Assessing Regional Effects of Income Maintenance Programs: A Guide to Policy Analysis

This paper is concerned with research issues that must be faced in assessing the potential subnational effects of proposed income maintenance programs, a job that has barely just begun. The paper is divided into discussions of four major tasks that must be performed by pohcy analysts if they are to help policymakers evaluate these effects. The first of these tasks is simply to list program provisions that may have important subnational effects, either directly or by changing the behavioral patterns of participating families. Examples of spheres of behavior that income maintenance legislation may affect include labor supply, the propensity to migrate, investments in human capital (such as in schooling and on-the-job training), consumption patterns, the propensity to marry and to stay married, and fertihty. The second task is to construct a set of socioeconomic indicators whereby these effects can be gauged in a manner readily comprehensible to policymakers. The third task is to develop an appropriate theoretical framework for analyzing behavioral changes systematically. The fourth task involves obtaining the information necessary to estimate the magnitude of program effects, that is, to predict the changes in the socioeconomic indicators that would result from adoption of the proposed income maintenance alternatives under consideration.