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.
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I'm an economic policy analyst with a focus on social welfare programs and their impact on low-income households. My expertise is grounded in extensive research and analysis of federal anti-poverty initiatives, particularly in the realm of Medicaid and related assistance programs. My understanding goes beyond theoretical knowledge, incorporating a deep comprehension of the practical implications of policy variations across different states.
In the context of the article you provided, Chicago Fed economist Jacob Berman's work on state discretion in administering federal anti-poverty programs highlights the significant disparities in eligibility and benefit levels among states. Berman's study delves into the intricacies of safety net programs, accounting for living costs, and reveals key findings regarding the generosity of assistance in different states.
Berman assesses various programs in his study, including 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), Workers' Compensation, and Temporary Disability Insurance. These programs collectively shape the landscape of social welfare and have a tangible impact on the well-being of low-income individuals and families.
The study's central conclusion is that Vermont stands out as the most generous state, with low-income individuals receiving an average of about $26,000 in benefits. This is attributed primarily to Vermont's comprehensive Medicaid program, which constitutes a significant portion of the overall assistance. Additionally, Vermont has its own refundable earned income credit and SSI program. On the flip side, Georgia ranks at the bottom due to its restrictive laws regarding Medicaid and TANF.
Berman's acknowledgment that government spending is just one aspect influencing the living standards of low-income Americans adds a nuanced layer to the analysis. He points out that regulations, such as restrictive zoning laws, play a crucial role in shaping the prices households pay for goods and services, impacting overall living costs. The paper linked in the article explores the affordable housing crisis in the United States, attributing high housing prices to zoning and land use controls, particularly in areas like California and some eastern cities.
In summary, the article sheds light on the intricate dynamics of state-administered anti-poverty programs and their implications on living standards for low-income individuals. Berman's research provides valuable insights into the varying degrees of generosity in safety nets across states, emphasizing the need to consider regulatory factors beyond government spending in understanding the challenges faced by low-income Americans.
