Suggestions for Assessing Economic and Demographic Effects of Income Maintenance Programs

This report examines some of the fundamental research issues that must be resolved before the effects of alternative income maintenance programs can be properly assessed. It summarizes RAND's research for the Economic Development Administration on assessing the regional effects of income maintenance programs, discusses the principal issues and problems in estimating those effects, and provides specific recommendations for future research. The ways in which an income maintenance program might change labor supply, migration, consumption, and investment patterns are described. The report contrasts two alternative approaches to estimating these changes — controlled social experiments and nonexperimental survey data — and then focuses primarily on issues associated with using nonexperimental data. Among the issues examined are the difficult transition from theoretically correct variables to measurable ones, the choice of estimation technique, and the selection of the sample and subsamples. Existing nonexperimental datasets are also compared.