The Effects of Negative Income Tax Programs on Marital Dissolution

Abstract

JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org.. University of Wisconsin Press andThe Board of Regents of the University of Wisconsin System are collaborating with JSTOR to digitize, preserve and extend access to The Journal of Human Resources. ABSTRACTWe review the reasons for expecting a negative income tax (NIT) to affect marital dissolution rates and present a stochastic model of marital dissolution. The analysis reveals that the experimental NIT programs increased the marital dissolution rates for blacks and whites but not Chicanos. The differences in the magnitude of the responses by NIT guarantee level suggest that there are nonpecuniary differences between the experimental programs and existing income-support programs. We compare the Seattle and Denver Income Maintenance Experiments findings with the findings from the other income maintenance experiments and discuss implications for welfare reform. I INTRODUCTIONAnalyses of proposals to replace the current welfare system with a negative income tax (NIT) usually focus on two issues: the effect of the proposed system on incentives to work, and the effect on incentives to marry and stay married. It has been widely agreed that changes in welfare systems alter levels of work effort and that such changes constitute a major component Groeneveld is a sociologist with SRI International. Hannan and Tuma are members of the

Intra-household Behavioral Responses to Cash Transfer Programs. Evidence from a Regression Discontinuity Design

“…This finding contrasts with the existent evidence from other CCT programs, including Mexico's PROGRESA which, although small in magnitude, induced a significant increase in marital dissolution among eligible couples (Bobonis, 2011). The results in this section also contrast with the findings for developed countries, like the United States and United Kingdom, which suggest that families react to the incentives of welfare programs by making decisions about their marriages (Groeneveld et al, 1980;Bitler et al, 2004;Francesconi et al, 2009). …”

The Impact of Conditional Cash Transfers on Marriage and Divorce

“…For instance, Groeneveld, Tuma, and Hannan (1980) studied the consequences on marital stability of the Seattle and Denver negative income tax experiment programs of the 1970s-the Seattle-Denver Income Maintenance Experiments (SIME/DIME)-which randomly assigned low-income households to receive an income guarantee and income tax reimbursement as a substitute for the traditional welfare (Assistance to Families with Dependent Children, or AFDC) program. They found, contrary to initial expectations, that the experimentally induced reform induced a significant increase in couples' likelihood of marital dissolution.…”

The effects of a Minnesota Welfare Reform Program on marital stability six years later

“…One of the striking findings of the initial MFIP evaluation was that among two-parent families who were receiving welfare at the outset of the study and were part of a small follow-up survey sample, families in the MFIP group were 19.1 percentage points more likely than families in the AFDC group to report being married and living with a spouse at the three-year follow-up point (Gennetian & Miller forthcoming). This finding was especially surprising in their contrast to the most notable marriage effects from social policy interventions -increases in marital dissolution that occurred in the Negative Income Tax experiments of the 1970's (Cain & Wissoker 1990;Groeneveld et al 1980;Hannan et al 1977).…”