Myth: Welfare traps people in poverty.
Fact: Welfare helps people get back on their feet more quickly.
Summary
Statistics show that nations that pay the most generous welfare
benefits have the least persistent poverty and the greatest escape
rates from poverty.
Argument
No study has ever proven that welfare traps people in poverty.
However, studies do exist that show that nations with more generous
welfare benefits allow their poor greater escape rates from poverty.
Here's a chart showing how much various rich countries pay in
social transfers:
Social security and other transfers as a percentage of the Gross
Domestic Product (1990) (1)
Country % of GDP
--------------------------
France 23.5
Sweden 21.2
West Germany 19.3
Italy 18.9
United Kingdom 13.7
Canada 12.8
United States 11.5
Japan 11.2
And the following chart shows how much the poor in various countries
escape their poverty:
Poverty rates (1994) (2)
Single-year Persistent Poverty
poverty poverty escape
Country rate rate rate
-----------------------------------------------------
Finland 3% n/a 47%
Sweden 3 n/a 45
France (Lorraine) 4 2% 32
Luxembourg 4 1 29
West Germany 8 2 24
Canada 17 12 23
Netherlands 3 1 23
Ireland 11 n/a 22
United States 20 14 22
U.S. blacks 49 42 15
n/a = not available.
The general correlation is clear: those nations which help their
poor the most have the least persistent poor. For those who blame
the United States' problems on blacks, the correlation remains
even after eliminating the United States completely.
Return to Overview
Endnotes:
1. Howard Oxley and John Martin, "Controlling Government
Spending and Deficits: Trends in the 1980s and Prospects for the
1990s," OECD Economic Studies 17 (Autumn, 1991), pp.
158-60. Social Security and other transfers include government
outlays on public pensions, health insurance and other income
maintenance.
2. Greg J. Duncan of the University of Michigan Institute for
Social Research, 1994.