Kasper, Hirschel. 1968. "Welfare Payments and Work Incentive: Some Determinants of the Rates of General Assistance Payments." Journal of Human Resources 3(1):86-110.

Recently the subject of the relation between the level of welfare payments and the number of people receiving welfare has attracted renewed interest. This paper presents an analysis of the determinants of the proportion of people receiving one form of public assistance, General Assistance Payments. We develop a model which is somewhat more complete than those of earlier studies by including more appropriate measures of the economic forces which affect the likelihood of people receiving GAP. Our results suggest that labor market conditions, particularly the unemployment rate during the recent past, is the most consistent explanation of variations in the rate of assistance. The level of the payments themselves seem to play a distinctly secondary role. These conclusions hold for both the numbers of families and individuals on General Assistance. In addition, we show that the recent controversy regarding the effect of the level of GAP on the demand for assistance is likely to be a matter of model specification rather than matters of definition or theory.

Mr. Kasper is Associate Professor of Economics, Oberlin College. This study was completed while the author held a Brookings Research Professorship. He wishes to express his appreciation to Glen G. Cain, John Conlisk, Arthur S. Goldberger, Robert J. Lampman, and Arthur W. Wright for their assistance and comments on an earlier draft. He also wants to acknowledge the support for computational and clerical assistance of the Institute for Research on Poverty and of the Social Systems Research Institute, University of Wisconsin, from the Ford Foundation grant for study of the Dynamics of the Labor Market.

© 2003 by the Board of Regents of the University of Wisconsin System

US ISSN 0022-166X

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