Do Transfer Payments Keep the Poor in Poverty?
8 Pages Posted: 4 Oct 2013
Date Written: May 1, 1987
Do transfer payments keep the poor in poverty? There are at least two ways to restate the question, two ways that imply quite different, although related, lines of inquiry. A first restatement is: Do transfer payments raise the poor out of poverty? In short, are transfer payments efficacious in achieving the antipoverty function many of them obstensibly were introduced to perform, particularly those that are means-tested income redistribution programs? A second and more provocative restatement is: Do transfer payments cause the nonpoor to enter poverty, or, only a bit more mildly, do transfer payments induce the poor to stay in poverty? In short, does the existence of a social welfare system of the type extant in the United States have the perverse effect of increasing the incidence of poverty or perpetuating the poverty status of those who already are poor? In this paper we examine both lines of inquiry. We suspect that the net consequence of our investigation will be to raise troubling questions about the structure of American society and the fundamental causes of overty.
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