Children of welfare recipients more likely to become dependent on government handouts

Sunday, January 10, 2016 by: J. D. Heyes
Tags: welfare recipients, government dependence, children

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(NaturalNews) One timeless question that social researchers have often asked regarding welfare assistance is whether such assistance is generational. In other words, if parents are dependent on welfare and other taxpayer-supported assistance programs, will their children become dependent as well?

According to a new study on the subject, researchers were not able to establish a firm "causal" relationship, but there is much empirical (observed) evidence and data to suggest that there could be a generational link.

As noted in a press release from the University of Chicago citing the study, a number of past studies have "shown that a child's welfare use is correlated with a parent's welfare receipt." But, researchers have been unable to show a causal relation due to a number of unobservable factors across multiple generations, like recipients' adverse environments or poor health that was inherited. Also, a dearth of large datasets that firmly link family members together across generations has prevented a more comprehensive analysis.

Still, there are links, scientists noted.

Empirical evidence exists

"These empirical challenges have meant that existing research has largely focused on documenting and observing the intergenerational correlations in various types of welfare use," said Magne Mogstad, assistant professor of economics, a study author. "A causal interpretation remains elusive."

The new study, which was published recently in the Quarterly Journal of Economics, Mogstad and the other co-authors at the University of California, San Diego, and the University of Bergen in Norway looked into family welfare cultures in Norway's Disability Insurance System.

After examining 14,722 parent-child observations, the research team found strong empirical evidence that one generation's reliance on welfare was likely to lead to greater welfare use in the next generation.

The U of C press released further noted:

The study specifically targeted children of applicants who had initially been denied disability benefits from 1967 to 2010. The data are derived from Norway's Social Security Registers that contain complete records for all individuals who entered the disability insurance program, as well as administrative data from the hearing office on all appeals from 1989 to 2011.

"Critical to the analysis--and being able to get at causation and not just correlation--is that these appeals claims are randomly assigned. One simply cannot shop around for a judge. It's luck of the draw," said Mogstad. "And some judges are systematically more lenient, allowing up to 25 percent of appeals, while others are systematically more strict, approving as few as 5 percent."

The study's results led researchers to conclude that, when parents were granted benefits during the appeals process because they were able to sit before a more lenient court, the probability of their children subsequently applying for disability insurance rose 6 percent over the next five years; over the next decade, it rose by 12 percent.

"Mogstad and his fellow researchers conclude that a more stringent screening policy for disability benefits would not only reduce payouts to current applicants, but also have a long-term impact on participation rates and program costs," the press release stated.

Benefits programs are unsustainable

In the U.S., the study noted, disability insurance outlays are higher than those for food stamps and traditional cash welfare programs. For families with small children, disability insurance is very often the only cash benefit left when traditional unemployment benefits are exhausted, so it has increasingly become an option exercised by a growing number of Americans.

As reported by The Washington Post, disability rolls in the U.S. have skyrocketed in recent years as the economy slowed and then stagnated:

The fast expansion of disability here is part of a national trend that has seen the number of former workers receiving benefits soar from just over 5 million to 8.8 million between 2000 and 2012. An additional 2.1 million dependent children and spouses also receive benefits.

The sheer number of new recipients is making the program financially unsustainable, government reports have said. Federal officials have warned that the program could be financially exhausted by 2016, which is two decades before the trust fund supporting Social Security is projected to run out.

Sources:

http://news.uchicago.edu

http://qje.oxfordjournals.org

http://www.washingtonpost.com