On Comparing Income Maintenance Alternatives

Abstract

This paper seeks to clarify choices in income maintenance, not to advocate a particular policy alternative. It makes explicit the trade-offs between competing objectives that are required of policymakers, but often obscured by polemics about the advantages or disadvantages of particular transfer mechanisms (e.g., negative income taxes, child allowances, demogrants). The paper first presents a critique of contemporary public debate on welfare reform and antipoverty cash transfer schemes. The next section distinguishes among the goals of reforming the present system of public assistance, substantially reducing American poverty, and making both the tax system and the social distribution of income more equitable. There follows a discussion of six criteria for evaluating and comparing alternative measures to one or another of these goals. The paper concludes with an application of the evaluative scheme to the welfare reform alternatives considered by the Nixon Administration in the spring of 1969.