Public Transfers: Safety Net or Inducement into Poverty?

A number of scholars contend that recent increases in economic dependency and poverty htave been stimulated by "overly generous" public assistance. Cash and noncash transfers and the eligibility guidelines that govern their distribution purportedly discourage employment antd encourage the rise of female-headed families. These "culture-of-poverty" arguments and alternative hypotheses are examined through time series analyses. The restults are mixed. On the one hand, the combined package of cash and noncash transfers is modestly related to the rise of female headship and economic dependency and more strongly related to declines in the labor force participation of young nonwhite males. On tle othter 1nhand, cash transfers reduce poverty. Though the current welare system is fraughlt with a nttumber of shortcomings, we find that culture-of-poverty explanations of post-1970 increases in econtomic dependency and poverty are not very powerful. A more comprehensive theory is called for. Such a theory needs to explain how structural changes in our econtomy are affecting economic opportunity. It has long been argued that poverty is better understood as a cultural rather than an economic problem (see Coser's [19651 discussion of Simmel [1908] or Harrington [1984:144]). Banfield (1968) and Gilder (1980) can fairly be characterized as the cornerstones of recent contributions to this line of reasoning. According to Gilder (1980:12), "real poverty is less a state of income than a state of mind." That is, the seed of poverty is a fatalistic mind-set wherein people give up on themselves as providers for their families. The availability of transfers that approach or exceed the value of earnings that many individuals are able to secure in the labor market reinforces such fatalism. The poor person becomes economically insignificant, so he or she does not have an important role in providing for themselves or their family. In this way poverty is sustained by the unilateral transfer of wealth from the state to the poor. This stigmatizes the poor in the eyes of the public. More importantly, the poor come to accept the stigma and view themselves as best suited to a life of welfare-dependency. They leam to view the labor market as a hostile environment in which they are more likely to fail than succeed. Welfare softens the hardship of not achieving economic self-sufficiency and thereby reinforces the motivation to minimize contact with the labor market. In addition, poor women with children can be denied certain benefits if they have an employed spouse. Thus, welfare discourages two-parent families and labor force participation among the poor. Consequently, economic dependency, or latent *1 would like to thank Elwood Carlson, Beth Ghiloni, Darla Ladkau, Bruce Mayhew, Miller McPherson, Patrick Nolan, Ken Shin, John Skvoretz, Shelley Smith, Lynn Smith-Lovin, Lala Steelman, Robert Stewart, Donald Tomaskovic-Devey, and the anonymous reviewers of this article for their criticisms and assistance. Address correspondence to the author, Department of Sociology, University of South Carolina, Columbia, SC 29208. 0 The University of North Carolina Press Social Forces, March 1990, 68(3):813-834 This content downloaded from 207.46.13.111 on Mon, 08 Aug 2016 04:34:30 UTC All use subject to http://about.jstor.org/terms 814 / Social Forces 68:3, March 1990 poxverty to use Murray's (1984) term, and the official rate of poverty are pushed ulp.? Many scholars reject these arguments as ideologically inspired attempts to justify a "hands off" governmental policy toward the poor (e.g., Harrington 1984; Piven & Cloward 1982). Indeed, much of the research literature fails to support the contention that welfare has a largely pernicious impact on the poor. For instance, the review article by Danziger, Haveman, and Plotnick (1981) and recent collections by Danziger and Weinberg (1986) and Tomaskovic-Devey (1988a) point to a wide array of evidence that suggests that public transfers, despite their many shortcomings, improve the quality of life of the poor. But the culture-of-poverty perspective is not without empirical support. Murray (1984) compiles a great deal of descriptive data that lend themselves to a culture-of-poverty interpretation. Numerous analyses of the negative income tax experiment also suggest the relevance of the culture-of-poverty critique of the welfare state (e.g., Robins 1985). In this article, we propose a model formulated from contemporary contributions to the culture-of-poverty school and alternative arguments put forth by a number of researchers. The model is examined empirically in an effort to discern the merits of conflicting positions in the welfare/poverty debate. Determinants of Family Structure, Work-effort, Economic Dependency, and