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Chapter 15: Q 5. (page 376)

How does the TANF attempt to loosen the poverty trap?

Short Answer

Expert verified

TANF tries to loosen the poverty trap in society through demanding work requirements on which the funding from the government will be utilized and binding the time limits of receiving federal money through TANF by an individual.

Step by step solution

01

Step 1. Temporary Assistance for Needy Families (TANF)

The Temporary Assistance for Needy Families (TANF) is a government-aided welfare program where each state is provided with a fixed amount of money from the part of the federal government to be spent on any anti-poverty program (like direct cash transfers to the poor families, reduction in teenage pregnancy, etc.) by the states.

02

Step 2. The TANF in loosening the poverty trap

The Temporary Assistance for Needy Families (TANF) was designed in such a way that it can loosen the poverty trap in society. The federal government kept two primary requirements for receiving the facilities of TANF. One, the states must come up with work requirements the grants from TANF will be utilized. Second, the benefits from TANF (in the form of receiving federal money) will be given to an individual for a total of only five years over his/her lifetime, not more than that. This way, TANF tried to minimize the poverty trap in society through demanding work requirements and binding the time limits of receiving the benefits from TANF.

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Most popular questions from this chapter

Who are the near-poor?

The poverty rate would be substantially lower if the market value of in-kind transfers were added to family income. The largest in-kind transfer is Medicaid, the government health program for the poor. Lets say the program costs \(10,000 per recipient family.

a. If the government gave each recipient family a \)10,000 check instead of enrolling them in the Medicaid program, do you think that most of these families would spend that money to purchase health insurance? Why? (Recall that the poverty level for a family of four is about $25,000.)

b. How does your answer to part (a) affect your view about whether we should determine the poverty rate by valuing in-kind transfers at the price the government pays for them? Explain.

c. How does your answer to part (a) affect your view about whether we should provide assistance to the poor in the form of cash transfers or in-kind transfers? Explain.

If a country had perfect income equality what

would the Lorenz curve look like?

Identify some public policies that can reduce the

level of economic inequality.

This problem uses the analogy of a “leaky bucket” to explain one constraint on the redistribution of income.

a. What elements of the U.S. system for redistributing income create the leaks in the bucket? Be specific.

b. Between Republicans and Democrats, who do you think generally believes that the bucket used for redistributing income is leaky? How does that belief affect their views about the amount of income redistribution that the government should undertake?
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