TY  - JOUR
AU  - Moffitt,Robert
AU  - Ribar,David
AU  - Wilhelm,Mark
TI  - The Decline of Welfare Benefits in the U.S.: The Role of Wage Inequality
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 5774
PY  - 1999
Y2  - April 1999
UR  - http://www.nber.org/papers/w5774
L1  - http://www.nber.org/papers/w5774.pdf
N1  - Author contact info:
Robert A. Moffitt
Department of Economics
Johns Hopkins University
3400 North Charles Street
Baltimore, MD  21218
Tel: 410/516-7611
Fax: 410/516-7600
E-Mail: moffitt@jhu.edu

David C. Ribar
Department of Economics
University of North Carolina at Greensboro
P.O. Box 26170
Greensboro, NC  27402-6170
E-Mail: dcribar@uncg.edu
AB  - Welfare benefits in the U.S. have experienced a much-studied secular decline since the mid-1970s.  We explore a new hypothesis for this decline related to the increase in wage inequality in the labor market and the decline of real wages at the bottom of the distribution: we posit that voters prefer benefits which are tied to low-skilled wages.  We test the hypothesis using a 1969-1992 panel of state-level data.  An additional contribution of" our analysis is the use of General Social Survey data on voter preferences for welfare which we combine with Current Population Survey data to determine the voter in each state who has the median preferred welfare benefit level.  Our analysis reveals considerable evidence in support of a role for declining real wages in the decline of welfare benefits.
ER  -