Overview of the Final Report of the Seattle-Denver Income Maintenance Experiment. The Policy Context

05/01/1983

In the mid 1960s, a consensus emerged among policy analysts and that there were potential problems with the existing set of transfer programs available to those in need.  Programs were believed to be fragmented and characterized by variations in benefit levels and administrative access among different types of families.  In particular, the working poor in two-parent families were largely excluded.  In 1966, the Aid to Families with Dependent Children-Underemployed Fathers (AFDC-UF) program covered less than 100,000 families, although one-third of all the poor were in two-parent families where the husband worked full-time all year round.  The existing set of transfer programs was also asserted to be anti-family.  For example, one possible way a poor father could help his family would be to leave his wife and children — thus enabling them to apply for AFDC.

A variety of policy reform proposals were being developed during this period, such as the Heineman Commission's 1969 proposal for a federal negative income tax with universal eligibility.  Since a major objective of such proposals was to extend coverage to the working poor, it was considered important to determine if the benefits of increased coverage would be offset by reductions in work.  The major reason for the income maintenance experiments was to measure how strong the work disincentive for such a program might be.

Other policy concerns of the period also shaped the design of SIME/DIME.  First, the 1960s and early 1970s saw a rapid increase in rates of divorce and separation, and hence, the proportion of female-headed families.  This development focused attention on whether a negative income tax with universal eligibility would increase marital stability.  Second, "Great Society" programs were not conceived primarily as income supported, but rather as a way to increase the ability of the poor to be economically self-sufficient.  This led to the question of whether a job counseling and education or training subsidy program administered simultaneously with a negative income tax could offset the reduction in work that might result from the negative income tax alone.

Four income maintenance experiments were undertaken, starting with the New Jersey Experiment in 1967, including the Rural (1968) and Gary (1971) Experiments, and ending with SIME/DIME, the subject of this overview.  SIME/DIME was the largest of the four experiments — indeed larger than the other three combined — and lasted for the longest period of time.  For this reason, its results can be viewed with the most confidence.

The next section of the overview discusses the potential of social experimentation as a policy research tool.  The third section describes the design and administration of SIME/DIME, and the rest of the overview presents the major research findings that resulted from the analysis of SIME/DIME data.