Rebecca Y. Kim - Improving Childrens Lives

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CHILDRENS OF POVERTY STUDIES ON THE EFFECTS OF SINGLE PARENTHOOD, THE FEMINIZATION OF POVERTY, AND HOMELESSNESS

edited by

STUART BRUCHEY

UNIVERSITY OF MAINE

IMPROVING CHILDRENS LIVES ALTERNATIVES TO CURRENT ANTIPOVERTY POLICY

__________________

REBECCA Y. KIM

First published 1996 by Garland Publishing, Inc.

This edition first published in 2021 by Routledge

605 Third Avenue, New York, NY 10017

and by Routledge

2 Park Square, Milton Park, Abingdon, Oxon 0X14 4RN

Routledge is an imprint of the Taylor & Francis Group, an informa business

Copyright 1996 Rebecca Y. Kim

All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers.

Notice:

Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe.

Publishers Note

The publisher has gone to great lengths to ensure the quality of this reprint but points out that some imperfections in the original copies may be apparent.

Disclaimer

The publisher has made every effort to trace copyright holders and welcomes correspondence from those they have been unable to contact.

Library of Congress Cataloging-in-Publication Data

Kim, Rebecca Y., 1957

Improving childrens lives : alternatives to current antipoverty

policy / Rebecca Y. Kim.

p. cm. (Children of poverty )

Includes bibliographical references and index.

ISBN 0-8153-2538-X (alk. paper)

1. Public welfareUnited States. 2. Child welfareUnited

States. 3. Poor childrenUnited States. 4. Family allowances

United States. S. Income maintenance programsUnited States.

I. Title. II. Series. vHV95.K45 1996

362.70973dc20

96-36706

ISBN 13: 978-1-03-216570-7 (hbk)

ISBN 13: 978-1-03-216717-6 (pbk)

ISBN 13: 978-1-00-324951-1 (ebk)

Contents

1. Introduction
   • Profile of Families with Children in the United States
     • Demographic Trends
     • Poverty among Children
     • Childrens Health Status and Insurance Coverage
     • Current Public Transfers
   • Research Objective: Issue of Income-Testing versus Non-Income-Testing
2. U.S. Policy Initiatives and A Proposed New Regime
   • U.S. Policy Initiatives for Children during the Past Decades
     • Welfare Reform
     • Enforcing Private Child Support
     • Health Care Reform
     • Tax Reform
   • A New Regime: Proposed Non-Income-Tested Programs
     • Child Support Assurance System
     • Childrens Allowance
     • National Health Insurance
3. Literature Review
   • Prior Research on Child Support Assurance System
   • Prior Research on Childrens Allowance
   • Prior Research on National Health Insurance
   • Why Further Research?
4. Data and Methods
   • Data
   • Methods
     • AFDC and Food Stamp Imputation
     • Estimating Gross Wage Rates
     • Figuring Current Tax System
     • Changes in Child Support Situation
     • Changes in Health Care System
     • Determining Levels of Childrens Allowance
     • Labor Supply Simulation Model
5. Results
   • Effects on Poverty
   • Effects on Welfare Participation and Expenditures
   • Effects on Income Redistribution
   • Effects on Labor Supply
   • Interaction Effects of Three-Combined Programs
   • Components of Cost and Savings, and Net Costs
   • Sensitivity Test to Values of Health Care Coverage
   • Sensitivity to Labor Supply Model
   • Comparing Estimates with Other Studies
6. Conclusion
   • Major Findings
   • Contributions
   • Limitations
   • Conclusion

Tables

• Table 3-1 Features of CSAS Simulation
• Table 3-2 Comparison of Previous Estimates for CSAS
• Table 3-3 Prior Cost Estimates for Alternative NHI Proposal
• Table 4-1 Equation Estimates of Gross Wages for Mothers
• Table 4-2 Equation Estimates of Gross Wages for Fathers
• Table 4-3 Equation Estimates of Probability of Having Award
• Table 4-4 Equation Estimates of Collection Rate
• Table 4-5 Equation Estimates of Amount of Child Support Received
• Table 4-6 Private Child Support Variables
• Table 4-7 Values of Health Care Coverage
• Table 5-1 Effects on Poverty
• Table 5-2 Effects on Welfare Participation
• Table 5-3 Effects on Income Redistribution
• Table 5-4 Labor Supply Response: Mean Hours Worked
• Table 5-5 Comparison of Combined Effect with Sum of Single Effects
• Table 5-6 Components of Costs and Savings under Reform
• Table 5-7 Results with Discounted Values of Health Care Coverage
• Table 5-8 Results from No Labor Supply Simulation
• Table 5-9 Comparison of Estimates with Other Studies

Preface

For the last three decades, the public income transfer system for families with children in the United States has been criticized for being overly targeted on extremely poor families headed by single mothers. Most criticism has focused on two features of the system_ its categorical nature and its reliance on income-tested benefits. Categorical requirements for eligibility, which limit benefits mainly to single-parent families, have been criticized as unfair to two-parent families and as discouraging marriage. Income-tested benefits have been reprimanded because they discourage work in that they reduce benefits by extremely high rates as earnings increase.

To remedy these shortcomings of the over-targeted system, the author discusses three policy proposals, all providing universal benefits: (1) a refundable tax credit for children; (2) universal health care coverage; and (3) a child support assurance system.

In analyzing the three policy changes, the author estimates what benefits would result at what cost using the 1987 panel of Survey of Income and Program Participation. Of particular interest are the potential interaction effects that would result when the three universal programs are combined as a package. Although previous research has provided estimates of the benefits and costs of particular universal programs, this study is the first to address the question of whether the economic effect of the combined programs is equal to the sum of the single programs effects performed alone or greater than the sum.

The findings indicate that the impact of the programs interacting with one another would far exceed the sum of the impacts produced by each program alone. In other words, a multi-faceted approach becomes much more effective in both reducing poverty incidence among children and inducing AFDC families to work and move off welfare. Finally, the author concludes that the United States needs to redirect public policy for families with children from the income-tested (welfare) to non-income-tested (universal) approach.

This study is indebted to Dr. Irwin Garfinkel, major professor of my dissertation committee. Not only has he funded the study, but also he has given me many hours of intensive discussion and excellent perspectives on this work. My special thanks go to Dr. Daniel R. Meyer, committee member, for his tremendous support and numerous insightful comments from the very beginning of the study. Without his patient help for micro-simulation programming, this analysis would have been impossible. I also appreciate suggestions and comments given by other committee members Drs. Barbara Wolfe, Robert Haveman, and Irving Piliavin. Despite my appreciation of these individuals, I am alone responsible for any errors made in the final product of this study.

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