“Those People”

February 26, 2011
Posted by Jay Livingston

The previous post here discussed Daniel Hamermesh’s observation that the relatively stingy welfare policies of the US stem from two aspects of American culture – optimism and a lack of concern about inequality. But why are Americans so sanguine about inequality when over 40 million of their fellow Americans are so poor that, according to the official definition of poverty, they cannot afford to adequately feed their families?

Maybe it’s because Americans do not consider the poor to be their “fellow Americans,” as part of the same community. Claude Fischer discusses a more general version of this world-view in the central chapter of his recent (and excellent) book Made in America. He calls it “voluntarism” – the idea that the only legitimate groups are the ones that people voluntarily join. While people have strong obligations to others in those groups, they have little or no obligations towards people not in those groups. Under the principle of voluntarism, if I haven’t voluntarily joined a group that provides assistance to poor people, I have no obligations to them, and for the government to use my tax dollars to do so is tantamount to robbery.

The voluntarism ideology may exist in varying degrees in many other societies. Still, some countries have more generous welfare than others, and within the US, some states have more generous policies than others. These differences may reflect the social distance that the majority feel from the poor. If we perceive the poor as similar to us, as part of our community, we will be more generous. If the poor are a different type of person, we will not want our taxpayer dollars going to “those people.”

What might be influencing those perceptions of similarity or difference?

Ten years ago, economists Alberto Alesina, Edward Glaeser, and Bruce Sacerdote put the question bluntly in the title of their paper, “Why Doesn't the United States Have a European-Style Welfare State?” (A pdf of the paper is here.) Is there something else going on besides voluntarism, optimism, and concern about inequality? Their answer was yes, and that something else is race.

They compared measures of welfare spending among countries and within the US among states. In both cases, racial homogeneity was a strong predictor of welfare generosity. Here is a scatterplot of countries.

(Click on the chart for a larger view that will allow you to read the country names.)

The less homogenous the population of the country, the less generous are its welfare policies.

In the US, as anybody who has been here for more than about five minutes knows, the welfare/poverty issue is not just about income and nutrition and inequality. It’s about race. So Alesina, et. al. plotted welfare against percent African American in the fifty states.

The greater a state’s black population, the stingier are its welfare benefits
There is a strong negative relationship between the generosity of a state’s program and the share of the state’s population that is black: the raw correlation is 49 percent.
True, state revenue is also a factor – the states with lower welfare and more blacks are also states that are poorer, and those lower state budgets may affect welfare payments. But it’s not just the lack of funds.
When we regress the maximum AFDC payment on both state median income and the share of the state population that is black, our primary result is still significant. The estimated regression is (standard errors are in parentheses)

maximum AFDC payment = –149 (72)– 692* (131) percent black + 0.017* (0.002) median income N = 50, R2 = 0.71.
As the authors summarize this aspect of their study:

Americans think of the poor as members of some different group than themselves, while Europeans think of the poor as members of their group.


Anonymous said...

I find the general thesis pretty convincing, but any measure of ethnic homogeneity that treats Belgium as homogenous has some pretty big flaws. Of course, this could be the exception that proves the rule as Belgium's linguistic/ethnic diversity is making the welfare state and industrial policy much less popular.

Jay Livingston said...

Most of what little I know about Belgium comes from a couple of Jacques Brel songs. But yes, you’d think the French/Flemish split would put it much further out on the X-axis. The additional information on this measure in the appendix is ambiguous. It refers to “reports about the racial, ethnic, linguistic, and religious composition of the population. The index is computed as the probability of randomly drawing out of the country’s population two individuals that do not belong to the same racial group.” [my italics]. It would seem although they mention linguistic-ethnic factors, what they were looking at is race. Belgium is mostly white so it’s homogenous. The same might apply to Switzerland – on language, diverse; on race, not so much.