Two essays on individual preferences toward means-tested income transfers.

This thesis examines public preferences toward the structure of means-tested income transfer programs using nationally representative survey data on individuals' expressed preferences revealed through experimental methods and measures of their economic and demographic characteristics. In the first essay I relate the cash public assistance awards of respondents to characteristics of hypothetical recipient families to examine benefit targeting and adequacy. Measured demographic and financial dimensions indicating need and "deservingness" often have large effects on transfers. Most important for the young recipients are the number of young children and the labor force status of the mother or father. For the elderly recipients, large asset holdings in the form of savings or home equity and the presence of financially well-off children are determinants of transfers. Preferred income guarantees are more generous than officially defined poverty thresholds for most families by type and size, except for the largest families. Income guarantees and benefit reduction rates are quite high for the elderly. Guarantees and benefit reduction rates for young recipients are lower relative to the elderly, but still appear higher than those advocated by commentators who stress the importance of low guarantees and benefit reduction rates to encourage labor supply for working age recipients. In the second essay I relate cash transfers to characteristics of respondents to examine the insurance motive of dem and s for income transfers. I construct and analyze models in which the individual's economic problem is to choose the benefits he would like to see the government transfer to low-income households given he views such cash assistance as an insurance policy in the event his own family income falls to some low level making him eligible for welfare payments. Respondent income guarantees are then related to calculated measures of expected benefits and costs likely received and paid by respondents. Responses of the nonelderly toward the young recipients were consistent with the self-insurance motive: income guarantees increased with the ratio of expected benefits to expected costs. However, there was no evidence supportive of self-interest as an explanation of transfers to elderly woman recipients by the elderly and near-elderly.PhDLabor economicsPublic policyUniversity of Michiganhttp://deepblue.lib.umich.edu/bitstream/2027.42/161962/1/8821637.pd