afdc and illegitimacy ratios a vector autoregressive model the expansion of the government programme of aid to families of dependent children afdc plays a major role in theoretical explanations of the sharply rising trend in us illegitimacy ratios the proportion of births occurring to unwed mothers to date this role has not been supported by empirical evidence the present study uses a new approach time series data and granger causation a series of tests shows robust causal impacts of afdc on non white illegitimacy ratios a counterfactual simulation reveals that about half the increase in non white illegitimacy ratios over the past two decades can be attributed to an afdc effect

making sense of the competitiveness debate the debate over national competitiveness is marked by some basic misperceptions with few exceptions those who use the term have a crude essentially mercantilist view of world trade in which competition among nations is just like competition between corporations not only do the authors and readers of reports on national competitiveness usually not understand comparative advantage they are unaware of the most basic adding up constraints economists however find it hard to believe that seemingly well informed people can really be this naive and assume that there must be more sophisticated ideas lying behind what they say the rationales offered by economists in turn offer false comfort to the would be sophisticates who like the term competitiveness they believe that they have transcended conventional economic theory when the fact is that they have failed to comprehend it in short the actual level of discussion is lower than any of the participants imagines copyright 1996 by oxford university press

incentive effects of the u s welfare system a review the author would like to acknowledge support for prior work on this topic from the u s department of health and human services and helpful comments from three anonymous referees rebecca blank howard chernick john fitzgerald irwin garfinkel peter gottschalk edward gramlich david greenberg judith gueron james heckman v joseph hotz robert hutchens michael keane frank levy larry mead michael murray robert plotnick anuradha rangarajan philip robins howard rolston jeffrey smith and daniel weinberg all opinions and errors are those of the author alone

state responses to fiscal crises the effects of budgetary institutions and politics this paper explores the dynamics of state taxes and spending during the late 1980s when regional economic downturns and increased expenditure demands led to substantial state budget deficits more restrictive state fiscal institutions such as no deficit carryover rules and tax and expenditure limitations are correlated with more rapid fiscal adjustment to unexpected deficits political factors are also important when a single party controls the state house and the governorship deficit adjustment is much faster than when party control is divided in gubernatorial election years tax increases and spending cuts are both significantly smaller than at other times

welfare benefits and female headship in u s time series whether welfare benefits affect marriage and fertility decisions of the low income population has been the subject of much research the substantial bias in the u s welfare system toward female headed families relative to either married couples or single childless individuals provides a clear financial incentive for early nonmarital childbearing postponement of marriage divorce postponement of remarriage and other behaviors that make eligibility for welfare benefits more likely or that avoid the loss of eligibility after it has been achieved the findings in the cross sectional research literature through 1995 summarized in moffitt 1998 exhibit a clear central tendency pointing toward an effect of welfare on some aspects of family structure namely marriage and fertility however there is also agreement that the time series evidence is inconsistent with that from crosssectional data for real benefits have been falling for over 20 years while female headship has been rising moreover bringing other programs such as food stamps and medicaid into the picture helps explain rising female headship increases in the late 1960 s and early 1970 s when those programs were introduced and solidified but does less well in explaining the

work and welfare as determinants of female poverty and household headship this paper formulates and estimates a model of the determinants of female household headship headship responds to variations in the levels of well being a woman can expect if she marries or if she heads her own household the authors measure the opportunity cost of female headship and the effects of welfare benefits and womens work in the market on female headship and poverty they find that if welfare benefits were reduced there would be small reductions in the proportion of women heading households for whites and nonwhites but a substantial increase in poverty for nonwhites they also find that wives work in the market reduces poverty and female headship for nonwhites and reduces poverty but increases headship for whites the study is based on 1975 u s data excerpt

a patchwork safety net a survey of cliometric studies of income maintenance programs in the united states in the first half of the twentieth century social welfare programs in the usa are designed to serve as safety nets for people in hard times in contrast with the universal approach found in many other developed western nations in a survey of cliometric studies of social welfare programs in the usa we examine the variation in the safety net in the usa across states in the 20th century the determinants of the variation and its impact on socioeconomic outcomes the usa has always displayed substantial variation in the extent of the safety net because the features of most public social welfare programs have been and currently are determined by local and state governments even after the federal government became involved in the 1930s differences across states persist strongly for typically a decade although the persistence weakens with time and there are some periods when federal intervention led to a re ordering the rankings of state benefits differ from program to program and economic and political factors have different weights in determining benefit levels in panel data estimation of their effects variation in benefits across programs during the early 1900s had significant impact on labour markets economic activity family formation death rates and crime copyright 2010 blackwell publishing ltd

a politico economic theory of income redistribution this study integrates models of income redistribution developed by economists who suggest that citizens voluntarily redistribute because of interdependent preferences and rely on the state for implementation owing to the public good nature of redistribution and political scientists who focus on conditions that lead to demands that the state intervene to assist the poor and on the development of institutions that facilitate such demands we propose a testable theory of redistribution and apply it to data from the american states the empirical analysis addresses determinants of the aid to families with dependent children guarantee adjusted for medicaid and food stamps to which a family receiving the guarantee would be entitled we posit significant links between the guarantee and both observable explanatory variables such as per capita income and latent constructs such as liberal party control we specify observable indicators for the latent constructs and use the lisrel method to estimate parameters for the indicators and structural coefficients the findings show that both political and economic variables significantly affect the level of the guarantee

does welfare play any role in female headship decisions abstract previous studies have examined whether the welfare system has contributed to the dramatic increase in single parent families this paper explores why the results in this literature are sensitive to the presence of state fixed effects it considers one natural explanation namely that the composition of the population differs across states in ways that are related to welfare program generosity after controlling for individual effects the results provide no evidence that welfare raises the propensity to form female headed households for either whites or blacks these results illustrate the potential pitfalls of assuming that state factors are fixed over a long period of time they also suggest that previous studies may have overstated the effect of welfare programs on family structure

from dark to light skin color and wages among african americans this paper develops and tests a theory referred to as preference for whiteness which predicts that the interracial white black and intraracial wage gap widens as the skin shade of the black worker darkens using data drawn from the multi city study of urban inequality and the national survey of black americans we report evidence largely consistent with the theory moreover we decompose the estimated interracial and intraracial wage gaps and find that favorable treatment of lighter skinned workers is a major source of interracial and intraracial wage differences as predicted by the theory

efficient utilization of resources in public schools a case study of new jersey the academic performance of public schools in the united states has been declining for more than two decades now and this is a hotly debated topic since this deterioration in performance has important implications on the quality of labour and on the productivity growth of the nation bishop 1989 moreover the performance among school districts in states varies significantly raising questions about the factors contributing to the large variability in performance one area where the current debate has been focused is the ability and quality of the school management to use the available resources efficiently giving rise to the issues of a voucher system and the private management of the public schools this study measures the efficiency of public schools for the state of new jersey using the data envelopment analysis dea method it also examines the effect of certain socio economic factors on efficiency we find that the average efficiency for all schools is 81 the wealthiest districts have an effi

the american welfare system and family structure an historical perspective cross sectional studies find a positive relationship between a state s welfare benefits and single motherhood but is this evidence of a welfare effect or rather of cross state differences in social attitudes that influence both policy and behavior this paper demonstrates that the spatial variation in welfare policy long preceded the spatial correlation of policy and behavior undermining the social norm hypothesis but the findings also raise doubts about the role that welfare policy played in the changes in family structure over the century the correlation between welfare benefits and family structure only appears in 1970 and then only for whites

understanding young women s marriage decisions the role of labor and marriage market conditions using the 1970 1980 1990 censuses the authors investigate the impact of labor and marriage market conditions on the incidence of marriage of young women age 16 24 they first estimate the effects on marriage of personal characteristics and metropolitan statistical area msa indicators separately by race and education group they then regress the first stage msa effects on msa level labor and marriage market conditions and welfare benefits taking account of fixed effects and time trends specific to each msa better female labor markets worse female marriage markets worse male labor markets are found to lower marriage rates fr whites in all education groups results for these variables for blacks are sensitive to estimation technique although stronger results are obtained for an older age group 25 34 while welfare benefits have a negative effect in cross sectional analyses the association becomes considerably weaker in fixed effects specifications

accounting for changing prices the value relevance of historical cost price level and replacement cost accounting in mexico this paper investigates the value relevance of historical cost price level and replacement cost accounting using a sample of mexican firms from 1989 to 1995 it contributes to prior research by distinguishing between two distinct aspects of changing prices 1 the change in the general price level and 2 the change in the value of specific non monetary assets i select mexico to examine because it is unique in requiring and disclosing separately price level and replacement cost adjustments a sample of mexican firms also addresses a key reason cited for mixed results in previous assessments of the usefulness of price level and replacement cost accounting using united states data the effects of inflation are too weak to detect high rates of inflation in mexico ranging between 7 and 52 during the sample period mitigate that potential problem results indicate that replacement cost adjustments are relatively and incrementally relevant beyond historical cost and price level measures while price level adjustments are incrementally value relevant beyond historical measures

the demand for welfare generosity this paper estimates economic models of the determinants of state benefit levels in the aid to families with dependent children afdc program using 1969 1992 data these models have been extensively researched however the existing literature has produced an unacceptably wide range of estimates using alternative econometric procedures this paper systematically examines both the specification assumptions underlying previous analyses as well as several additional specification issues it is therefore able to replicate and reconcile estimates from previous studies and to provide updated consensus estimates of the demand for welfare generosity it finds that changes in the average level of income within states have small but statistically significant positive effects on benefits with the confidence bounds on the elasticity extending from 0 11 to 0 82 changes in the effective price of redistribution are found to have at most weak negative effects with elasticities in the range of 0 14 to 0 02 these results are used to evaluate the effects of block grant provisions in the recently enacted welfare reform legislation

federalizing benefits the introduction of supplemental security income and the size of the safety net abstract in 1974 supplemental security income ssi federalized cash welfare programs for the elderly blind and individuals with disabilities imposing a national minimum benefit and differentially raising payment levels in states that paid below its benefit floor we show that this increased disability participation but shrank non disability cash transfer programs for every four new ssi recipients three came from other welfare programs each dollar of per capita ssi income increased total per capita transfer income by just over 50 cents federalizing part of a patchwork safety net need not increase redistribution by as much as traditional models of fiscal federalism suggest

estimating the value of an in kind transfer the case of food stamps the value of one in kind transfer food stamps is estimated by evaluating the experience of an actual conversion from stamps to cash in puerto rico in 1982 the evidence indicates that the cashout of the stamps had no detectable influence on food expenditures the explanation partly lies in the distribution of expenditures for the stamps were inframarginal for most recipients however some evidence indicates that trafficking in stamps was widespread as well including indirect evidence from estimation of the piecewise linear constraint model copyright 1989 by the econometric society

discussion of revalued financial tangible and intangible assets association with share prices and non market based value estimates barth and clinch 1998 henceforth bc like easton eddey and harris 1993 henceforth eeh examine the relation between asset revaluation data in the financial statements of australian firms and various value metrics a principal difference between the two studies is the choice of value metrics and the formulation of the regression models relating the revaluation data and these metrics the value metrics used by bc are price per share and a measure of intrinsic value per share most of this discussion will focus on the possible effects of scale in regressions that have price or value per share as the dependent variable my main point is that statistical associations between price balance sheet data and income statement data in these regressions may be a spurious effect of scale other issues raised at the conference included the expected magnitudes of the coefficient estimates from the regression analyses management motives for asset revaluations econometric issues associated with pooling a time series and cross section of data and reasons for use of independent valuations versus valuations by company directors since these issues were addressed in eeh and in the discussion of eeh by bernard 1993 i pay less attention to them in this discussion

female headship feminization of poverty and welfare female headed households are at greater risk of slipping into poverty than male headed households indeed sex and marital status of the head of household are the most important determinants of a familys poverty status in the us divorce separation death of a husband and out of wedlock births can lead to female headship transfer payments especially the aid to families with dependent children program are blamed for contributing to increased marital instability and out of wedlock births the authors examined the role of welfare benefits in influencing female headship preliminary results using standard estimation procedures indicate that transfers do not significantly influence female headship standard estimation procedures are however erroneous because they ignore differences in propensities to establish mother only households therefore adjusting for differences in propensities to establish female headed households the level of welfare benefits is indeed an important factor in explaining the variation in the changes in the birth rates to unmarried women the use of a weighted measure suggests that welfare benefits by increasing female headship of women who otherwise have low propensities to be female heads have played a significant role in the feminization of poverty

earnings as an explanatory variable for returns in this paper we investigate whether the level of earnings divided by price at the beginning of the stock return period is relevant for evaluating earnings returns associations the primary model motivating this research relies on the idea that book value owners equity and market value are both stock variables indicating the wealth of the firm s equity holders the related flow variables after adjusting for dividends are respectively earnings divided by price at the beginning of the return period a p 1 and market returns it then follows that earnings divided by beginning of period price should be associated with stock returns although models based on a relation between market value and book value are used occasionally in the accounting research literature see for example landsman 1986 harris and ohlson 1987 and barth

a comparison of choice based multinomial and nested logit models the family structure and welfare use decisions of divorced or separated women home based work differs from other employment because the work site is the home itself this difference means that the fixed costs of working at home are less than the fixed costs of working on site and that home based workers may engage in joint market

welfare effects on female headship with area effects the existing literature on welfare effects on female headship in the united states shows significant positive correlations in cross section possibly increasing over time however when geographic or area effects are permitted in the estimation these correlations either disappear or reverse in sign the results have implications for the study of welfare effects in other countries including canada where benefits vary considerably across provinces and localities within them

city economies and microbusiness growth in developed countries microbusinesses those employing fewer than 10 people and home based businesses have been systematically overlooked in urban economic development thinking this article assesses the influence of city location and being run from the business owner s home on microbusiness growth based on empirical analysis of panel firm level data over a four year period during the uk s long boom the analysis reveals that cities provide benefits to microbusinesses for turnover growth but not for employment growth suggesting that the additional growth induced by cities for microbusinesses may be jobless growth however in the case of microbusinesses run from the owner s home cities facilitate growth into medium sized businesses with 50 staff in conclusion microbusinesses including those run from business owners homes are integral to the evolution and dynamics of urban economies and essential to understanding the nature of growth in cities agglomeration theory needs to say more about how urban agglomeration benefits firms of different types and sizes and small business and self employment research needs to say more about the influence of location in particular cities how businesses use both commercial and residential property are integral to the nature of growth in cities

ingredients in the early development of the u s biotechnology industry this paper explores the ingredients that stimulated the development of the biotechnology industry in the us and contrasts conditions with those in europe it examines relationships between established firms and new start ups the financing and managerial environment and the organizational environment whereby firms were able to set up networks of alliances its main findings are that 1 the funding of the medical science research base has been substantially more generous in the u s than europe it is the funding of the science base rather than of the biotechnology industry directly that has provided the foundations for start ups to be created out of the science base 2 it has been easier for u s academics to found start ups close to their research establishment and to retain their academic posts and status as well as be involved in a commercial enterprise in europe the scientific academic and commercial worlds have a wider divide 3 start ups have been concentrated in the therapeutics and agricultural fields with strong scientific research inputs into their commercialization in contrast to other sectors where downstream processing innovations have been more important which have been undertaken in house by the large incumbent companies 4 financing and managerial conditions have been significantly easier in the u s for start ups in terms of access to venture capital specialising in high technology ability to use the stock market to raise capital and access to people able to forge links between scientists and entrepreneurs and to introduce managerial expertise into new companies 5 there has been a greater facility in the u s than in europe for alliances to be formed between incumbent companies and indigenous u s start ups european start ups have not found similar backing from european incumbent companies

marital status and fertility in the united states welfare and labor market effects the incidence of marriage and the proportion of childbearing that occurs within marriage have decreased sharply in the united states in the last several decades this paper examines whether the probability that a woman is currently married and the number of children she has borne as reported in the 1980 u s census are related to two identifiable factors the variation in welfare programs across states specifically afdc and medicaid benefits and afdc up expenditures or the variation in the market wage opportunities available to women and to their potential husbands afdc and medicaid benefit levels are associated with fewer women being currently married medicaid benefits are related to lower fertility levels for both black and white women whereas afdc benefits in cash and food are associated with lower fertility among white women ages 15 24 those states that extend afdc benefits to families with unemployed parents in other words fathers in intact poor families do not have significantly more women married or higher fertility rates contrary to what might be expected from economic incentives men s market wages are associated with more frequent marriage and higher fertility whereas higher market wage opportunities for women have substantial effects in the opposite direction all of which are consistent with standard models of gender specialization and the demand for marriage and fertility

rational choice culture of poverty and the intergenerational transmission of welfare dependency it has now become evident that contrary to the expectations of the proponents of the great society a significant number of recipients of transfer benefits have welfare careers that last for many years prolonged reliance on welfare has generated a wide range of issues related to the process and patterns of welfare dependency and has raised questions about how best to reform welfare policy for example it has been suggested that welfare use is addictive creating a welfare culture that is transmitted across generations glicken 7 31 states that most recipients of afdc benefits are those people whose parents were recipients people who have been socialized into the welfare system as children duncan hill and hoffman 5 469 on the other hand investigate the patterns of welfare dependence among afdc recipients and conclude that t he stereotype of heavy welfare dependence being routinely passed from mother to child is contradicted other studies 2 24 have suggested that there are significant racial differences in the duration of time on welfare pointing to a race based dependency pattern rank 24 for example finds that black women remain on welfare for significantly longer periods than white women specifically he finds the median number of months on welfare to be 21 6 months for white women and 45 2 for black women 2 other studies have suggested that long time welfare use

alternative measures of profit margin an empirical study of the potential information content of current cost accounting the primary purpose of this study is to investigate the link between price changes in product markets and price changes in financial markets the nature of the association is central to evaluating the information content of current cost accounting measurements such as those promulgated in the sec s accounting series release no 190 asr 190 and the fasb s statement of financial accounting standards no 33 sfas 33 although both asr 190 and sfas 33 state that financial statements based only on historical costs do not provide investors with sufficient information to assess the underlying economics of firms in periods of rapidly changing prices empirical evidence suggests there was no apparent reaction to the initial replacement cost releases mandated by asr 190 e g see beaver christie and griffin 1980 1 this study offers one explanation for the lack of an observed market

the incremental information content of replacement cost earnings abstract the study explores the incremental explanatory power of replacement cost earnings variables derived from asr 190 data with respect to explaining cross sectional differences in security returns as such the study is a natural extension of previous research including analyses of the effect of security returns of asr 190 data at the time of disclosure investigations of cross sectional relationships between security returns and historical cost earnings and studies of multiple signals the basic finding is that pre holding gain net income provides no incremental explanatory powerm given knowledge of historical cost earnings however the converse does not hold taken together the findings are consistent with the contention that pre holding gain net income is a garbled version of historical cost earnings the basic finding is robust under several extensions of the initial research design the research design incorporates a two stage approach which permits a determination of the incremental explanatory power of collinear variables the findings are in contrast to those of a previous study by easman et al 1979 the nature of the difference in research design inducing the difference is identified potential reasons for the difference in findings are provided

partners forever an empirical study of relational ties in two small firm clusters many researchers take as axiomatic the proposition that economic action in clusters is embedded in dense durable and trust based social networks it is suggested here that the bias towards high trust enduring relations obscures the competitive dynamics of networks even where co operation can be identified drawing attention to the competitive motives underlying the construction of social networks an investigation is made into the duration and brokering of dyadic relations in business owners advice networks the analysis of 668 dyadic ties in a population of 113 small business owners in two textile and clothing clusters in germany reveals considerable variation in the duration of social relations and the likelihood that they were formed through third party brokers many of whom were direct competitors creating more ephemeral links the findings suggest that marketless conceptions of social networks in clusters need to be balanced with a stronger concern for the role of competition in the social embe

embryonic knowledge based clusters and cities the case of biotechnology in scotland the cluster concept has been promoted in recent years as a panacea for economic development both locally and nationally one source of theoretical and empirical ambiguity in the concept is related to the spatial processes underpinning cluster development and to the relationship between cities and clusters in particular this paper examines the case of the biotechnology cluster in scottish cities with particular reference to glasgow and edinburgh the promotion of a biotechnology cluster has become a priority for scotland s economic development strategy because of its potential role in the knowledge driven economy the paper examines the major locational dynamics affecting biotechnology in scotland and interrogates the balance between the major forces driving the development of biotechnology firms in their urban location it concludes that the importance of cities to cluster growth lies mainly in the size and diversity of their labour markets in the presence of key research institutions and public sect

employment opportunities of young men and family formation major shifts in family patterns have limited progress toward reducing poverty and narrowing black white income differences much of the recent rise in female headship results from the rising number of never married mothers despite a decline in the proportion of unmarried young women having babies the drop in marriage rate has been so great that a rising proportion of children are under the care of never married mothers the absence of a parent dramatically increases current poverty of children and as sara mclanahan 1988 shows growing up in a poor family and in a mother headed family holding constant for income increases the chances that a child will become poor as an adult a long literature links the creation of mother headed families with the inadequate financial resources of men in 1965 the moynihan report attributed the then high rates of marital disruption among black families to the joblessness of black men but warned that family dissolution might have reached a self perpetuating stage unrelated to employment opportunities did the dramatic increases in one parent families after 1965 reflect such a new self generating pattern or were the job market problems of men the primary cause of the continuing decline in stable intact american families the most forceful recent proponent of the male job opportunity hypothesis hereafter mjo is sociologist william j wilson wilson 1987 argues that the declining number of employed black men relative to black women best explains the increasing proportions of black female headed families clifford johnson and andrew sum 1987 contend that declining real earnings of all young men was a major cause of their declining marriage rates this paper examines the mjo hypothesis with respect to young men and family formation marriage and becoming parents i begin by viewing the mjo hypothesis from the perspective of the economics of the family i then consider evidence from empirical studies of the mjo hypothesis the conclusion notes future policy and research direc

the effect of the u s welfare system on marital status abstract an issue of long standing importance in the u s welfare system has been its lack of neutrality with respect to family composition which generally provides payments only to female headed families that is families with no able bodied male present using data from 1969 to 1985 to examine the issue this study finds that 1 the simple cross sectional correlations between marital status and welfare benefits are almost always in the expected direction but are generally weak in significance 2 that the magnitude and significance of the correlations have nevertheless grown over time and 3 that the correlations for men are no weaker and usually stronger especially for blacks than those for women

have financial statements lost their relevance the authors explore the concern that financial statements no longer have the same relevance to investors that they had in the past they test for value relevance by measuring the total return that could have been earned from prior knowledge of financial statement information and by examining the explanatory power of accounting information on market values and annual market adjusted returns both analyses are applied to a broad sample of exchange listed and nasdaq firms for the 1952 94 period the authors find mixed evidence on value relevance of financial statement reporting during the test period

will extending medicaid to two parent families encourage marriage several welfare programs in the united states restrict eligibility to single parent families this paper asks whether eliminating this restriction for medicaid encourages marriage i identify medicaid s effect through a series of health insurance reforms that were passed in the 1980s and 1990s targeting young children these reforms were associated with an increase in the probability of marriage of 1 7 percentage points while the expansions offered some incentives to become married they also created other incentives to become divorced known as the independence effect after controlling for the outflows from marriage due to the independence effect the estimated effect increases by 10 percent

valuation and accounting for inflation and foreign exchange inflation and foreign exchange raise new issues with respect to accounting representations of equity value for example inflation creates an earnings illusion as an artifact of the mismatching of expenses based on allocations of historical costs with current revenues in determining earnings this mismatching distorts mappings of aggregate earnings and book values into equity value such that value relevant information is lost in this article we consider the consequences of inflation and foreign exchange accounting policies including those contained in accounting standards on the value relevance of bottom line accounting numbers policies are identified that achieve efficient accounting in the sense that aggregate comprehensive earnings and book values are sufficient for an accounting representation of equity value the linear relations that emerge provide predictions on capitalization coefficients that help explain results of empirical inquiries as well our analysis provides a theoretical foundation for policies contained in accounting standards that contributes to the resolution of controversies such as that concerning foreign exchange accounting

welfare programs in the rent seeking society over the past fifteen years the interest group theory of government behavior has shown itself to be an empirically rich and powerful explanatory tool applications have included environmental regulation 14 17 federal trucking regulation 15 the output of state legislatures 12 and numerous other government programs and activities but one important subset of government programs has been consistently neglected in the literature meanstested transfer programs as a group the poor are not well organized for political lobbying they are dispersed and consequently face high organization costs further as a potential lobbying group the poor face potentially overwhelming free rider problems i e all of the poor stand to benefit from poverty programs that some subset of the poor achieve via lobbying for this reason the interest group theory of government seems to offer meagre explanatory power in the case of poverty programs many who otherwise typically interpret governmental activity from the perspective of rent seeking analysis make an exception when it comes to welfare programs and argue that here ideology mostly egalitarian ideology has for some unexplained reason dominated the political process there is sometimes a reference to the imperialism of the welfare bureaucracy which benefits indirectly from any expansion of the poverty program system and admittedly this seems to be a plausible partial explanation for the rapid recent growth of welfare spending finally tullock 19 has adopted a radical reinterpretation arguing that the welfare state does not really transfer net wealth to the poor at all but actually represents a thinly disguised system of net transfers to better organized middle class interest groups the tullock hypothesis is designed mainly to explain major patterns of government transfer spending it represents an attempt to reinterpret the net effect of transfer spending on the wealth positions of different income groups and does not attempt to explain specific welfare programs from an interest group perspective while this approach has merit an interest group analysis of specific welfare programs must concern itself with the functional consequences of particular programs and the interest groups which benefit from them both directly and indirectly but such an analysis should not necessarily presuppose that the poor themselves are the most important politically relevant interest group involved in the lobbying process or even that they play a major role very substantial transfers to the poor or to any other recipient group may ultimately be the result of interest group pressure in the

the estimation of prewar gross national product methodology and new evidence the paper develops new methodology for the estimation of prewar gnp taps previously unused data sources and develops new estimates for the periods 1869 1908 and 1869 1928 primary among the new data sources are direct measures of output in the transportation communications and construction sectors and estimates of the consumer price index new measures of real gnp nominal gnp and the gnp deflator are developed the new estimates of real gnp are as volatile on average over the business cycle as the traditional kuznets kendrick series but dampen the amplitude of some cycles while raising the amplitude of others the new estimates of the gnp deflator are distinctly less volatile than the traditional series and in fact no more volatile than those in the postwar period