Policy Research

The Great Recession and social welfare spending in the American States

J.A.G. Ewalta, E.T. Jennings Jr.

Summary

The article focuses on what affects retrenchment and expansion of social welfare programs, specifically focusing on the Great Recession. The authors concluded that there are three main categories of factors that affect the policy: partisan politics, socio-economic factors, and economic conditions. While socio-economic factors such as population under 18, percent with a high school degree, and union membership had some effect the overwhelming evidence suggests that the economic and political influences are the main cause of change in policy. The article points out that there was an immense political reaction to the Recovery Act, Patient Protection and Affordable Care Act of 2010 which led to significant Republican gains in the state legislatures in the 2010 elections. In those states, the researchers saw significant retrenchment of the programs coinciding with more conservative spending policy. The article also shows that in regards to economic development, while you do see expansion of Medicaid and unemployment resources when incomes are lower and unemployment is up, this is an automatic reaction that is put into effect without needing policy change. The real source of policy change, in regards to welfare from an economic standpoint, comes from a state's or the country's economic development as a whole. Only when the economy overall is on an upward trend does one see more expansion in programs through policy; similarly, overall economic regression leads to more stringent and conservative policies in regards to welfare spending.

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Policy Implications

Republican politicians are much more likely to be in favor of retrenchment of social welfare programs, whereas Democratic legislatures would be more amendable to expansion. When economic development is on an upward trend more Democrats tend to be elected therefore increasing the probability that these programs will be expanded, and vice-versa with economic regression and Republican ideologies.