America Becoming Racial Trends and Their Consequences: Volume II (2001) / Chapter Skim
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7. Ethnic and Racial Differences in Welfare Receipt in the United States
7. Ethnic and Racial Differences in Welfare Receipt in the United States
Pages 152-173
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From page 152... ...
One is that the differences arise from differences in the underlying risk factors associated with welfare receipt rates of single motherhood, poverty, low earnings capability and job skills, high rates of unemployment, low levels of education, and similar variables. The other is that there are inherent differences in the propensity to take up welfare by different ethnic and racial groups, usually thought to arise from different cultural and social norms for the acceptability of being on welfare and different 152
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From page 153... ...
Second, we explore the alternative sources for this difference by quantifying the relative importance of measurable risk factors, which differ across race and ethnic groups, on the one hand, and immeasurable differences, which include differences in cultural and social norms, on the other. We find that the majority of most differences in welfare receipt can be explained by measurable risk factors, including differences across race and ethnic groups in earnings and other forms of nonwelfare income, in family structure, in education, and in other variables representing disadvantaged status more generally.
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From page 154... ...
The Medicaid program historically provided benefits primarily to AFDC families but today provides significant benefits to children of poor, nonwelfare families, resulting from a series of legislative expansions of eligibility in the late 1980s and early l990s.2 Housing assistance is the only major noncash program that is not an entitlement, and serves all family types who are low income; however, priority has historically been given to AFDC families, which has resulted in a caseload that is disproportionately composed of unmarried women with children. Aside from AFDC-TANF, the only major remaining cash-benefit program is the Supplemental Security Income (SSI)
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From page 155... ...
Created by Congress in 1964, the Food Stamp Program caseload grew rapidly from the late 1960s through the early 1970s, and then grew more slowly in the late 1970s. The early 1970s growth resulted from a 1973 mandate that the program be extended nationwide, and the late 1970s growth was partly the result of the elimination of the purchase requirement (i.e., the requirement that families "buy" their Food Stamps with their own cash)
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From page 156... ...
households in four meanstested programs AFDC, Food Stamps, Medicaid, and Housing assistance during 1994 to 1996.4 Rates are shown for five broad race-ethnic groups: Hispanics, non-Hispanic Whites, non-Hispanic Blacks, American Indians and Alaska Natives, and Asian and Pacific Islanders. Participation rates vary markedly across the groups.
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From page 157... ...
AFDC Food Stamps Housing Medicaid Assistance Hispanic 11.8 20.1 24.5 9.1 Non-Hispanic White 2.7 5.7 8.3 3.5 Non-Hispanic Black 14.0 23.3 27.0 15.3 American Indian and Aleut. Eskimo 15.6 24.5 43.8 11.4 Asian and Pacific Islander 4.9 7.1 13.5 5.3 SOURCE: Authors' tabulations from the March 1994,1995, and 1996 Current Population Surveys.
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From page 158... ...
The figures represent dependence on one of several welfare programs (primarily AFDC, Food Stamps, and SSI)
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From page 159... ...
159 oo En V)
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From page 160... ...
Interesting to note is that participation in housing assistance has grown over the period as well, by almost 3 percent 6The CPS in the mid-l9SOs did not separately identify American Indians and Alaska Natives, or Asians and Pacific Islanders, so these two groups are omitted from the table.
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From page 161... ...
The major conclusion from Table 7-4 and Figure 7-2 is that relative race-ethnic differentials in welfare participation have been fairly stable over the last decade. Although a somewhat greater increase in Medicaid and Food Stamp participation by Hispanics than by non-Hispanic Blacks and by Whites led to a somewhat higher rate of growth of overall welfareprogram participation over the decade, the three race-ethnic groups did not change relative position.
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From page 162... ...
The participation rates shown in Tables 7-1 through 7-4 are more reliable indicators of the propensities that are the more important subjects of policy interest. CORRELATES AND RISK FACTORS An important question is why the differences in welfare-participation rates across race and ethnic groups are so large.
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From page 163... ...
The risk factors we use to explain welfare receipt are listed in Table 7-5, which shows the association of several risk factors with welfare-program participation by households, and also the composition of the population of each race and ethnic group relative to each risk factor. For example, the first four rows of the first column of the table show that household type is highly correlated with welfare participation, for almost 54 percent of all female heads of households with childrennot restricted by income or any other characteristic received either AFDC, Food Stamps, Medicaid, or housing assistance in the mid-199Os.
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From page 166... ...
, where non-Hispanic Blacks, Hispanics, and American Indians and Alaska Natives have the greatest concentration. Still, because the differences in welfare-participation rates between the secondlowest earnings quartile interval (24.4 percent)
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From page 167... ...
The degree to which these risk factors can explain welfare receipt across the various race and ethnic groups can be quantified using wellknown statistical methods. Working with a fixed set of measurable risk factors those in Table 7-5, for example one can determine how those risk factors correlate with welfare-participation rates for a particular raceethnic group, say, Hispanics.
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From page 168... ...
50 45 40 ,, 35C' 30 25 20 15 10 o Id] Unadjusted ~ Adjusted Non-Hispanic Hispanic American Indian Asian and Pacific Black and Alaska Islander Native FIGURE 7-5 Adjusted and unadjusted race-ethnic differences in any welfare recipiency rate, relative to the White population, 1995.
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From page 169... ...
Approximately 89 percent of the gap between non-Hispanic Blacks and non-Hispanic Whites is so-explained, and more than 95 percent is explained for Hispanics, American Indians and Alaska Natives, and Asians and Pacific Islanders. Thus, the differences across groups in factors that can be identified and measured income, family structure, and related variables provide the explanation for the higher welfare-participation rates of the four minority groups.
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From page 170... ...
suggests that there are major differences across the races in what they term the "private safety net," and that this can explain much of the racial difference in welfareparticipation rates. Also omitted from the list of risk factors are those that would enable a more accurate accounting for job availability and options in the labor market, including residential location and distance from jobs; variables measuring health and disability status; and variables measuring capital market constraints and constraints on ability to borrow.
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From page 171... ...
Most of these risk factors for welfare participation are addressable by public policies. Although it does not seem likely that race-specific welfare policies are either likely in the near future or desirable, reducing the disparities in the underlying risk factors, or in their underlying causes, should have the beneficial by-product of reducing disparities in welfare receipt as well.
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From page 172... ...
The adjusted participation rates were obtained by inserting the non-Hispanic White means for these regressors into the estimated equation for each of the four minority groups. The estimated regression coefficients are available upon request.
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From page 173... ...
U.S. Social Security Administration 1991 Annual Statistical Supplement to the Social Security Bulletin, 1991.
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