ascertained by this study are surprisingly low, yet are proportionate to previous investigations restricted to AFDC. The effects of welfare are also surprisingly low. The labor supply effects range from small to none. The family size impacts are significant, but the effect on migration is trivial. An investigation into the allocation patterns of welfare has also been performed. Race- and sex-based allocation anoma-