Rethinking the Welfare State: The prospects for ... - e-Library

Food stamps 49
as assistance would be provided to successful perpetrators of fraud. Unfortunately, both
options lead to a diversion of resources away from those who need them. 30
A somewhat related concern is the unrestricted purchasing power that the recipients
gain with cash transfers. It is unreasonable to think that most individuals will forego food
altogether and spend the supplemental income on other commodities. It is, however,
reasonable to raise the concern that individuals may not devote a sufficient amount of the
income to food—a particularly plausible outcome, for instance, in the case of recipients
suffering from extreme drug addiction. 31 This problem is most dramatic in the context of
households where the agency concerns with respect to children referred to earlier must be
considered. The head of the household is presented with a monthly cash transfer. It is
completely up to her discretion as to how much of the income will be devoted to food
purchases for her children. If the parent chooses to spend the transfer on goods or
services in such a way as to detract from the adequate supply of household food, it is not
merely she who may suffer but her children as well. It is this very susceptibility to fraud
and abuse that makes cash transfers politically problematic.
At the same time, however, the very parties being considered in the above situation—
female heads of households—are also among the most impoverished in American
society. Female heads have lower family income, on average, than women as a whole and
than married women. 32 Indeed, more than 40 percent of female heads of families with
children under 18 live below the poverty line. 33 Moffitt concludes that “future trends [in
the use of benefits] are more likely to be driven by growth in female-headedness [of
families] than by […] benefit levels.” In other words, constraining the use of benefits by
needy families, particularly those headed by women, is unlikely to increase the
participation of female heads in the active labour force or reduce dependency on benefits.
“It follows,” Moffitt concludes, “that research on the types of welfare reform best suited
to reducing poverty should concentrate […] more on the determinants of femaleheadedness.”
34 This suggests that the policing of fraud and “abuse” of cash transfers is
likely to be less effective than programs which address the primary causes of poverty,
including most notably the feminization of poor families.
Food stamps
Although somewhat of a compromise between the two schemes, the nature of the food
stamp program is itself unique. It cannot be referred to as an in-kind transfer because the
recipient does not prima facie receive food commodities from the state. However, food
stamps cannot be characterized as cash transfers either because, by their very nature,
vouchers imply a limitation on use. Essentially, food stamps make the recipient the
decision-maker but place constraints on the exercise of her choice.
In comparing food stamps with direct in-kind provision, there are clear advantages.
First, in terms of cost, food stamps closely resemble the cash transfer regime in
eliminating the daily operating costs associated with direct in-kind transfers. Second, they
avoid the stigma associated with food assistance provided through government
commodity distribution. Third, stamps do not generate the functional problems created by
direct in-kind transfers. Although received on a monthly basis, they can be redeemed at
any time. This affords recipients greater ability to allocate consumption over time.