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Policy Interaction in the Provision of Unemployment Insurance and Low‐Income Assistance by State Governments
Author(s) -
Craig Steven G.,
Palumbo Michael G.
Publication year - 1999
Publication title -
journal of regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.171
H-Index - 79
eISSN - 1467-9787
pISSN - 0022-4146
DOI - 10.1111/1467-9787.00133
Subject(s) - medicaid , aid to families with dependent children , unemployment , welfare , welfare reform , cash , economics , poverty , state (computer science) , labour economics , demographic economics , low income , public economics , economic growth , finance , health care , market economy , algorithm , computer science
In this paper we investigate empirical relationships between Unemployment Insurance (UI) and welfare policies using a unique database covering 48 states annually from 1973 through 1989. We first document substantial variation across states in UI program outcomes. Having established that UI is so variable, we explore the simultaneous interaction between UI and Aid to Families with Dependent Children (AFDC), Medicaid, and total state and local welfare spending. Our econometric results indicate substitution between the two cash assistance programs, AFDC and UI, by state governments. On the other hand, states that operate relatively generous UI programs also tend to allocate more resources to Medicaid and other in‐kind, low‐income assistance programs.