Who Won the U.S. Presidential Debate?

Social transfer programs have significant geographic differences in spending that help to reduce income gaps between rich and poor regions of the United States, according to new University of Michigan research.

The study, published in Social Service Review, shows that federal social insurance programs such as Social Security and the Earned Income Tax Credit reduced geographic inequality by 12% in 2019, equivalent to reversing more than 28% of the growth in inequality observed since the 1970s.

Despite being designed without an explicit goal of reducing regional disparities, these programs disproportionately benefit low-income areas. Retirement benefits caused the most significant total reduction in inequality. Spending-adjusted reductions were largest in veterans' benefits, the EITC and the Supplemental Nutrition Assistance Program.

"Social transfer programs have long been heralded for their individual-level benefits, but their role in reducing regional inequalities has often been overlooked. Given ongoing debates about federal social transfer programs, such as the Child Tax Credit, our findings offer a new dimension for policymakers to consider," said co-author Catalina Anampa Castro, U-M doctoral student in sociology and public policy.

Inequality has risen across the United States, with significant geographic disparities emerging over the past four decades. Early in the period under study, higher incomes were seen in metro areas in the upper Midwest and the rural interior West. However, these areas have experienced relative income declines compared to the rest of the country.

• Read More