Welfare is, and has always been, about promoting the welfare of children – not adults. The name of the US’s first nationwide program – Aid to Families with Dependent Children – says it all. It wasnt a program for poor people generally, but for poor families with children. Its predecessor – numerous smaller programs run at the state and county level, collectively referred to as “Mother’s Pension Programs” – also had the wellbeing of children – not mothers – as its central purpose.
For the past forty years, the American debate on welfare has lost sight of what should be its organizing principle: improving the lives of impoverished children. America never got past Reagan’s preoccupation with the “welfare queen.” Even the welfare reform signed into law by Bill Clinton was crafted without respect to what should have been its overarching priority. For decades American policymakers have been asking the wrong questions about AFDC, and its successor, TANF (Temporary Aid to Needy Families), as well as numerous other welfare programs, such as Medicaid and Food Stamps (SNAP).
When scrutinizing welfare programs, Americans have become overly concerned with what economists refer to as “the moral hazard problem.” Like any form of insurance, social insurance is expected to impact behavior. Without car insurance, for example, you would drive more carefully. Without homeowners insurance, you might never use your fireplace. Lacking health insurance, you might never ski. In the absence of unemployment insurance, you might deal with your boss more deferentially. And indeed, without welfare, poor people with children might be more inclined to work, or to put in longer hours at work. These are all instances of “moral hazard” – of people behaving differently because they have insurance.
Despite the moral hazard problem, we are almost always far better off with insurance than without it. It is the folly of conservatives to be preoccupied with the work ethic of poor mothers, who might take welfare as an opportunity to stay home and look after their children. They consistently fail to ask the most important question: whether welfare improves the lives of children.
At last, sanity is being restored to the welfare debate. This week, the New York Times ran an op-ed penned by the Chairman of the White House Council of Economic Advisers. He discusses, approvingly, several new lines of research that supply an empirical basis for the notion that welfare does indeed benefit children. The best and latest scholarship shows that welfare helps children live longer, healthier lives, obtain more years of education, and earn more. Welfare has a positive impact on such diverse phenomena as low-birth weight, high school and college completion rates, teenage mortality, standardized test scores and crime.
All along, the objective of welfare wasnt to make things easier for parents, but to alleviate the harm that poverty inflicts on children. It is encouraging to see this very basic insight embraced by the president’s chief economic adviser, and to see the welfare debate move back toward its proper area of concern.
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