
Stereotype of the Lazy Welfare Recipient: Evidence from Cash Programs Worldwide - mhb
http://www.vox.com/policy-and-politics/2015/11/20/9764324/welfare-cash-transfer-work
======
sevensor
Perhaps I'm not reading the right sources, but I never see anybody talk about
how much _work_ it is to get benefits, at least in the U.S. Once the county
welfare office is involved in your life, you have a demanding new boss, always
demanding paperwork -- forms, paystubs -- and phone calls to straighten things
out when the paperwork goes wrong. It's not like somebody shows up out of the
blue and gives you an envelope full of cash every month.

~~~
Mz
I talk about it once in a while -- when I have time. I am homeless and had
food stamps for a time. Then someone in the welfare office dropped the ball
and they got cancelled. I reapplied and someone else dropped the ball. I have
a compromised immune system. Not only did it take scads of time while getting
me nothing, it made me ill to spend half the day in a crowded welfare office
waiting room surrounded by poor people, who tend to not be in the best of
health.

After the second time they dropped the ball, I didn't bother to go back. My
income is gradually going up. I would get less help than I used to. I do
freelance work, so my income is erratic, which doesn't play nicely with their
forms. Etc.

I began looking for other solutions.

I am sometimes upset that I am not getting the food stamps. My situation is
still dicey and it is still a scramble every month to get enough resources to
eat every day. But I am not going to go spend all kinds of time trying to
chase the few dollars they would give me, getting sick over it, and worrying
about the possibility that they will feel I am committing fraud or something
because my income is erratic and some months I have enough and some months I
don't (or whatever the hell problem they might have with me).

So I do sometimes talk about it. But not a whole lot, for various reasons.

~~~
sevensor
Thank you for speaking up!

Public assistance in this country is given up so grudgingly, and often so
incompetently, as to be actively counterproductive.

~~~
fricken4
I'm in Canada and a friend of mine was working in a government call centre;
her job description could be summarized as 'deny people benefits in 9 minutes
or less'. Her role as enforcer of state brutality eventually led to clinical
depression and she quit. She couldn't handle turning down people who were more
often than not in dire straights.

~~~
sevensor
Thanks for filling in the other side of the picture. I'd never considered that
bad guidance wasn't the result of incompetence or malice on their part, but
that the phone workers might actually be incentivized, even required, to lie.

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rubyfan
I wonder if at a certain level of development, the bottom is so low that
welfare will make life slightly better _but_ sustainable work and pay will
sufficiently change the standard of living. Therefore welfare doesn't deter
work because incremental standard of living (attainable only by working) is
sufficiently divergent from the alternative of relying solely on welfare. I'd
also wonder if by contrast in developed countries the standard at the bottom
is sufficiently high _or_ the next level up is not sufficiently different
enough to encourage working to get there.

The Vox article mentions other studies in the US and Canada, particularly
negative tax and earned income tax credit. I'm not sure those actually act as
welfare or a one time economic stimulus. As a former recipient of earned
income tax credit, 1. I definitely didn't plan for that income 2. It didn't
change my work incentive (I was already working and low income) 3. I probably
spent that refund almost immediately either on paying down a credit card, a
car down payment, appliance, etc.

Earned income tax Had no effect on my desire to work or to increase my income;
the fact that I worked full time and had a low income was incentive enough.
The earned income tax was kind of like a bonus on an otherwise hard existence.

I suppose what is important here though is the question, _do the program 's
incentivize people to move out of poverty and remove the need for future
subsidization?_ If my hypothesis on upward mobility is correct then government
welfare programs don't really do much to move people out of poverty, they are
really economic stimulus and you know, keeping people from starving and
freezing to death. If we wanted to address the question of deterring work, I'd
suspect a lack of upward mobility is enough to deter work toward the bottom.

~~~
evanpw
This is the reason a lot of economists think it would be better to implement
the earned income tax credit as a wage subsidy rather than a tax credit.
Instead of a getting a big lump sum at tax time, you'd get a bigger paycheck:
kind of like a negative tax withholding.

~~~
rubyfan
That would make sense if it is intended to be welfare.

I could honestly say when I was getting a bigger tax refund than what I paid
in taxes, I really didn't know what it was or understand why I was getting it
and when it would go away. As a once a year thing that I didn't understand, it
had little influence on my thinking about work and I certainly didn't think
about it as welfare.

As a more frequent payout I'm certain I would have gave it more thought and it
would have an influence on thinking and behaviors. As a working person I'd
likely have considered it welfare and would have given it consideration as my
pride and ego would have to grapple with that.

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skwirl
Are there any studies that reach "negative" conclusions on the impact of
welfare systems? I thought surely there must be given how messy real world
data is and how widely varied opinion is on the topic. A quick search only
revealed more studies reaching similar conclusions to this one and the only
articles speaking out against these programs were newspaper opinion pieces.

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evanpw
The thing that discourages work is (mostly) not the cash grant itself, but the
high effective marginal tax rate you get from phasing it out as the recipient
earns more. The negative income tax and the earned income tax credit (which is
almost the same thing) should actually encourage work among those with low
incomes, because the more you earn, the larger the credit.

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talloaktrees
Here's the conclusion:

V. CONCLUSION In recent years, there has been a large growth in safety net
programs across the developing world. If anything, we might expect this trend
to increase as countries become richer: Chetty and Looney (2006) show that
social insurance as a fraction of GDP rises as countries get richer,
suggesting an that safety nets may be increasingly important as countries
grow. 18 As safety nets have increased, so has the debate about whether they
simply discourage work, enabling a “lazy poor.” Aggregating evidence from
randomized evaluations of seven cash transfer programs, we find no effects of
transfers on work behavior, either for men or women. Moreover, a 2014 review
of transfer programs worldwide by Evans and Popova also show no
evidence—despite claims in the policy debate—that the transfers induce
increases in spending on temptation goods, such alcohol and tobacco. Thus, on
net, the available evidence implies cash transfer programs do not induce the
“bad” behaviors that are often attributed to them in the policy space.

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alecdbrooks
I haven't personally studied the literature, but this study is in line with
what GiveWell has concluded, although they are more certain about cash
transfers not being spent on alcohol and tobacco [0] than on it not displacing
work [1]. This paper and GiveWell's research are based on some of the same
studies, so this study's not exactly surprising or new information, but
replication's always nice.

[0]:
[http://www.givewell.org/international/technical/programs/cas...](http://www.givewell.org/international/technical/programs/cash-
transfers#Alcoholandtobacco)

[1]:
[http://www.givewell.org/international/technical/programs/cas...](http://www.givewell.org/international/technical/programs/cash-
transfers#Whatarethepotentialdownsidesoftheintervention)

------
im_dario
Interesting study. It is kind of a reinforcement to the progressive
policymakers' point of view that cash programs work and even there will be
people who cheats the system, they will be whatever the system you choose.

I feel curious about what conclusions would obtain from a similar study in
European countries, which are well-known by their welfare programs.

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AnthonyMouse
We already know how to design a program that won't discourage work. It's
called a basic income. Everybody gets it regardless of whether they're
unemployed, making minimum wage or Donald Trump. You can't lose the benefit by
making more money so there is no even theoretical disincentive to work.

And of course the money comes from taxes which come predominantly from upper
income people, so even though the government is writing a check to Donald
Trump, it's not half as big as the one he's writing to Uncle Sam, whereas the
reverse is true for lower income people.

~~~
kethinov
I've never understood why this is not a more popular idea. I'm a Bernie-
supporting lefty liberal weenie and yet all my hardcore small government
libertarian friends agree with me on this one. They tend to characterize basic
income as, "I oppose wealth redistribution on principle, but since it's never
going away, we might as well have the least shitty version possible." How has
this not gotten done?

~~~
evanpw
Well, the libertarians wouldn't support it as an _addition_ to the current
welfare state, and the liberals wouldn't support it if it was conditional on
dismantling Social Security, Medicare, etc. If we were building something from
scratch, we might be able to get to a basic income, but right now, there's too
much disagreement about the proper _size_ of the welfare state to make any
sweeping changes to its structure.

~~~
Ankaios
A workable implementation will probably end up somewhere in between—many
programs might continue to exist, but the number of people they support would
decrease, as would the level of support.

If the basic income was set somewhere near the Federal Poverty Level (FPL) for
an individual, it would be ~ $1000 / month [1]. (This is just for a rough
sense of scale. I don't actually think it's a good idea to specifically aim to
match that number, but I suspect we shouldn't go much above it. That's a
longer discussion, though.) That wouldn't completely cover Social Security for
everyone—the average monthly retirement benefit is ~ $1300 [2]—but it would
cover a large chunk. Further, the minimum eligibility level for Medicaid is
133 % of the FPL [3], so if we'd like to maintain our current standards,
provision of a roughly FPL basic income won't obviate Medicaid for everyone.
(Medi _care_ 's qualification criteria are primarily age based, so the number
of eligible beneficiaries would be unchanged by the existence of the basic
income.)

[1] [http://aspe.hhs.gov/2015-poverty-
guidelines](http://aspe.hhs.gov/2015-poverty-guidelines)

[2]
[https://www.ssa.gov/policy/docs/quickfact/stat_snapshot/](https://www.ssa.gov/policy/docs/quickfact/stat_snapshot/)

[3] [http://www.medicaid.gov/medicaid-chip-program-
information/by...](http://www.medicaid.gov/medicaid-chip-program-
information/by-topics/eligibility/eligibility.html)

~~~
AnthonyMouse
So give people a one-time option when the program is introduced to choose
either social security or the basic income. And of course for anyone more than
a few years from retirement age, the basic income will be the obvious choice
because it begins paying immediately, so social security will de facto phase
itself out over time. But then you can trivially sell it as "no changes to
social security."

~~~
Ankaios
That would serve a somewhat different purpose than Social Security—a lower
income throughout life rather than a higher income in retirement.

Regardless, though, it seems like there should be relatively elegant options
for achieving both objectives with one system if we want to. Perhaps just
increase the basic income after some age. (That sets off some warning bells in
my head, though—it could be a step toward complexity and means testing.)

------
Aoyagi
I personally know two people who abuse the welfare system and a study whose
name starts with "Debunking the Stereotype" sounds like it's throwing any
objectivity out of the window right at the beginning - not to mention they
analyse data only from six third world countries. Inapplicable to richer
countries with generous welfare benefits.

~~~
vanderZwan
> _I personally know two people who abuse the welfare system_

So? You performed what Daniel Kahneman has called "question substitution":
replacing a difficult to answer question - _" do welfare plans encourage
exploitation"_ \- with a simpler one: _" are there people who exploit welfare
systems"_.

> _sounds like it 's throwing any objectivity out of the window right at the
> beginning_

Says the person who draws conclusions based on anecdotal evidence. My money is
on the study with data, not the random internet person who actively looks for
arguments supporting their existing beliefs.

~~~
Aoyagi
Funny word that "encourage", right? In modern English it can mean anything
from "allows something" to "literally tells you to do something".

My conclusion was that the welfare abuser stereotype absolutely does exist in
reality and there are people who do become lazy because of welfare benefits on
"1st world" countries.

Additionally, it was more of a huge scepticism than a "conclusion" and even
that was supported by two additional arguments, not just that anecdotal
evidence.

~~~
vanderZwan
> _Funny word that "encourage", right? In modern English it can mean anything
> from "allows something" to "literally tells you to do something"._

If only there was a context within which I was using these words that made it
blatantly obvious which of these uses applied here, like a link to a
paper/article discussing if welfare programs made people lazy.

Also, you don't quite grasp what "anecdotal evidence" means in a scientific
context.

~~~
Aoyagi
>Also, you don't quite grasp what "anecdotal evidence" means in a scientific
context.

Really? Please explain.

And what I meant was that the two questions are very, very close. Does alcohol
encourage alcoholism?

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dang
Url changed from [http://www.vox.com/policy-and-
politics/2015/11/20/9764324/we...](http://www.vox.com/policy-and-
politics/2015/11/20/9764324/welfare-cash-transfer-work), which points to this.

~~~
andybak
I feel that was a mistake. I would prefer a nicely formatted web summary. I
generally won't click on PDF links as they tend to be hard to read and usually
overly wordy.

I am also less likely to read an original paper over a web article unless I'm
particularly interested in the topic.

I understand the policy for linking to original rather than commentary but
there is sometimes value in a 'dumbed-down' summary.

~~~
jimrandomh
I'll take the other side: I think it's almost always better to link to studies
rather than to secondary sources reporting on them. I haven't looked closely
at the study or the Vox article yet, but my experience has been that there's a
major mismatch between study and the commentary more than half the time and
it's always the study that's closer to truth.

~~~
tomrod
Why not require a comment to have the study source, and pin that to the top of
the comment chain?

~~~
qntmfred
The vox link is at the top of the comments now, so potato, potato

~~~
javajosh
As an aside, does anybody actually say potato like "potato"?

~~~
goodcanadian
Well, they say to-mah-to in Australia. However, they also say po-tay-to. I
don't know of anywhere that it is pronounced po-tah-to, but I wouldn't rule it
out.

~~~
seekingcharlie
We also pronounce tune as "choon", which results in a lot of weird looks if
you're an Australian in the US.

------
jrcii
An anecdotal perspective to bring these conclusions a little closer to home-
spend some time in outer borough NYC bodegas, there is a constant stream of
people using food stamps to buy cigarettes, alcohol, and marijuana. 100% of
people that I've spoken with (dozens?) who live or have lived in these areas
have corroborated these observations.

As far as I'm concerned, even if these programs were free from abuse, they are
payments for votes and programs like SNAP should be abolished -- that's what
charities are for. The /only/ difference is that charities permit the liberty
of donors whom may manage the fruits of their own labor.

~~~
yequalsx
There are no instances of charity ever providing the basic needs of a nations
poor since the advent of the nation state. Charities are much more ibefficient
than government at curing starvation, lack of healthcare, etc. Nations that
contain large percentages of hungry, homeless, and sick are almost always
shitty. Making sure there aren't large numbers of extreme poverty cases makes
us all better off.

~~~
ashark
AFAI am concerned, libertarians are free to replace most of government with
charity and other voluntary associations as soon as they find a way around the
free rider problem and assorted other coordination problems that isn't 1)
government (we already have that!), or 2) obviously worse than government.

Good effing luck!

