Welfare State And Social Policy In America

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welfare state

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o A concept of government in which the state plays a key role in the protection and promotion of the economic and social well-being of its citizens.
- It is based on the principles of equality of opportunity, equitable distribution of wealth, and public responsibility for those unable to avail themselves of the minimal provisions for a good life.

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d1/d9 ratio

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- comparison of top 10% of workers (based on earnings) and the rest of the population of workers (90%)
- the more positive the number, the more inequality there is
- not comparable across countries

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unemployment insurance

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- social insurance against involuntary unemployment that provides unemployment compensation for a limited period to unemployed workers

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"unemployed worker"

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- jobless, looking for work, available to work
- over 16, not in an institution, civilian
- not discouraged from seeking work, not underemployed

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power resources theory

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- labor is perfectly exchangeable
- workers want commodification of labor; employers want decommodification of labor
- model suggests that the welfare state is built on the shoulders of an unwilling capitalist class, who will be looking for any opportunity to unburden themselves

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asset theory

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-employee skills = assets
-employers make investment in employees when hiring them for specific skills
-this produces risk for the employer

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redistribution

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take money from the wealthy and redistribute to the poor
- ex: income tax, medicaid, TANF, SSI, sCHIP

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insurance

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-everyone pays into a "pool" and has the potential to reap the benefits later
-a lot use a little and a little use a lot
-ex: social security, unemployment insurance, medicare

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commodification

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-to make commercial; to put into the market

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decommodification

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-to take out of the market

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TANF

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-Temporary Assistance for Needy Families
-Redistributive program
-Government provides cash assistance to families with dependent children
-maximum of 60 months of assistance in ones lifetime
-but into effect in 1996 under President Clinton

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SSI

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-supplemental security income
-redistributive program --> funded by general tax revenues
-program that provides stipends to low-income people who are either aged (65 or older), blind, or disabled

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sCHIP

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-state children's health insurance program
-redistributive program
-provides matching funds to states for health insurance to families with children
-designed to help families with income that is modest, but too high to qualify for medicaid

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Social Security

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-insurance program
-idea is that you pay in money throughout your life, and when you retire you get back benefits based on your income throughout your life

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general revenues

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-General revenue is the income a government receives primarily from its taxing authority
-income tax, sales tax
-used to fund redistribution programs

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payroll tax

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-paid by employers and employees
-employers withhold some of employees earnings,and also pay an additional tax for employing someone

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Beland's Basic Types of Social Programs

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-social assistance
-social insurance
-universal transfers and services

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means-tested program

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-all assets are evaluated to determine if one qualifies for social program based on value of all belongings

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income-tested program

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-eligibility strictly based on annual income

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Beland's five policy domains

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1. work, unemployment, welfare
2. pensions
3. health care
4. housing
5. family benefits

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EITC

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-earned income tax credit
-a refundable tax credit that supplements the earnings of low-income workers
-designed to provide a work incentive and to redistribute income to low-income workers
-no perverse incentives/notches--> as earnings increase, total income increases, EITC benefit decreases
-Pretty good on all of weaver's policy traps

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Medicare

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-national social insurance program, administered by the U.S. federal government since 1965, that guarantees access to health insurance for Americans ages 65 and older and younger people with disabilities as well as people with end stage renal disease.
-upper tier program
-not redistributive

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Medicaid

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-health program for certain people and families with low incomes and resources
-a means-tested program that is jointly funded by the state and federal governments, and is managed by the states
-lower tier program
-redistributive

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Outdoor relief

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-form of relief/assistance to the poor that comes in terms of resources
ex: food, money, clothes, etc.

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indoor relief

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-form of relief to the poor where institutions are involved
ex: homeless shelter

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Worker's Compensation

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-a form of insurance providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment
-state-run

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Food Stamps

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-supplemental nutritional assistance program (formally)
-provides financial assistance for purchasing food to low- and no-income people living in the U.S.
-lower tier program

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First New Deal Programs

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- National economy act of 1933 (control veteran's pensions)
- Civilian Conservation Corps
- Federal Emergency Relief Administration
- National Industrial Relations Act
- FDIC (insuring bank deposits)
- FHA (housing administration)
- SEC (security and exchange commission)
- TVA (tennesse valley authority)
- AAA (agricultural adjustment act)

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Second New Deal Programs

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-National Labor Relations Act
-Works Progress Administration
-Fair Labor Standards act
-Social Security Act

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Achievements of New Deal

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-change role of government in welfare state provision
-stabilize and regulate banding
-reorient national politics (democratic control; deficit spending)
-national support of old-age pensions
-national relief to female HHH w/ children
-encouraged/coerced state revenues

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Falsehoods of New Deal

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It Did Not:
-redistribute national income
-challenge capitalism, permanent budget balancing
-consist of a coherent package of programs
-focus on federal pensions, health insurance, relief

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Garbage Can Model of Policy Making

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-Kingdon!
-Three streams coming together --> no real organization of order, just poured simultaneously into the same can
-right mixture in the garbage can of streams produces policy

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Three Streams of Policy Making

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-Problems: recognition that something is a problem
-Policies: identification of the possible solutions
-Politics: requisite opportunities (time, accession to power to a party prepared to act etc.)

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Coupling (Kingdon)

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-occurs when two or more of the streams are joined together
-Coupling may greatly increase the likelihood of a given alternative becoming adopted public policy

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Entrepreneurs (Kingdon)

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-opportunists, specialists, anyone who is an advocate for a specific policy
-entrepreneurs must be ready to move when a policy window opens up
-must invest time, money, and energy and be very persistent
-usually some sort of expert in the field and has some political connections

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Majoritarian

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-adhering to/following the majority
-direct democracy
-median voter is decisive

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Antimajoritarian

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-opposing majority rule
-median voter is not decisive
-ex: electoral college--> president can win the election by winning the electoral college but not the popular vote

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status quo bias

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-tendency for the status quo to defeat other proposals

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filibuster

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informal term for any attempt to block or delay senate action on a bill or other matter by debating it at length, offering numerous procedural motions, or by any other delaying or obtrusive actions

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Gini Coefficient

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-measure of economic inequality in a population
-=0 ; perfect equality
-=1 ; perfect inequality

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Sampling Bias

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sample selection--> sample is not representative
unit response bias --> those who take the survey are not representative
item response bias --> those who give particular responses are not representative

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Survey Bias

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-questions misleading or inaccurate
-statistical estimation bias

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Good Survey Question Characteristics

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-Understood Consistently
-Administered consistently
-indicative

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Pluralism

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-the view that politics and decision making are located mostly in the framework of government, but that many non-governmental groups use their resources to exert influence
-Groups of individuals try to maximize their interests

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Leases

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-parties vie for "leases" related to certain topics
-leases = party deemed to have better control over certain issues
-ex: republicans have a lease on foreign policy, democrats have lease on social issues

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Arrears Act

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-1879
-provides a system through which all the civil war veterans who are disabled because of the civil war can claim a pension
-result of democratic legislature

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incrementalism

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tendency for policies to grow/develop slowly; next year's policy will look like this year's policy except a little more or a little less

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Things the affect political behavior

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-public opinion and attituces
-political knowledge
-political participation

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feedback loop

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-studied by campbell
-looks at how policies affect participation

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Civic Voluntarism Model

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-used to determine factors that affect political participation in an area/within a group
-key components of political participation:
categorization;
engagement;
mobilization

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Senior Responses to Political Threats

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-increase during times when senior policies are under threat (social security)
-seniors increase congressional letter writing
-do not increase local town meeting attendance (b/c soc sec is a national issue not local)
-Campbell finds that senior contacts to congress had effect on how congress voted

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Railroad Pensions

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-first private pension (1870s)
why?
1. efficacy, safety, protection in face of aging workforce
2. peace with labor

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Three-legged stool of post-war pension system

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-social security
-private savings
-employer-based pensions

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Four tiers of post war pension system

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-social security OAI
-social security SSI (means tested)
-private savings
-employer-based savings

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Types of pensions

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-defined benefit
-Cash balance
-defined contribution

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defined benefit pension

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promises a specific monthly benefit at retirement (ex: $100/month)
-protected by PBGC

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cash balance

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-benefit defined by account balance
-account credited each year with pay credit and interest credit paid by employer
-all risk is on employer
-plan protected by PBGC
-defined benefit with cash-out options

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defined contribution

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-employee or employer or both contribute a set amount or rate to pension each year
-contributions are invested on employees behalf and employees have access to funds upon retirement
-ex: 401(k)
-not protected by PBGC because seen as employees investment choice; more worker risk involved

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ERISA

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-employee retirement income security act
passed in 1974
-created to ensure that pensions offered in the private sector were solvent --> i.e. insurance for pensions

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PBGC

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-Pensions benefit guaranty corporation
-federal insurance for pensions
-protects defined benefit plans and cash balance plans but NOT defined contribution plans

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prospect theory

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-kneman and tversky
-model for how people make decisions under risk circumstances
-anchoring: where you start is where you are going to end up
-representativeness/base rates: people give answers that do not make sense
-uncertainty/loss aversion: people are more willing to take risks when losses are on the line

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double payment problem in social security

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-if you increase taxes for current workers then they will be paying into social security in two ways
-contributions from a "pay as you go" program (workers of today pay in money for current retirees with assumptions that when they retire they will reap similar benefits)
-and also diversions from payroll taxes

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Health Care Competing Values

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-quality
-cost
-access

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Medicare Policy

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Part A: hospital insurance; funded by SocSec payroll taxes; care provided by private sector
Part B: Dr. services; financed by premiums and general revenues; private sector administers care
Part C: hospitals and drs; financed by premiums; entirely private
Part D: prescription drugs; financed by payroll taxes and general revenues; entirely private

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sCHIP policy

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-1997 SocSec amendment
-federal matching funds to states
-state design and administration

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Harry and Louise

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-advertising campaign developed during clinton health reform period
-yuppie middle-aged couple talking about how universal health insurance is a bad thing
-very effective
-characters brought back in 2006 and 2008 but with a different spin --> we need to do something about health care and promoting obamacare

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USA Health insurance compared to peers

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-USA spending on total health low compared to others
-employer based and private insurance unique to USA
-lack of universal public provision permits uninsurance

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employer-based health insurance

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-when an employment firm contracts with an insurance firm for health insurance plans for all employees
-developed because insurance firms wanted efficient marketing/premium collection
-by working through businesses firms do not have to deal with individuals which is both more efficient and reliable
-per person cost is also less

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COBRA

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-Consolidated Omnibus Budget Reconciliation Act of 1985
-Amends ERISA
-requires insurers to keep involuntary ex-workers (fired or retired) in group health plan
-remains in effect for 18 months after worker leaves firm

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High-Risk Pooling

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-state sponsored health insurance for the uninsured who have been turned away from insurance firms because of a preexisting condition
-high premiums
-high cost sharing
-funding sources: general revenues, hospital surcharges, tobacco settlement funds, assessments on insurers

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Individual Mandate

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Requires individuals to buy health insurance/be on some sort of health insurance plan

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Employer mandate

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-employers are mandated to provide employees with some sort of health benefit (usually dependent on size, ex: if firm <50 employees then no mandate)

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insurance exchange

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-set of government-regulated and standardized health care plans in the United States, from which individuals may purchase health insurance eligible for federal subsidies

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active purchaser exchange

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-states plays a roll in what sorts of plans appear on the exchange
-premium restrictions, requirements for certain qualities of service, benefit packages are all considered/qualifiers for making it onto the exchange
-Massachusetts Heath Connector model

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open market exchange

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-government is only a facilitator of the exchange but does not control what goes on it
-utah model

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public option

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-way for individuals to buy into something and then the whole group can bargain together
-ex: medicare --> anyone can buy into medicare and reap benefits because medicare spends money more efficiently than private

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uncompensated care

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-when uninsured people get care--> i.e. emergency rooms
-states have pools of money devoted to uncompensated care
-in massachusetts, health reform started with idea of taking that money for uncompensated care (which wouldn't be needed if everyone had health insurance) and using it for something else

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Patient Protection and Affordable Care Act of 2010

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-Obamacare
-Exchanges
-Individual Mandate
-employer mandate
-subsidies
-medicaid expansion (declared unconstitutional)
-insurance reforms

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Class Act

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-Community Assisted Living Service Support
-Part of the ACA that was intended to cover nursing home expenses and home health coverage
-funded by voluntary payroll taxes if you decided to join-->lifetime benefits if you pay into for 5 years
-Act abandoned in Oct 2011

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Dyad

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-Unit of research study for Volden
-Pair of states looked at simultaneously and compared for similarities in programs to measure emulation between states
-if one state adopts a program how does that affect the dyad? (measure of diffusion of policies across state borders)
-usually adjacent/neighbor states

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Volden Findings

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-success of a program induces emulation
-similarity of states induces emulation

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Massachusetts Health Reform

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-individual mandate
-employer "pay or delay"
-connector --> individ, small group, uncovered risk pool
-premium assistance
-medicare/medicaid growth (get people on medicaid who are eligible so federal government is paying for them instead of the state)

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OHIE

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-ohio health insurance experiment
-treatment:
Treatment group: people who were selected (by lottery) to APPLY for medicaid
Control group: people who could not apply for medicaid
-assignment mechanism: treatment group was selected by lottery (random assignment)
-measured outcomes:
coverage; utilization; finances; health (pre-analysis plan--> defined outcomes they were going to measure before experiment began)
-units: uninsured people of low economic standing--> people clustered into household

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Volden experimental design

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treatment: welfare policies
unit: dyads
outcome: whether the dyad experiences and emulation

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Mexico's Seguro Popular

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-significant attempt in mexico at universal coverage
-attempt to insure 50 million uninsured, and increase health spending from 5.6% to 6.6% GDP over 5 years
-Goal is to provide clinics with equipment, drugs, and information
-encourage eligible individuals to enroll in social insurance

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Ohio Issue 3

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-issue 3: ohio healthcare amendment that says a.) no one can be forced to participate in the healthcare system
b.) no law will prohibit purchase or sale of health insurance c.) no penalities or fines for selling of health insurance

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Ohio Issue 3 Campaign

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-ACA favorability in ohio was measured during time of issue 3 campaign
-synthetic ohio was created to use as a control group to compare the effect the issue 3 campaign had on ACA approval
-found that during issue 3 campaign, ACA approval dropped 7% compared to synthetic ohio
-showed that when isolated, campaigns can affect public opinion

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issue public

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those that connect domain specific politics to personal concerns

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attentive public model

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pyramid with attentive public as the top 1/4 of the period and inattentive public as the bottom 3/4 of the pyramid

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issue public model

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venn diagram of overlapping circle each pertaining to a different issue (abortion, taxes, aid to israel, gun control, environment)

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policy feedbacks

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the effect that past policy choices have on later rounds of policy making

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Policy Notch

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-point at which increasing work amount leads to loss or dip in benefits that is greater than the amount of wage increase, thus leaving the recipient worse off despite having more earned income
-perverse incentive to work
ex: losing medicaid or not having kids eligible for health insurance
-net better if earn less

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Weaver's policy traps

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-duel clientele trap: when two populations are intertwined and one is considered deserving but the other underserving and you can't effect one without effecting the other (poor parents and children)

-perverse incentives trap: policies exacerbate/create notches. policy creates problem that polices are trying to solve

-federalism trap: strengthening federal standards decreases state flexibility

-money trap: need to spend money on programs to make them successful, but spending money is unpopular (improving welfare is popular, but spending more money on welfare is not popular, so what do we do?)

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earning disregards

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-amount of earned income that is disregarded if one is on welfare
-Earned income disregards can be used for two separate but related purposes. 1.) They can be used to encourage work effort on the part of welfare recipients and 2.) as a means to supplement the income of low-wage employees.
ex: keep $30/month +1/3 of rest. remaining 2/3 is disregard because also receiving benefits

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welfare policy features

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-earning disregards
-asset limits
-work requirements
-residency requirements
-"man of the house"

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Economic Opportunity Act of 1964

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-part of LBJ's war on poverty
-established local "community action agencies"
implement local plans for great society antipoverty job search, job training, basic education etc.
-required maximum feasible participation of the poor

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Family Assistance Plan

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-proposed by Nixon in 1969
-replace AFDC, Food Stamps , and Medicaid with minimum income administered through tax code
-idea was to insure that all families had a minimum income --> negative income tax = safety net for the poor

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welfare queen

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used by reagan to describe people accused of collecting excess welfare payments through fraud
-"there's a welfare queen on the south side of chicago..."
-stereotyped as poor black women

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Kingdonian Streams applied to 1990s policy making episode

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Problems: recession; high child-poverty rates (dual clientele trap); intergenerational transmission of poverty; increasing AFDC caseloads; decreasing work by AFDC recipient women
Policies: liberal (prevent/rehabilitate cases; incentives; universalism); conservative (new paternalism; deterrence; devolution)
Politics: clinton bipartison approach; issue ownership-->dems claiming credit instead of avoiding blame

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PRWORA

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-personal responsibiltiy and work opportunity act
-enacted in 1996
-instituted TANF
-abolished AFDC and JOBS

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Hypotheses of causes of propagation of racially unequal policies

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-racial resentment
-minority individualism
-denial of discrimination legacy, opportunity gap
-group threat
-principled conservatism

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Ellwood Solution summary

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-poor support: supplemental, transitional, jobs
-contradictory values: autonomy of the individual, virtue of work, primacy of the family, desire for and sense of community
-conundrums: security vs. work; assistance vs family structure; targeting vs isolation

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Murray's healthcare proposal

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-health savings account, high deductible plans
-stipulations: requires community rating
-governing value = autonomy of the individual