People in line at a welfare office
ATLANTA -- A new study by Georgia State University says many government programs discourage poor people from adopting productive behaviors.
Authors of the study, who include an economics professor and students working at the university's Fiscal Research Center in the Andrew Young School of Policy Studies, wrote:
At least in some earnings ranges, the tax-benefit system discourages low-income people from investing in education and training, discourages labor supply, encourages fertility, and provides little incentive to marry or to remain so. To the extent that households are aware of and respond to such incentives, the tax-benefit system creates poverty traps rather than promoting behaviors that enable families to escape poverty.
Groups on both sides of the political divide are praising or dismissing the study.
Rep. Jason Spencer (R-Woodbine), who sponsored a bill to require drug tests for welfare recipients, agreed with the findings.
"When the government steps in and subsidizes behaviors that in previous generations would have resulted in great hardship or even death, a sort of social Gresham's Law takes place where bad behavior chases out the good," Spencer said. "Why have a father and husband around when the state will assure your financial situation? Why find a new job when you can collect unemployment for some time?"
But Alan Essig, executive director of the Georgia Budget and Policy Institute that advocates for greater spending on social programs, downplays findings.
"Research overwhelmingly shows the benefits of the programs, especially to kids," Essig said.
Read the study at aysps.gsu.edu.
(Atlanta Business Chronicle)