Social Policies in an Age of Austerity

Social Policies in an Age of Austerity

A Comparative Analysis of the US and Korea

KDI/EWC series on Economic Policy

Edited by John Karl Scholz, Hyungypo Moon and Sang-Hyup Lee

Social Policies in an Age of Austerity is the first major publication on the topic, with a particular interest in the United States and the Republic of Korea. The authors of the ten chapters in this book review recent developments in social policies in OECD countries, with a focus on achieving greater effectiveness in public spending on social programs, under increasingly tight national budgets. The contributions cover social and fiscal policy and issues in labor market policy, in addition to the effectiveness of social insurance, education and antipoverty policy.

Chapter 9: Recent developments in antipoverty policies in the United States

James P. Ziliak

Subjects: asian studies, asian economics, asian social policy, economics and finance, asian economics, social policy and sociology, comparative social policy, economics of social policy


James Ziliak surveys recent developments in antipoverty policies in the United States and evaluates their effectiveness. He begins with an overview of major programs and substantial growth in the social safety net and how they affect poverty and its correlates. Raising the question of what accounts for this spending boom in the social safety net, the author finds that the answer varies widely across programs. Typically it can be accounted for by changing demographics, business cycles, policy implementation and, in some cases, policy reform. Participation in the food-stamps program, for example, moves counter-cyclically with the business cycle, and thus the increased expenditure since 1999 resulted in part from the weak economy. The Earned Income Tax Credit is a refundable tax credit available to low-income families and individuals, but only those in the labor market. As a consequence of the changing labor force composition and policy, expenditures on this tax credit make it the largest cash assistance program to low-income working persons. By contrast, increased spending on disability insurance took place not through policy reform but as a result of changes in the implementation of program rules, combined with an increase in the proportion of the population applying for benefits.

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