Content by Keyword: Poverty, Income, and Assets

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Chapter IV: A Closer Look at Poor States

Spending on Social Welfare Programs in Rich and Poor States. Final Report.. Chapter IV: A Closer Look at Poor States

The econometric models support the claim that state fiscal capacity exerts positive effects on total spending for social programs as well as spending for major components of social welfare budgets, such as cash assistance, medical assistance, and other public welfare programs. However, the models raise two sets of new questions:
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Endnotes

Spending on Social Welfare Programs in Rich and Poor States. Final Report.. Endnotes

16 Unemployment rates per capita are lower than unemployment rates usually reported. The former rate is the number of unemployed divided by the total population in the state, while the latter is the number of unemployed divided by the number of persons seeking jobs. 17 Social welfare spending in this analysis includes no spending on public h
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5. Conclusions from Econometric Analysis

Spending on Social Welfare Programs in Rich and Poor States. Final Report.. 5. Conclusions from Econometric Analysis

i) Effects of Fiscal Capacity
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4. State Effects: Long-Run Differences in State

Spending on Social Welfare Programs in Rich and Poor States. Final Report.. 4. State Effects: Long-Run Differences in State Spending on Social Welfare

One result of the 50-state model was the estimation of unexplained variance in spending across different states. These state effects were estimated intercepts or constant terms for each of the states in the econometric models. They may be interpreted as general dispositions of states-averaged across the entire period, 1977-2000-to support certain
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3. Cyclical Models

Spending on Social Welfare Programs in Rich and Poor States. Final Report.. 3. Cyclical Models

To confirm that the effects estimated for the unemployment per capita variable were truly state labor market effects and to get a better sense of how spending changed in response to unemployment changes alone, we estimated simple linear relationships between spending per capita in each category and the state unemployment rate with and without per
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f. Need Effects

Spending on Social Welfare Programs in Rich and Poor States. Final Report.. f. Need Effects

When we repeated the regressions separately by quartile, poverty continued to exert consistently negative signs only for the richest states (Quartile 1) and generally had more positive signs for the other quartiles. However, the only statistically significant and positive effects of the poverty variable occurred for cash assistance in quartiles 2
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e. Federal Grant Effects

Spending on Social Welfare Programs in Rich and Poor States. Final Report.. e. Federal Grant Effects

When we estimated the regression separately for each quartile, the signs of the effects of federal grants reverse or the coefficients are estimated with less statistical significance for the poorest states (Quartile 4), indicating weak grant income effects for those states, as shown in Exhibit III-11.
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d. Fiscal Capacity Effects

Spending on Social Welfare Programs in Rich and Poor States. Final Report.. d. Fiscal Capacity Effects

From Exhibit III-11, we can see that when the states are separated by quartiles based on average per capita personal income, differences across quartiles in the estimated effects emerge. For example, for cash assistance and non-health social services, the effect of personal income for the richer states (Quartiles 1 and 2) is statistically signific
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2. Results by Quartile

Spending on Social Welfare Programs in Rich and Poor States. Final Report.. 2. Results by Quartile

Exhibit III-11 shows results for the same regression model estimated separately for each of the 4 quartiles defined by mean real per capita personal income. Below, we summarize the general findings from this analysis by quartile and spending category for the explanatory variables of greatest interest: (1) fiscal capacity, (2) federal grants, (3) n
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1. Results for All States

Spending on Social Welfare Programs in Rich and Poor States. Final Report.. 1. Results for All States

Exhibit III-10 displays the regression results for the five regressions with dependent variables defined as respective categories of per capita state and local spending (CA - cash assistance, M - Medicaid, NSS - non-health social services, PH - public hospitals, and non-social welfare - NW) for all states. 21 Below the estimated coefficients, t-s
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B. Overall Results of Econometric Analysis

Spending on Social Welfare Programs in Rich and Poor States. Final Report.. B. Overall Results of Econometric Analysis

Using conventional ordinary least squares, we estimated the 50-state econometric model on pooled time series and cross-section data on state and local spending for the 24 years from 1977 to 2000. We conducted standard tests for auto-correlation of residuals, which sometimes constitutes an issue for time series analysis. 19
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2. Changes Over Time

Spending on Social Welfare Programs in Rich and Poor States. Final Report.. 2. Changes Over Time

Averages over time cannot show changes in the relationships between state fiscal capacity and spending on social welfare programs. Yet those relationships changed enormously between 1977 and 2000. To see these developments, we traced changes in average spending levels in each of these quartiles and for each category of social welfare spending.
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1. State Fiscal Capacity and Average Spending on

Spending on Social Welfare Programs in Rich and Poor States. Final Report.. 1. State Fiscal Capacity and Average Spending on Social Welfare

When averaged over the entire period from 1977 to 2000, per capita spending on social welfare was positively correlated with state fiscal capacity, as shown in the chart at the top of Exhibit III-2. 17 A similar pattern exists for spending per poor person, shown at the bottom of Exhibit III-2. When public hospital payments were included, the weal
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A. Historical and Cross-State Perspective: Trends

Spending on Social Welfare Programs in Rich and Poor States. Final Report.. A. Historical and Cross-State Perspective: Trends and Patterns

The connections between state fiscal capacity and spending on social welfare have undergone vast changes in recent years. Between 1977 and 2000, major shifts occurred in how much was spent on social welfare programs, how states allocated funding across different social welfare functions, and how state fiscal capacity was related to these developme
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Chapter III: Findings and Results

Spending on Social Welfare Programs in Rich and Poor States. Final Report.. Chapter III: Findings and Results

Organized into two subsections, section III, Findings and Results, lays out the report's findings. Subsection A provides an overview of trends and patterns in social welfare spending observed over the period from 1977 to 2000, based primarily on Census data. Subsection B presents the results from the 50-state econometric model.
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Endnotes

Spending on Social Welfare Programs in Rich and Poor States. Final Report.. Endnotes

7 The Census defines this category, which is primarily Medicaid spending, as "payments to medical vendors."
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D. Integrated Analysis Between Econometric Model

Spending on Social Welfare Programs in Rich and Poor States. Final Report.. D. Integrated Analysis Between Econometric Model and Site Visit Data

We designed our field research in part to help interpret the estimated econometric models and extend the range of factors whose influences might be assessed. At the most general level, the analyses of the econometric data posed and sharpened the questions for the site visits and related analyses of the six states.
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3. Selection of Poor States

Spending on Social Welfare Programs in Rich and Poor States. Final Report.. 3. Selection of Poor States

Selected for site visits through a three-step process, the six states were Arizona, Louisiana, Mississippi, New Mexico, South Carolina, and West Virginia. First, we ranked all states by an index composed of state fiscal incapacity (i.e., per capita personal income, inversely scored) and social needs (i.e., federal poverty rates) and eliminated the
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2. Approach

Spending on Social Welfare Programs in Rich and Poor States. Final Report.. 2. Approach

The site visits consisted of discussions with state officials in each of six states about state budget processes and choices involving major social programs, including TANF cash and non-cash assistance, child care subsidies, child welfare, Medicaid, SCHIP, SSBG, and others. We met with high-level agency administrators responsible for these program
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1. Purpose

Spending on Social Welfare Programs in Rich and Poor States. Final Report.. 1. Purpose

The study included site visits to six states for in-depth answers to questions about how state fiscal capacity affects state spending on social programs. We visited states with low fiscal capacity and high social needs to understand how such states coped with this seeming imbalance. Three questions were of particular interest:

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