Question: The federal government subsidizes state spending on welfare thus changing

The federal government subsidizes state spending on welfare, thus changing the effective price to states of welfare spending. According states of welfare spending. According to Baicker [2005], the elasticity of state spending on benefits per recipient is 0.38. Suppose that the federal government matches state welfare spending on a one- for- one basis, and then changes to a two- for- one basis. How would you expect state welfare spending to change?

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  • CreatedMarch 25, 2015
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