State-level social safety nets for families coping with job loss

ABSTRACT

Critics of the modern American welfare state allege that safety net benefits discourage work by providing sufficient resources to replace earned income. Yet, research in social policy has long depicted the US safety net as parsimonious and inadequate relative to its European counterparts, even when considering benefits from programs that reward favorable work histories. Other theories predict variability across states and regional clustering even amid low overall spending. Moreover, the recent COVID-19 outbreak has exposed the insufficiency and lack of resilience of the major US safety nets in the face of unprecedented unemployment. This study examines the benefit expenditures on three safety net programs available to American families with recently unemployed breadwinners—Temporary Assistance for Needy Families, Supplemental Nutrition Assistance Program, and Unemployment Insurance—as a proportion of median annual income for a given state-year between 1997 and 2017. We examine the overall spending as well as variability and clustering across states. We find that the average benefit expenditure comprises only 42% of median income, and while there is substantial variability around this average, only one state is above 78%. We also find that spending levels appear to be regionally clustered. We conclude that safety nets for the recently unemployed and their families are weak relative to earned income and that the extent of this weakness varies by state, with some regional patterning. © 2021 Policy Studies Organization