Sunday, November 27, 2011

Income Security Became More Generous

Professor Krugman is reiterating his claim that "income security" programs grew solely because of the recession. He is incorrect: only a small fraction of that growth is due to the recession, the rest because of legislation making the programs more generous.

Inflation-adjusted government spending on unemployment insurance (UI) and food stamps (SNAP) has more than doubled on a per capita basis, and most of this growth is due to changes in eligibility rules, and increases in payments per eligible person, rather than increases in the number of people who would have been eligible under pre-recession program rules.

By 2009, the UI program was absorbing a larger fraction of earnings lost due to unemployment than it did in 2007, with the majority of its expenditure made pursuant to federal expansions since 2007. Indeed, among persons aged 25 and over, it was more common to experience unemployment without government help before the recession than it was since 2007.

See also
How Unemployment Benefits Became Twice as Generous
UI Takeup Increases Sharply during the Recession
The Sharp Increase in Food Stamp Spending
Millions Caught by the Social Safety Net

Perhaps legislation changes were the "right thing to do" given the recession. But Professor Krugman is pretending that the legislation changes did not occur.

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