An analysis of the relationship between various redistributive programs and poverty

This paper utilizes multivariate exogeneity (causality) tests to analyze the relationship between various income policy programs and the poverty rate. The framework we develop allows us to make a distinction between intended poverty reduction objectives and automatic stabilizing behavior. Since we find that the poverty in a given year affects the funding of social programs in later years, we conclude that these programs are primarily acting as automatic stabilizers (i.e., the poverty reduction instruments do not appear to have been implemented with a relentless intent to reduce poverty, a result consistent with Tullock's 1983, 1986] theorem).