Publisher Summary Historically, income maintenance has taken the form of private charity or the poor law. These have been typically uneven in their impact, varying from locality to locality, and have been dependent on the generosity and caprices of donors or public relief officials. In the administration of state support, concern for the cost has been paramount, and there has been a lively sense of the possible disincentive to work. The main objective of income support is the relief of poverty. It has been an intermediate objective rather than an end in itself, for example, to avoid civil unrest. Today, there is considerable disagreement about the proper role of income maintenance, but it remains widely accepted that the abolition of poverty is a central objective. The second approach seeks to reduce the multiple values to a single indicator by taking total expenditure and comparing this with a target level of total outlay. The third approach takes total income as the variable to indicate poverty; and it is this approach that is most commonly employed in the studies of poverty. In considering these three approaches to the indicator of poverty, there are two different conceptions. The first, and perhaps the more usual, is concerned with the standard of living, and it points to the use of total expenditure or the consumption of specific commodities. The second is concerned with rights to a minimum level of resources or the opportunity to consume, even if not exercised.

Chapter 13 Income maintenance and social insurance

In 1973 the Government of Canada and the ten provinces agreed to undertake jointly a complete review of Canada's social security system. The review and development of policy options was scheduled to be completed by 1975 with the implementation of chosen options to take a further two or three years. A prominent and much debated policy option with respect to income security was a guaranteed annual income. In 1974 the Government of Canada and the Province of Manitoba agreed jointly to undertake a guaranteed annual income experiment called the Manitoba Basic Annual Income Experiment. The primary research purpose of the experiment was to provide information respecting the labour supply response of the recipients of a system of guaranteed annual income payments. The experiment officially ended in March, 1979, but did not report on the labour supply response. This study examines the history and fate of the Manitoba Basic Annual Income Experiment. Two major conclusions are drawn. The first conclusion is that the Government of Canada had decided shortly after the experiment had begun that it would not support a one-tiered guaranteed annual income program such as was being tested by the experiment. The second conclusion is that social policy research that requires the use of rigorous and complex social science methodology should be considered an important part of the normal policy-making process, but should be conducted by a research body that is independent of the initiating government(s).

Social experiments and social policy formulation: A study of the Manitoba basic annual income experiment.

The potential economic effects of implementing a Basic Income Guarantee (BIG) in the United States are examined using a small-scale computable general equilibrium model in which labor and saving are the fundamental household decision variables. The social choice variables consist of BIG (termed herein “guaranteed minimum consumption”) and public good expenditure. Assuming the model’s benchmark values for the social choice variables are a reasonable approximation to the current situation, solution for the optimal social choice variables suggests that a much larger BIG would be preferable from a social welfare standpoint. This basic result is relatively insensitive to alterations in the model’s parameters. However, there would be such a substantial reduction in aggregate output and saving from moving to the optimal position that the political feasibility of any such policy shift is doubtful, regardless of any indications from economic analysis.

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The Basic Income Guarantee: A General Equilibrium Evaluation

The background, general design and basic findings of a series of large-scale, government-sponsored, income maintenance experiments are described. Attention is given to the use of findings in connection with congressional debate over welfare reform. The findings have apparently fed political and ideological resistance to proposals for a national guaranteed income program for the poor. While we see the findings as bearing on the outcome of such a program, we suggest that much more important are largely unexamined systemic obstacles to a guaranteed income program.

Income maintenance experiments, politics, and the perpetuation of poverty

While considerable attention has been paid to the transfer characteristics of a negative income tax, much less attention has been given to the tax implications of this type of welfare system. This paper looks at the general theoretical links between the tax system and two types of negative income tax systems: one that insures a smooth transition from transfer recipient to taxpayer and one that allows transfer recipients to be taxed. Elements of President Carter's "Program for Better Jobs and Income" are then explored to determine the quantitative importance of the problems suggested by the theoretical analysis.

Principles of Tax Transfer Integration and Carter's Welfare-Reform Proposal

After a summer of furious analytic activity, the Office of Economic Opportunity suomitted to President Lyndon Johnson in October 1965 its first National Anti-Poverty Plan that contained a recommendation for a universal negative income tax for all of the poor according to the single criterion of need. So began the major bureaucratic/political struggle within the federal government for "Negit," as negative income tax schemes came to be called.' The ensuing decade reached a dramatic climax in the congressional defeats of President Nixon's Family Assistance Plan (FAP) and of a modified version of FAP referred to as H.R. 1. Even though Congress twice rejected a negative income tax scheme for families with children, it did enact four pieces of legislation that have important components of the original OEO Negit proposal-the Welfare Amendments of 1967, the 1971 amendments to the Food Stamp Act, Supplemental Security Income, and the so-called Long amendment providing a one-year work bonus to low income families.2 And although the recommendation of a full-blown Negit seems a victim of President Ford's efforts to hold down spending and new initiatives this year, it may be only a temporary hiatus in the continuing struggle for basic reform in the American income security structure.

The continuing struggle for a negative income tax: a review article*

This article is concerned with the methodological and institutional problems faced by a social action agency in trying to make evaluation an important input to its policy process in which major decisions are formulated and implemented. The discussion focuses not only on the present technical capability of evaluation methods to produce useful policy data, but also on the agency's bureaucratic and administrative structure as it impinges upon evaluation. Consideration is given to such matters as the possible blockages by agency decision-makers of the development and use of evaluation data, the degree of cooperation to be afforded by program managers in field evaluations, and the administrative capability of social action agencies to implement the changes in the field implied by evaluative results. Thus, the article presents some of the problems that must be faced in trying to formulate an effective evaluation strategy in the real world of a social action agency with its evaluation problems that often defy present technological tools, its bureaucratic struggles, and its complex administrative machinery; and it offers a few tentative suggestions for moving towards such a strategy.

Walter Williams

Papers

The continuing struggle for a negative income tax: a review article*

Developing an Evaluation Strategy for A Social Action Agency.