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Federalizing Benefits: The Introduction of Supplemental Security Income and the Size of the Safety Net

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Abstract

In 1974, Supplemental Security Income (SSI) federalized cash welfare programs for the aged, blind, and disabled, imposing a national minimum benefit. Because of pre-existing variation in generosity, SSI differentially raised payment levels in states below its benefit floor, but had no effect in states that paid above it. We show that SSI increased disability participation in states with the lowest pre-SSI benefits, but shrank non-disability cash transfer programs. For every four new SSI recipients, three came from other welfare programs. Each dollar of per capita SSI income increased total per capita transfer income by just over 50 cents.

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  • Andrew Goodman-Bacon & Lucie Schmidt, 2019. "Federalizing Benefits: The Introduction of Supplemental Security Income and the Size of the Safety Net," Department of Economics Working Papers 2019-21, Department of Economics, Williams College.
    • Handle: RePEc:wil:wileco:2019-21
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    File URL: https://web.williams.edu/Economics/wp/w25962.pdf
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    JEL classification:

    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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