The Canadian Safety Net for the Elderly

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Recently various analysts have called attention to the apparent success of the Canadian social assistance system in reducing poverty among the elderly and have suggested that there may be lessons to be drawn from the Canadian experience that are relevant to the evolution of the U.S. Supplemental Security Income (SSI) program. This article profiles the Canadian system, compares the system to the U.S. SSI program, reviews the consequences for elderly poverty rates, assesses system costs, and then comments on pertinence of the Canadian experience to SSI policy. The Canadian minimum income guarantee for the elderly is substantially more generous than what is provided by the United States, but it is misleading to claim that the Canadian system costs only “slightly more” than the U.S. program. Such a judgment overlooks a key and costly part of the Canadian system, the Old Age Security demogrant. We estimate the total costs to Canada of providing income support for elderly persons receiving a Guaranteed Income Supplement (GIS) in 2004 to be approximately C$13.3 billion (roughly US$11.1 billion), slightly more than 1 percent of gross domestic product (GDP) and almost fourteen times the U.S. allocation for SSI and food stamps for elderly SSI recipients. The significance of this commitment is underscored when it is recognized that in 2004 Canadian GDP per capita was just 80 percent of the U.S. level. The Canadian example suggests U.S. policymakers consider better integration of SSI with basic Social Security benefits, experimenting with alternatives to restricting SSI eligibility to individuals with very few assets, and reducing barriers to program access.

Suggested citation
Wiseman, Michael, and Ycas, Martynas. “The Canadian Safety Net for the Elderly.” Social Security Bulletin. Vol. 68, No. 2, 2008.


Poverty in the US and the UK: relative measurement and relative achievement

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By the government’s official measure, 18 percent of children in the United Stateswere living in poor families in 2007.  In the United Kingdom, where the Labour party has set a goal to reduce child poverty by 2010 to half the level observed in 1998/99 (and a 2020 goal to eliminate it), the official measure for 2006/2007 was 22 percent.  While it may appear at first that US children are in a better position, this is misleading because of differences in procedures for measuring poverty in the two countries.  Poverty in the UK is assessed by comparing a broadly defined measure of household income to a threshold amount equal to the 30th percentile of the overall income distribution.  When a similar approach is used for US data, the estimated child poverty rate rises to 29 percent.  It is likely that the new US administration will alter current procedures for poverty assessment in the US, and UK methods would be usefully studied.  At the same time, the UK would benefit from study of American survey procedures and reform proposals.

Suggested citation:
Wiseman, Michael, and Schwalb, Rebecca. “Poverty in the US and the UK: Relative measurement and relative achievement.” Research in Public Policy: Bulletin of the Centre for Market and Public Organisation, No. 7, pp. 16-19.

Elderly Poverty and Supplemental Security Income

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In the United States, poverty is generally assessed on the basis of income, as reported in the Current Population Survey’s (CPS’s) Annual Social and Economic Supplement (ASEC), using an official poverty standard established in the 1960s. The prevalence of receipt of means-tested transfers is underreported in the CPS, with uncertain consequences for the measurement of poverty rates by both the official standard and by using alternative “rela¬tive” measures linked to the contemporaneous income distribution. The article reports results estimating the prevalence of poverty in 2002. We complete this effort by using a version of the 2003 CPS/ASEC for which a substantial majority (76 percent) of respondents have individual records matching administrative data from the Social Security Administration on earnings and receipt of income from the Old-Age, Survivors, and Disability Insurance and Supplemental Security Income (SSI) programs. Adjustment of the CPS income data with adminis-trative data substantially improves coverage of SSI receipt. The consequence for general poverty is sensitive to the merge procedures employed, but under both sets of merge procedures considered, the estimated poverty rate among all elderly persons and among elderly SSI recipients is substantially less than rates estimated using the unadjusted CPS. The effect of the administrative adjustment is less significant for perception of relative poverty than for absolute poverty. We emphasize the effect of these adjustments on perception of poverty among the elderly in general and elderly SSI recipients in particular.

Suggested citation
Wiseman, Michael, and Nicholas, Joyce. “Elderly Poverty and Supplemental Security Income.” Social Security Bulletin. Vol. 69, No. 1, 2009, 45-73.

Next Steps in Welfare-to-Work

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Chapter in David L. Weimer and Aidan R. Vining, Editors, Investing in the Disadvantaged: What We Know, and What We Need to Know, about the Benefits of Social Policies. Washington: Georgetown University Press, 2008.

Welfare-to-work policies seek to build human capital by encouraging and facilitating greater or more beneficial participation in labor markets. Effective policies not only increase income but also generally raise the return to additional human capital investment. What are possibly effective policies? How can we know if they would be effective? How do we know if they are desirable?

In this chapter I answer the first two questions by proposing several policy demonstrations. Each of the demonstrations is motivated to some extent by existing research. Its execution would generate information that would enable researchers to determine its effectiveness. I answer the third question by reviewing the application of cost-benefit analysis (CBA) to the Minnesota Family Investment Program, one of the most important state initiatives in the welfare policy area in terms of breadth of assessment and contribution to policy development.

I propose three demonstrations: first, an experiment with subsidized third-party provision of strategic financial advice and support for working low-income families; second, coordinated state experimentation with a transitional incentive package for recipients of Temporary Assistance for Needy Families (TANF); and third, an employment intervention for TANF applicants and recipients with substantial disabilities. There is a common theme to these proposals. Each involves changes in factors that influence both what is gained from human capital currently possessed and from additional investment in skills and reputation for targeted 2 families. For working families, the third-party advisor demonstration targets access to benefits, information, and sense of personal control. The transitional incentive package demonstration intends to rekindle state interest in active efforts to improve TANF policies that influence incentives to work. The employment intervention creates an incentive for refocusing the attention of TANF applicants and recipients with substantial disabilities on habilitation and skill development rather than benefits acquisition. All three involve uncertain benefits or costs about which a well-designed experiment should produce considerable information.

Suggested citation:
Wiseman, Michael. “Next Steps in Welfare-to-Work,” Chapter 11 in David L. Weimer and Aidan R. Vining, Editors, Investing in the Disadvantaged: Assessing the Benefits and Costs of Social Policies. Washington: Georgetown University Press, 2009, 187-204.

Elderly Poverty and Supplemental Security Income, 2002-2005

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Abstract: The Supplemental Security Income (SSI) program is the nation’s safety net for the aged, blind, and disabled. SSI receipt is often not reported by individuals interviewed in the Current Population Survey (CPS), the statistical base for the Census Bureau’s annual estimates of poverty rates. In an earlier article, we explored the effect on estimated poverty rates in 2002 of adjusting CPS income reports using administrative data on earnings and benefits from the SSI and Old-Age, Survivors, and Disability Insurance programs. We assessed poverty using both the official standard and a “relative” standard based on half of median pretax, posttransfer income. This article extends that work through 2005. We find that including administrative data presents challenges, but under the methodology we adopt, such adjustments lower estimated official poverty overall and increase estimated poverty rates for elderly SSI recipients. Relative poverty rates are much higher than official poverty rates. By any of the applied standards and procedures for income adjustment, poverty changed little over the 2002–2005 interval.

Suggested citation: Wiseman, Michael, and Nicholas, Joyce. “Elderly Poverty and Supplemental Security Income, 2002-2005.” Social Security Bulletin. Vol. 70, No. 2, 2010, 1-29.

Supplemental Security Income for the Second Decade

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Supplemental Security Income (SSI) is an odd combination of income support for families with disabled children, disabled working-age adults, and elderly persons with inadequate retirement incomes. Less than three percent of Americans receive SSI payments. The program faces challenges on all three fronts: Payments for children with disabilities bear little relationship to family need or costs associated with caring for disabled children. State efforts to promote transition of children and adults from general assistance and TANF to SSI appear driven by fiscal considerations with little attention to health, functioning, and social integration objectives. Measuring the impact of poverty among the elderly is hampered by severe underreporting of benefits in survey data, most notably the Current Population Survey. This paper argues that SSI serves important purposes, but that all three target populations, especially children, might be served best by gradual decoupling or at least improved integration with other programs targeted to each of the three groups.

Suggested Citation:
Wiseman, Michael. “Supplemental Security Income for the Second Decade.” Poverty & Public Policy. Vol. 3, No. 1 2011, 1-18.

Financial Performance Incentives

“Financial Performance Incentives” (with Steve Wandner).  In Douglas Besharov and Phoebe Cottingham, editors, The Workforce Investment Act: Implementation Experiences and Evaluation Findings.  Kalamazoo, Michigan:  Upjohn Institute for Employment Research, 2011.
Click here for more information on the book