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Welfare Incentives August 2, 2006

Posted by federalist in Economic Policy.
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The New York Times had a story about skilled, middle-aged men who choose not to work.  Dividends of the feminist revolution?  After all, if women can break into the workforce and assume any traditionally male role, doesn’t it follow that husbands can choose the role of a middle-aged housewife?  Apparently not:

Nearly 60 percent are divorced, separated, widowed or never married, up from 50 percent a decade earlier, the Census Bureau reports. Sometimes women who are working throw out men who are not, says Kathryn Edin, a sociologist at the University of Pennsylvania. In any case, without a household to support, there is less pressure to work, and for men who fall behind on support payments, an incentive exists to work off the books — hiding employment — so that wages cannot be garnisheed. 

Other than deadbeat dads, it looks like the most likely cause of voluntarily unemployed men is our perverse government welfare incentives:

Mr. Priga supports himself by borrowing against the rising value of his Los Angeles home. Other men fall back on wives or family members.

But the fastest growing source of help is a patchwork system of government support, the main one being federal disability insurance, which is financed by Social Security payroll taxes. The disability stipends range up to $1,000 a month and, after the first two years, Medicare kicks in, giving access to health insurance that for many missing men no longer comes with the low-wage jobs available to them.

No federal entitlement program is growing as quickly, with more than 6.5 million men and women now receiving monthly disability payments, up from 3 million in 1990. About 25 percent of the missing men are collecting this insurance.

The ailments that qualify them are usually real, like back pain, heart trouble or mental illness. But in some cases, the illnesses are not so serious that they would prevent people from working if a well-paying job with benefits were an option.

The disability program, in turn, is an obstacle to working again. Taking a job holds the risk of demonstrating that one can earn a living and is thus no longer entitled to the monthly payments. But staying out of work has consequences. Skills deteriorate, along with the desire for a paying job and the habits that it requires.

“The longer you stay on disability benefits,” said Martin H. Gerry, deputy commissioner for disability and income security at the Social Security Administration, “the longer you’re out of the work force, the less likely you are to go back to work.”

Further proof that these men are choosing to stay out of work in a manner consistent with maximizing their claim on welfare:

The great majority of the missing men are out of the work force for months or years at a time rather than drifting in and out of jobs.

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