Poverty and Deep Poverty

  • Kathryn Edin
  • Linda Burton
  • David Grusky

Leaders: Linda Burton, Kathryn Edin, David Grusky

The Supplemental Poverty Measure (SPM) reveals substantial post-1970 reductions in poverty under a constant (i.e., “anchored”) threshold, but this trend masks worrisome developments at the very bottom of the distribution. Although the overall SPM has trended downward since 1970, the SPM for households with less than half of the anchored threshold level (i.e., “deep poverty”) has remained stable since 1968. Even more worrying, the most extreme forms of poverty, such as living on less than $2 per day (per person), have in fact increased over the last two decades. The main tasks of our Poverty and Deep Poverty RG are to describe trends in poverty and deep poverty, to assess the effectiveness of current anti-poverty programs, and to examine the likely payoff to introducing new anti-poverty programs. We present a sampling of relevant projects below.

Frequent Reporting Project: Why are unemployment statistics reported monthly whereas poverty statistics are reported only once a year (and with such a long lag)? The CPI is hard at work solving this problem.

California Poverty Project: The CPI, in collaboration with the Public Policy Institute of California, issues the California Poverty Measure (CPM) annually. There are plans afoot to make it an even more powerful policy instrument. 

Ending Poverty in California: Is it possible to substantially reduce poverty in California by relying entirely on evidence-based programs? It indeed is.

The National Poverty StudyThe country’s one-size-fits-all poverty policy ignores the seemingly profound differences between suburban poverty, immigrant poverty, reservation poverty, rural white poverty, deindustrializing poverty, and the many other ways in which massive deprivation plays out in the U.S. The National Poverty Study, which will be the country’s first qualitative census of poverty, takes on the problem.

Income supports and deep poverty: The U.S. does not rely heavily on unconditional cash transfers in its poverty programming. Is this a mistake? The CPI is assisting Y Combinator in providing the first U.S. evidence on unconditional income support since the negative income tax experiments of the 1970s.

Disability and deep poverty: The country’s disability programs are an important anti-poverty weapon. In evaluating their effectiveness, it is important to determine whether the low employment rates among program recipients reflects an underlying (low) capacity for employment, as opposed to the labor-supply effects of the programs themselves. Although it’s long been difficult to assess such labor-supply effects, now there’s a way forward.

Evictions and deep and extreme poverty: Are evictions an important cause of deep and extreme poverty? This line of research examines the extent to which deep and extreme poverty can be reduced with a “housing first” policy that ramps up federal housing programs.

Deep poverty and TANF add-ons: The country is implicitly running hundreds of experiments on how best to structure TANF programs, but it hasn’t had the capacity to evaluate them. Are administrative data the answer?

Poverty - CPI Research

Title Author Media
Who Speaks for the Poor? Karen Jusko

Who Speaks for the Poor?

Author: Karen Jusko
Publisher: Cambridge University Press
Date: 09/2017

Who Speaks for the Poor? explains why parties represent some groups and not others. This book focuses attention on the electoral geography of income, and how it has changed over time, to account for cross-national differences in the political and partisan representation of low-income voters. Jusko develops a general theory of new party formation that shows how changes in the geographic distribution of groups across electoral districts create opportunities for new parties to enter elections, especially where changes favor groups previously excluded from local partisan networks. Empirical evidence is drawn first from a broadly comparative analysis of all new party entry and then from a series of historical case studies, each focusing on the strategic entry incentives of new low-income peoples' parties. Jusko offers a new explanation for the absence of a low-income people's party in the USA and a more general account of political inequality in contemporary democratic societies.

A Qualitative Census of Rural and Urban Poverty J. Trent Alexander, Robert Andersen, Peter W. Cookson, Kathryn Edin, Jonathan Fisher, David B. Grusky, Marybeth Mattingly, Charles Varner

A Qualitative Census of Rural and Urban Poverty

Author: J. Trent Alexander, Robert Andersen, Peter W. Cookson, Kathryn Edin, Jonathan Fisher, David B. Grusky, Marybeth Mattingly, Charles Varner
Publisher: Annals of the American Academy of Political and Social Science
Date: 06/2017

If we want to build authentic evidence-based policy, we need a strong descriptive foundation of evidence on the everyday experience of poverty. The National Poverty Study (NPS), which is currently in development, provides this foundation with a new “qualitative census” of the everyday conditions of poverty in rural, suburban, and urban sites. The NPS will allow us to build new evidence-based theories of poverty, evaluate and improve existing place-based antipoverty policies, validate official poverty measures, and assist local communities in improving the safety net for vulnerable populations.

State of the Union 2017: Poverty Linda M. Burton, Marybeth Mattingly, Juan Pedroza, Whitney Welsh

State of the Union 2017: Poverty

Author: Linda M. Burton, Marybeth Mattingly, Juan Pedroza, Whitney Welsh
Publisher: Stanford Center on Poverty and Inequality
Date: 06/2017

Though some gaps have narrowed, there remain substantial racial-ethnic differences in poverty, with blacks and Native Americans continuing to experience the highest poverty rates, Hispanics following with slightly lower rates, and whites and Asians experiencing the lowest poverty rates. The sizes of these racial-ethnic gaps often differ substantially by region, with black women in the rural South, for example, facing poverty rates as high as 37 percent.

Using Tax Policy to Address Economic Need: An Assessment of California’s New State EITC Christopher Wimer, Marybeth Mattingly, Sara Kimberlin, Jonathan Fisher, Caroline Danielson, Sarah Bohn

Using Tax Policy to Address Economic Need: An Assessment of California’s New State EITC

Author: Christopher Wimer, Marybeth Mattingly, Sara Kimberlin, Jonathan Fisher, Caroline Danielson, Sarah Bohn
Publisher: Stanford Center on Poverty and Inequality
Date: 12/2016

This policy brief provides estimates of the number of tax filers who qualify for the new California EITC and the amounts they will receive. It does so by modeling the California EITC as if it had been implemented in tax year 2013. We find that an estimated 614,000 tax filers and their family members (1.97 million individuals) could benefit from the credit. We then examine the extent to which such a credit might reduce poverty and narrow poverty gaps among recipients and their family members. An estimated 364,000 of the 2.20 million individuals living in deep poverty (as measured under the California Poverty Measure) are eligible for the state EITC, with an average family benefit of $464. Roughly 1.4 percent of California’s deep poverty population (about 16,000 adults and 15,000 children) would be moved out of deep poverty if they made use of the state credit. Finally, we compare the enacted policy to other potential program expansions in terms of cost, reach, average benefit, and poverty reduction. 

 

Child Poverty, the Great Recession, and the Social Safety Net in the United States Marianne Bitler, Hilary Hoynes, Elira Kuka

Child Poverty, the Great Recession, and the Social Safety Net in the United States

Author: Marianne Bitler, Hilary Hoynes, Elira Kuka
Publisher: NBER
Date: 09/2016

In this paper, we comprehensively examine the effects of the Great Recession on child poverty, with particular attention to the role of the social safety net in mitigating the adverse effects of shocks to earnings and income. Using a state panel data model and data for 2000 to 2014, we estimate the relationship between the business cycle and child poverty, and we examine how and to what extent the safety net is providing protection to at-risk children. We find compelling evidence that the safety net provides protection; that is, the cyclicality of after-tax-and-transfer child poverty is significantly attenuated relative to the cyclicality of private income poverty. We also find that the protective effect of the safety net is not similar across demographic groups, and that children from more disadvantaged backgrounds, such as those living with non-Hispanic black or Hispanic, single, or particularly immigrant household heads-or immigrant spouses, experience larger poverty cyclicality than non-Hispanic white, married, or native household heads with native spouses. Our findings hold across a host of choices for how to define poverty. These include measures based on absolute thresholds or more relative thresholds. They also hold for measures of resources that include not only cash and near cash transfers net of taxes but also several measures of medical benefits.

poverty - CPI Affiliates

David Grusky's picture David Grusky Director, Center on Poverty and Inequality; Professor of Sociology
Stanford University
Kathryn Edin's picture Kathryn Edin Poverty Research Group Leader, Bloomberg Distinguished Professor of Sociology
Johns Hopkins University
Linda Burton's picture Linda Burton Poverty Research Group Leader, Dean of the Social Sciences
Duke University
David Johnson's picture David Johnson Research Professor, Survey Research Center, Deputy Director, Panel Study of Income Dynamics
University of Michigan
Arloc Sherman's picture Arloc Sherman Senior Fellow
Center on Budget and Policy Priorities

Pages

Poverty - Other Research

Title Author Media
The Supplemental Poverty Measure: 2016 Liana Fox

The Supplemental Poverty Measure: 2016

Author: Liana Fox
Publisher: U.S. Census Bureau
Date: 09/2017

In 2016, the overall SPM rate was 13.9 percent. This was 0.6 percentage points lower than the 2015 SPM rate of 14.5 (Figure 1 and Figure 2).

SPM rates were down for children under age 18 and adults aged 18 to 64. SPM rates for individuals aged 65 and older were up, from 13.7 percent in 2015 to 14.5 percent in 2016 (Figure 1 and Figure 2).

The SPM rate for 2016 was 1.2 percentage points higher than the official poverty rate of 12.7 percent (Figure 3).

The percentage of individuals aged 65 and older with SPM resources below half their SPM threshold increased from 4.5 percent in 2015 to 5.2 percent in 2016 (Figure 6 and Appendix Table A-4).

There were 13 states plus the District of Columbia for which SPM rates were higher than official poverty rates, 20 states with lower rates, and 17 states for which the differences were not statistically significant (Figure 7).

Social Security continued to be the most important anti-poverty program, moving 26.1 million individuals out of poverty. Refundable tax credits moved 8.2 million people out of poverty (Figure 8).

Income and Poverty in the United States: 2016 Jessica L. Semega, Kayla R. Fontenot, Melissa A. Kollar

Income and Poverty in the United States: 2016

Author: Jessica L. Semega, Kayla R. Fontenot, Melissa A. Kollar
Publisher: U.S. Census Bureau
Date: 09/2017

Summary of findings:

Real median household income increased 3.2 percent between 2015 and 2016.2 This is the second consecutive annual increase in median household income.

The number of full-time, year-round workers increased by 2.2 million in 2016.

The 2016 female-to-male earnings ratio was 0.805, a 1.1 percent increase from the 2015 ratio. This is the first time the female-to-male earnings ratio has experienced an annual increase since 2007.

The official poverty rate decreased by 0.8 percentage points between 2015 and 2016. At 12.7 percent, the 2016 poverty rate is not statistically different from 2007 (12.5 percent), the year before the most recent recession.

The number of people in poverty fell by 2.5 m

Asset Limits, SNAP Participation, and Financial Stability Caroline Ratcliffe, Signe-Mary McKernan, Laura Wheaton, Emma Cancian Kalish, Catherine Ruggles, Sara Armstrong, Christina Oberlin

Asset Limits, SNAP Participation, and Financial Stability

Author: Caroline Ratcliffe, Signe-Mary McKernan, Laura Wheaton, Emma Cancian Kalish, Catherine Ruggles, Sara Armstrong, Christina Oberlin
Publisher: The Urban Institute
Date: 06/2016

Asset limits in means-tested programs are designed to target benefits to the neediest people, but they can discourage low-income households from saving and can increase program costs when participants leave and reenter the program (i.e., churn) for administrative reasons. Using Survey of Income and Program Participation data from 1997 to 2013, we find that relaxing Supplemental Nutrition Assistance Program (SNAP) asset limits through broad-based categorical eligibility increases the likelihood that low-income people live in a household with a bank account (by 5 percent) and at least $500 in that bank account (by 8 percent). We also find that relaxed asset limits reduce SNAP churn by 26 percent.

Addressing Child Poverty: How Does the United States Compare With Other Nations? Timothy Smeeding, Catherine Thévenot

Addressing Child Poverty: How Does the United States Compare With Other Nations?

Author: Timothy Smeeding, Catherine Thévenot
Publisher: Academic Pediatrics
Date: 04/2016

Poverty during childhood raises a number of policy challenges. The earliest years are critical in terms of future cognitive and emotional development and early health outcomes, and have long-lasting consequences on future health. In this article child poverty in the United States is compared with a set of other developed countries. To the surprise of few, results show that child poverty is high in the United States. But why is poverty so much higher in the United States than in other rich nations? Among child poverty drivers, household composition and parent's labor market participation matter a great deal. But these are not insurmountable problems. Many of these disadvantages can be overcome by appropriate public policies. For example, single mothers have a very high probability of poverty in the United States, but this is not the case in other countries where the provision of work support increases mothers' labor earnings and together with strong public cash support effectively reduces child poverty. In this article we focus on the role and design of public expenditure to understand the functioning of the different national systems and highlight ways for improvements to reduce child poverty in the United States. We compare relative child poverty in the United States with poverty in a set of selected countries. The takeaway is that the United States underinvests in its children and their families and in so doing this leads to high child poverty and poor health and educational outcomes. If a nation like the United States wants to decrease poverty and improve health and life chances for poor children, it must support parental employment and incomes, and invest in children's futures as do other similar nations with less child poverty.

Strengthening the EITC for Childless Workers Would Promote Work and Reduce Poverty Arloc Sherman, Chuck Marr, Chye-Ching Huang, Cecile Murray

Strengthening the EITC for Childless Workers Would Promote Work and Reduce Poverty

Author: Arloc Sherman, Chuck Marr, Chye-Ching Huang, Cecile Murray
Publisher: Center on Budget and Policy Priorities
Date: 04/2016

Working childless adults[ are the lone group that the federal tax code taxes into or deeper into poverty, largely because they are also the only group largely excluded from the Earned Income Tax Credit (EITC).  For low-income working families with children, the EITC encourages and rewards work and offsets federal payroll and income taxes.  The EITC for childless adults, by contrast, is so small that it effectively does none of those things. Today, the federal tax code taxes about 7.5 million childless adults aged 21 through 66 into or deeper into poverty.