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Intergenerational Transmission of Welfare Dependency
NBER Digest ^ | November 2013 | Matt Nesvisky

Posted on 11/02/2013 5:57:21 AM PDT by reaganaut1

When parents are awarded DI, the likelihood that one of their adult children will participate in DI rises by 12 percentage points over the next decade.

The extent to which welfare dependency is perpetuated from one generation to the next is a question of great social importance for which there is only limited empirical evidence. In Family Welfare Cultures (NBER Working Paper No. 19237), Gordon Dahl, Andreas Kostol, and Magne Mogstad analyze this question using data from the Norwegian disability insurance (DI) system. They study the outcomes of appeals by claimants who were initially denied DI benefits. Judges are randomly assigned to DI appeals, and some are systematically more lenient than others.

The authors investigate whether the children of those whose appeal cases were assigned to lenient judges, and who were therefore more likely to be approved for DI receipt, are more likely to draw welfare benefits than the children of those whose DI appeals were heard by less lenient judges. They verify that the individual characteristics of the appellants are uncorrelated with the assignment of the judges. Their findings indicate that if parents become welfare dependents, the likelihood of their children eventually becoming welfare recipients also increases. Specifically, when parents are awarded DI, the likelihood that one of their adult children will participate in DI rises by 5 percentage points over the next five years, and 11 percentage points over the next decade. These findings suggest that a more stringent screening policy for DI benefits would not only reduce payouts to current applicants, but would also have long-run effects on participation rates and program costs. The results underscore how important accounting for intergenerational effects can be when making projections of how participation rates and program costs may be affected by program reforms.

The authors explore the cultural mechanisms behind the intergenerational relationship that they discover. They do not find any evidence that parental participation reduces the stigma of participation, or that their findings are driven by differential child investments by parents on DI. They conclude that the cross-generational effects may arise from children learning from a parent's experience with the DI program.


TOPICS: Culture/Society
KEYWORDS: disability; norway; welfare
This study was of Norway, but I bet the same effect is present in the U.S.
1 posted on 11/02/2013 5:57:21 AM PDT by reaganaut1
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To: reaganaut1

Norway is about the last country on earth that you’d expect to see publishing something like this.And of course it’s true that welfare in this country is largely mult generational...starting in the early-mid 1960’s.Of course that was the plan all along for Saul Alinsky and his disciples.


2 posted on 11/02/2013 6:04:11 AM PDT by Gay State Conservative (Osama Obama Care: A Religion That Will Have You On Your Knees!)
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To: reaganaut1

Once more, abbreviations and acronyms take a story into the realm of “does this mean ________ or does it mean ————.”
I assume DI means DISABLITY INSURANCE, but I am not 100% sure.


3 posted on 11/02/2013 6:05:17 AM PDT by Tupelo ( Snatching defeat from the jaws of victory. An old Republican Tradition.)
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To: Tupelo

Yes, DI means “disability insurance”. From the article:

‘”In Family Welfare Cultures (NBER Working Paper No. 19237), Gordon Dahl, Andreas Kostol, and Magne Mogstad analyze this question using data from the Norwegian disability insurance (DI) system.”’


4 posted on 11/02/2013 6:08:07 AM PDT by reaganaut1
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To: reaganaut1
Once again it takes a government sponsored scientific study to confirm common knowledge.

They conclude that the cross-generational effects may arise from children learning from a parent's experience with the DI program.

What a surpising finding! Children learn their survival skills from their parents.

Who would have thought?!!!.

5 posted on 11/02/2013 6:08:19 AM PDT by Pontiac (The welfare state must fail because it is contrary to human nature and diminishes the human spirit.)
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To: reaganaut1

Dependency is addictive and destructive to the human spirit. It doesn’t matter whether its a multimillion dollar trust fund baby or a section-8 baby momma.


6 posted on 11/02/2013 6:09:14 AM PDT by SampleMan (Feral Humans are the refuse of socialism.)
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To: reaganaut1
Family Welfare Cultures

That sounds very pretty...has a certain ring to it, much better than, 'Families sucking on the government tit forever.'
7 posted on 11/02/2013 6:10:17 AM PDT by AD from SpringBay (http://jonah2eight.blogspot.com/)
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To: reaganaut1

Of course it is—and it’s probably worse here.

When we are paying women to have children out of wedlock, and increase their pay with each additional out of wedlock child, there’s something awfully wrong with this picture.

Instead, I propose that we build government sponsored orphanages in which to place these babies. It would be cheaper in the long run—and would probably go a long way to coming close to ending the problem. When there’s no money in it, I think the number of children born out of wedlock will fall significantly.

I would much rather my tax money went to birth control and education and job training than for encouraging women to have babies out of wedlock by increasing their paycheck with each additional child.


8 posted on 11/02/2013 6:10:54 AM PDT by basil (2ASisters.org)
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To: reaganaut1
This reminds me of a story from Hurricane Andrew.

A reporter was going through several neighborhoods that were particularly hard-struck by the storm. A day or two had past, most residents were picking up and picking through debris, trying to restore some sort of order out of the chaos.

He came upon one lot, where a small house had once stood, and there were three generations of a family who had been living there -- sitting on makeshift seats, and leftover mattresses -- just sitting and biding their time. Curious, he asked them why they weren't involved with the clean up. One of the elders replied

oh, we're just waiting for the government to come an do it...

9 posted on 11/02/2013 6:23:11 AM PDT by fone (God save us.)
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To: reaganaut1

When a kid in high school is asked what he plans to do after he graduates and he smiles and says he’s going on disability and there’s nothing wrong, you know there’s a problem.

Here people with real disabilities have been denied. Same people are in like Flynn once they claim they’re alcoholics.


10 posted on 11/02/2013 6:36:40 AM PDT by meatloaf
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To: reaganaut1

There was a study floating around a couple of months ago that demonstrated that city mice develop larger brains than country mice. The study suggested, in a nutshell, that country mice, in an environment in which food is plentiful, don’t have to be very smart to get it; city mice have to grow bigger brains because they are more challenged to make their way in the world. Extrapolating, dependency makes populations stupid.


11 posted on 11/02/2013 7:18:55 AM PDT by missycocopuffs
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To: missycocopuffs
Extrapolating, dependency makes populations stupid.

And thinking about our schools, I'd say it works the other way round, too.

12 posted on 11/02/2013 8:28:47 AM PDT by BfloGuy (The final outcome of the credit expansion is general impoverishment. [Ludwig Von Mises])
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