Geographic Inequality in Social Provision and Redistribution Sarah K. Bruch - University of Iowa INEQUALITY ACROSS THE US STATES Inequality Workshop The

Geographic Inequality in Social Provision and Redistribution

Sarah K. Bruch - University of Iowa

INEQUALITY ACROSS THE US STATES

Inequality WorkshopThe Graduate Center, CUNY June 5, 2015

Motivation

Leveraging variation but also normative concerns.

Subnational variation in social provision and redistribution is a form of inequality.

State inequalities in social provision results in unacceptably different social contracts for economically vulnerable families.

Why do we have subnational variation in provision and redistribution?

Part of the answer is about policy design – the degree of decentralization.

Unequal by Design: Social Provision in the US Welfare State

Sta

ndard

ized

Bro

ad

Cove

rage

Discretion

a

ryTargeted

Key Dimensions of Safety Net Policies

Adequacy of benefits = what recipients receive on average.

Direct expenditures for recipient benefitsProgram caseload or recipients

Adjusted for inflation (in constant $2012)

Adjusted for cost-of-living differences across states.

Value add of measure: vs. max benefit or aggregate spending

Key Dimensions of Safety Net Policies

Inclusiveness of receipt = proportion of potentially needy that get assistance.

Program caseload or recipients Potentially needy population

Potentially needy population estimated with the Annual Social and Economic Supplement (March CPS).

Adjusted for cost of living differences across states.

Value add of measure: vs. caseloads

Defining the State-Level Safety Nets

Include programs in which states have some policymaking authority, or financial or administrative responsibility.

Program Funding• Partial/joint funding of programs & block grant structure • Implication = Variation in availability and stability of

funding

Program Administration• Flexibility in administering programs • Implication = Variation in outreach, application, and

accessibility.

Policymaking Authority• Authority to make rules regarding eligibility and benefits • Implication = Variation in eligibility criteria and benefit

levels.

State-Level Safety Net11 programs that provide support for economically vulnerable families with children.

CA: cash assistance (AFDC/TANF)FS: food assistance (Food Stamps/SNAP)HI: health insurance (Medicaid and SCHIP)CS: child support (enforcement and collections)CC: child care (subsidies – CCBG/CCDF and TANF)ECE: early childhood education (Head Start and public pre-k)UI: unemployment insuranceWA: work support (JOBS w/ AFDC and TANF work support)SS: disability assistance (SSI for disabled children)HS: housing assistance (Section 8)ST: state income taxes (liability threshold and credits)

SNAPSHOT OF CURRENTSOCIAL PROVISION

Adequacy of Safety Net Benefits (2013)

$3,962$3,525

$2,934

$5,018

$7,529

$0

$7,224

$2,301

$13,660

$5,981 $6,153

02

,000

4,0

006

,000

8,0

001

0,00

0Y

ear

ly B

ene

fit in

Dol

lars

CA FS CS UI SS ST EC HI WA CC HS

Average Yearly Benefit in Median State - 2013

2013 Poverty thresholds:2p/1k = $16,0573p/2k = $18,7694p/2k = $23,624

Inclusiveness of Safety Net Benefits (2013)

.244

.141

.162

1.19

.206

.453

.7

.428

.819

1.21

.194

0 .5 1 1.5

HS

CC

WA

HI

EC

ST

SS

UI

CS

FS

CA

Proportion Potentially Needy Receiving Benefits in Median State - 2013

INEQUALITY ACROSS STATESSOCIAL PROVISION

Inequality in the Adequacy of Safety Net Benefits

02

,000

4,0

00

6,0

00

8,0

00

10,0

00

Ye

arl

y B

ene

fit in

Dolla

rs

CA FS CS UI SS ST EC HI CC HS

Adequacy of Social Provision - Extent of State Variation - 2013

Note: Colored box indicates IQR (25th & 75th percentiles), w/ median highlighted; the length of the whiskers are at 1.5 times the IQR; values outside of that range are represented by dots.


02

,000

4,0

00

6,0

00

8,0

00

10,0

00

Ye

arl

y B

ene

fit in

Dolla

rs




Cash Assistance25th = $3,16275th = $5,020


02

,000

4,0

00

6,0

00

8,0

00

10,0

00

Ye

arl

y B

ene

fit in

Dolla

rs




Food Assistance25th = $3,07175th = $3,728


02

,000

4,0

00

6,0

00

8,0

00

10,0

00

Ye

arl

y B

ene

fit in

Dolla

rs




Unempl. Ins.25th = $4,13175th = $5,758


02

,000

4,0

00

6,0

00

8,0

00

10,0

00

Ye

arl

y B

ene

fit in

Dolla

rs




State Prek/HS25th = $6,12475th = $8,143


02

,000

4,0

00

6,0

00

8,0

00

10,0

00

Ye

arl

y B

ene

fit in

Dolla

rs




Child Care25th = $4,62075th = $6,752

Inequality in the Inclusiveness of Safety Net Benefits

0.5

11

.5P

ropo

rtio

n o

f P

ote

ntia

lly N

eed

y P

opu

latio

n R

ece

ivin

g


Inclusiveness of Social Provision - Extent of State Variation - 2013



0.5

11

.5P

ropo

rtio

n o

f P

ote

ntia

lly N

eed

y P

opu

latio

n R

ece

ivin

g




Cash Assistance25th = 0.1075th = 0.25


0.5

11

.5P

ropo

rtio

n o

f P

ote

ntia

lly N

eed

y P

opu

latio

n R

ece

ivin

g




Unempl. Ins.25th = 0.3675th = 0.49

Variation in the Inclusiveness of Safety Net Benefits

0.5

11

.5P

ropo

rtio

n o

f P

ote

ntia

lly N

eed

y P

opu

latio

n R

ece

ivin

g




Child Care25th = 0.1175th = 0.21

STATE CHANGE OVER TIMESOCIAL PROVISION

State Change Over Time in Safety Net Benefits

MSALTXLATNSCARKYNCVAFL

WVGAIN

MDNVDEID

MOAZIL

WYCOOKNJSDOHNENMUTMTKSPAIA

ORNDMENYNHMICT

WAWIMNCAMARIVTHI

AK

Sta

tes

Ord

ere

d b

y 19

94

Be

ne

fit L

eve

l

2000 4000 6000 8000 10000Benefit Change 1994 to 2013

Absolute Value Change in Cash Assistance Adequacy 1994 to 2013


CTVTMANHNYMNCAVANJMEMDORPARI

WANVNEWIMI

COIDIA

NCKSUTDEIL

MTTNNDFLOHAROK

WYGAAZ

MOIN

SCWVMSALNMTXSDKYLAHI

AK

Sta

tes

Ord

ere

d b

y 19

94

Be

ne

fit L

eve

l

2500 3000 3500 4000 4500Benefit Change 1994 to 2013

Absolute Value Change in Food Assistance Adequacy 1994 to 2013



WANVNEWIMI

COIDIA

NCKSUTDEIL

MTTNNDFLOHAROKWYGAAZMO

INSCWVMSALNMTXSDKYLAAKHI

Sta

tes

Ord

ere

d b

y 19

94

Ben

efit Le

vel

2000 2500 3000 3500 4000 4500Benefit Change 1994 to 2004

Change in Food Assistance Adequacy 1994 to 2004


WANVNEWIMI

COIDIA

NCKSUTDEIL

MTTNNDFLOHAROKWYGAAZMO

INSCWVMSALNMTXSDKYLAAKHI

Sta

tes

Ord

ere

d b

y 19

94

Ben

efit Le

vel

2000 2500 3000 3500 4000 4500Benefit Change 2004 to 2013

Change in Food Assistance Adequacy 2004 to 2013


IDALARSDTXSCOKMSLANMWYORINAZKSUTMTNDKYNHNVFLVA

WVNECONY

WATNMANCHINJVT

MDPAMNCACTIL

MOIA

WIGAMI

DEOHMERI

AK

Sta

tes

Ord

ere

d b

y 19

94

Cove

rag

e

0 .2 .4 .6 .8Coverage Change 1994 to 2013

Absolute Value Change in Cash Assistance Inclusion 1994 to 2013


IDSDNHNY

WYCTMTKS

WASCMACAKYNMAKFLORIN

WIIL

NJNCOKARAZHI

NVUTMNNDMSPAMIALLAIA

MDOHRI

DEWVTNTXVACOVTNEMOMEGA

Sta

tes

Ord

ere

d b

y 19

94

Cove

rag

e

.6 .8 1 1.2 1.4 1.6Coverage Change 1994 to 2013

Absolute Value Change in Food Assistance Inclusion 1994 to 2013


IDSDNHNY

WYCTMTKS

WASCMACAKYNMAKFL

ORIN

WIIL

NJNCOKARAZHI


MDOHRI


Sta

tes

Ord

ere

d b

y 19

94

Covera

ge


Change in Food Assistance Inclusion 1994 to 2004

IDSDNHNY

WYCTMTKS

WASCMACAKYNMAKFL

ORIN

WIIL

NJNCOKARAZHI


MDOHRI


Sta

tes

Ord

ere

d b

y 19

94

Covera

ge


Change in Food Assistance Inclusion 2004 to 2013

CURRENT SNAPSHOTREDISTRIBUTION

Data

Annual Social and Economic Supplement (March CPS)

Household level income measures: adjusted for household size (square root of hh size) inflation (CPI-U-RS), and cost of living differences across states (BEA all items RPP).

Dollar figures reported are per equivalized person in the household in 2012 dollars.

Household type: working-aged households (head age 18-64) with children

0 .1 .2 .3 .4 .5Gini Coefficient

NMCANYIL

MSLAALGAMOTXFLAZ

WAARRINJCTMAKYMENCOKNV

WVMIMTTNIN

PAOROHHIID

VADESCWIMDCOAKKSVTMNNENHSDUTNDIA

WY

Market Inequality and Disposable Inequality for HHs w/ Kids 2012

NDNH

WYIA

NEMNSD

VA

UT

MD

CT

COWI

VT

PAAKMOMA

MEOH

ILNJ

KS

WA

OKMIINHIORID

RIALFL

TNWV

GA

NC

SC

NVTX

MTDE

LA

ARMS

AZ

KY

CANY

NM

.2.3

.4D

isp

osa

ble

Ineq

ualit

y

.3 .35 .4 .45 .5 .55Market Inequality

Market and Disposable Inequality for HHs w/ Kids 2012

No inequality

reduction

0.05 inequality

reduction

0.10 inequality

reduction

0.15 inequality

reduction

WYIA

NDUTSDNHNEMNVTKSAKCOMDWISCDEVAIDHI

OHORPAINTNMTMI

WVNVOKNCMEKYMACTNJRI

ARWAAZFLTX

MOGAALLAMS

ILNYCANM

Sta

tes

Ord

ered

by

Mar

ket I

neq

ualit

y

.3 .35 .4 .45 .5 .55Inequality Reduction

Inequality Reduction among Working-Aged HHs w/ Kids 2012

overall reductionCentralized transfers

Decentralized transfers

State taxes

Federal taxes

0 .1 .2 .3 .4Relative Poverty

NMNYCAKYAZMSARLADEMTTXNVSCNCGA

WVTNFLALRIID

ORHIINMI

OKWAKSNJIL

OHMEMAMOAKPAVTWICOCTMDUTVASDMNNEIA

WYNHND

Market Relative Poverty and Disposable Relative Poverty for HHs w/ Kids 2012

NDNH

WYIANEMNSD

VAUT

MDCTCOWIVT

PAAKMOMAMEOH

ILNJ

KS

WAOKMIINHI

ORID

RIALFLTN

WVGANCSCNVTX

MT

DELAARMS

AZ

KY

CA NYNM

-.1

0.1

.2.3

.4D

isp

osa

ble

Re

lativ

e P

ove

rty

.1 .2 .3 .4Market Relative Poverty

Market and Disposable Relative Poverty for HHs w/ Kids 2012

No poverty

reduction

0.05 poverty

reduction0.10 poverty

reduction

0.15 poverty

reduction

NDNH

WYIA

NEMNSDVAUT

MDCTCOWIVTPAAKMOMAMEOHIL

NJKS

WAOKMIINHI

ORIDRIALFLTN

WVGANCSCNVTXMTDELAARMSAZKYCANYNM

Sta

tes

Ord

ere

d b

y M

arke

t Po

vert

y

.1 .15 .2 .25 .3 .35Relative Poverty Reduction

Relative Poverty Reduction among Working-Aged HHs w/ Kids 2012

overall reduction Centralized transfers

Decentralized transfers

State taxes

Federal taxes

NHNDUT

WYMDIA

MNCTVAVTNECOSDNJHI

AKWAMAPAIL

WIMEORKSID

OKFLNVDERIIN

OHMOCAMINYTXMTNCGAAZSC

WVALTNARLAKYMSNM

Sta

tes

Ord

ere

d b

y M

arke

t Po

vert

y

.05 .1 .15 .2 .25 .3Absolute Poverty Reduction

Absolute Poverty Reduction among Working-Aged HHs w/ Kids 2012

ConclusionsSocial provision in the US is inadequate in terms of benefit levels and the inclusiveness, and that this varies substantially across states.

States start out and end up in different places in terms of levels of poverty and inequality – and these in part reflect policy choices. The decentralized structure of the safety net is one of most crucial and least carefully studied structural features of the U.S. welfare state.

Social provision that is inadequate and unequal hampers our ability to address high and rising levels of inequality, insecurity, and poverty.

Documents

Geographic Inequality in Social Provision and Redistribution Sarah K. Bruch - University of Iowa INEQUALITY ACROSS THE US STATES Inequality Workshop The