Spending on Social Welfare Programs
in Rich and Poor States

Final Report

July 2004

Prepared for:
U.S. Department of Health and Human Services
Assistant Secretary for Planning and Evaluation

Prepared by:
The Lewin Group
and its subcontractor
The Nelson A. Rockefeller Institute of Government

Contract No.: 282-98-0016; Task Order 34

This report is available on the Internet at:
http://aspe.hhs.gov/hsp/social-welfare-spending04

Printed Copy (in PDF format)

How to obtain a printed copy

Contents

Executive Summary

Summary

Chapters

1. Introduction
   1. Policy Context
   2. Research Questions
   3. Review of Related Iterature
      1. Trends in Spending on Social Welfare Programs
      2. Measuring Fiscal Capacity
      3. Determinants of Social Welfare Spending
2. Approach
   1. Overview
   2. Fifty-State Analysis
      1. Overview of Analysis
      2. Overview of Data Sources and How the Data Were Used
   3. Site Visits
      1. Purpose
      2. Approach
      3. Selection of Poor States
   4. Integrated Analysis Between Econometric Model and Site Visit Data
3. Findings and Results
   1. Historical And Cross-State Perspective: Trends And Patterns
      1. State Fiscal Capacity and Average Spending on Social Welfare
      2. Changes Over Time
   2. Overall Results Of Econometric Analysis
      1. Results for All States
      2. Results by Quartile
      3. Cyclical Models
      4. State Effects: Long-Run Differences in State Spending on Social Welfare
      5. Conclusions from Econometric Analysis
4. A Closer Look at Poor States
   1. Differences Among the Six Poor States Selected for Case Studies
   2. Recent State Spending Patterns and State Fiscal Crises
      1. The State Fiscal Crisis and Low Fiscal Capacity States
      2. Recent Changes in Spending on Health Care: Medicaid
      3. Recent Changes in Spending: TANF Benefits
      4. Changes in Non-health Social Services: TANF "Non-assistance," Child Care, Child Welfare, and Others
      5. Influences on Spending and Explanations of State Differences
   3. Medicaid
   4. Cash Assistance
   5. Non-Health Social Services
   6. Conclusions
5. Final Observations and Conclusions

References

Appendix A (Only available in PDF format. Contact ASPE for a printed copy or for accessibility assistance.)

Appendix B

Tables

• Exhibit II-1. State and Local Government Spending by Detailed Item, FY 2000 (in billions)
• Exhibit III-1. States by Fiscal Capacity Quartile
• Exhibit III-10. Regression Coefficient Estimates for All States
• Exhibit III-11. Regression Coefficient Estimates
• Exhibit III-12. Coefficient Estimates Showing Impact of State Unemployment Rate Without Year Dummies
• Exhibit III-13. Overall State Effects for Regression Model
• Exhibit III-15. Correlations Between State Effects for Different Types of Social Welfare Spending
• Exhibit IV-1. State Effects for Six States Selected for Site Visits, Based on Estimates from Spending Data, 1977-2000
• Exhibit IV-3. Changes in State Tax Revenues, 1998-2003, Standardized Such That Revenues in SFY 2001 = 100
• Exhibit IV-10. Indicators of Health Industry Size and Reliance on Medicaid in Six Poor States
• Exhibit IV-12. Agency Responsibilities for Major Program Areas in the Six Poor States

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Last updated:  10/14/04