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
Poverty and Child Development: A Longitudinal Study of the Impact of the Earned Income Tax Credit Rita Hamad, David H. Rehkopf

Poverty and Child Development: A Longitudinal Study of the Impact of the Earned Income Tax Credit

Author: Rita Hamad, David H. Rehkopf
Publisher: American Journal of Epidemiology
Date: 04/2016

Although adverse socioeconomic conditions are correlated with worse child health and development, the effects of poverty-alleviation policies are less understood. We examined the associations of the Earned Income Tax Credit (EITC) on child development and used an instrumental variable approach to estimate the potential impacts of income. We used data from the US National Longitudinal Survey of Youth (n = 8,186) during 1986–2000 to examine effects on the Behavioral Problems Index (BPI) and Home Observation Measurement of the Environment inventory (HOME) scores. We conducted 2 analyses. In the first, we used multivariate linear regressions with child-level fixed effects to examine the association of EITC payment size with BPI and HOME scores; in the second, we used EITC payment size as an instrument to estimate the associations of income with BPI and HOME scores. In linear regression models, higher EITC payments were associated with improved short-term BPI scores (per $1,000, β = −0.57; P = 0.04). In instrumental variable analyses, higher income was associated with improved short-term BPI scores (per $1,000, β = −0.47; P = 0.01) and medium-term HOME scores (per $1,000, β = 0.64; P = 0.02). Our results suggest that both EITC benefits and higher income are associated with modest but meaningful improvements in child development. These findings provide valuable information for health researchers and policymakers for improving child health and development.

Childhood Environment and Gender Gaps in Adulthood Raj Chetty, Nathaniel Hendren, Frina Lin, Jeremy Majerovitz, Benjamin Scuderi

Childhood Environment and Gender Gaps in Adulthood

Author: Raj Chetty, Nathaniel Hendren, Frina Lin, Jeremy Majerovitz, Benjamin Scuderi
Publisher: NBER
Date: 02/2016

We show that differences in childhood environments play an important role in shaping gender gaps in adulthood by documenting three facts using population tax records for children born in the 1980s. First, gender gaps in employment rates, earnings, and college attendance vary substantially across the parental income distribution. Notably, the traditional gender gap in employment rates is reversed for children growing up in poor families: boys in families in the bottom quintile of the income distributionare less likely to work than girls. Second, these gender gaps vary substantially across counties and commuting zones in which children grow up. The degree of variation in outcomes across places is largest for boys growing up in poor, single-parent families. Third, the spatial variation in gender gaps is highly correlated with proxies for neighborhood disadvantage. Low-income boys who grow up in high-poverty, high-minority areas work significantly less than girls. These areas also have higher rates of crime, suggesting that boys growing up in concentrated poverty substitute from formal employment to crime. Together, these findings demonstrate that gender gaps in adulthood have roots in childhood, perhaps because childhood disadvantage is especially harmful for boys.

State of the Union 2016: Poverty Janet C. Gornick, Markus Jäntti

State of the Union 2016: Poverty

Author: Janet C. Gornick, Markus Jäntti
Date: 02/2016

The well-known exceptionalism of American relative poverty extends only to rich countries, not to middle-income countries. Using a relative poverty standard for disposable household income, the U.S. poverty rate exceeds that reported in all of the other high-income countries in this study, with the sole exception of Israel. 

State of the Union 2016: Health Jason Beckfield, Katherine Morris

State of the Union 2016: Health

Author: Jason Beckfield, Katherine Morris
Date: 02/2016

The U.S. population is not just sicker, on average, than the European population, but also has a higher level of health inequality than the European population. The U.S. states that combine low self-rated health with high health inequality look strikingly similar—in terms of their health profiles—to Central and Eastern European countries.

Living in a High Inequality Regime

Living in a High Inequality Regime

Publisher: Annals of the American Academy of Political and Social Science
Date: 01/2016

Income inequality in the United States is the highest it has been since the roaring 20s. The rich are getting richer. The middle class is descending from the middle. The poor are getting poorer. What accounts for the increase in wealth at the top? What dynamic forces have shaped this spectacular disparity? How are Americans adjusting to life in this brave new world? What effect does the social fallout of this inequality regime have on the fabric of American society?

The effects of rising inequality have proven difficult to tease out, but as the United States enters a moment in history in which key policy decisions about inequality, mobility, and poverty are being made, it is important for researchers to examine this trend to learn why there is so much inequality in the United States. In this volume of The ANNALS experts examine the “social fallout” from this income imbalance.  They shine a light on the winners and losers, focusing on occupational inequality, racial and gender inequality, as well as inequality in veteran groups. They explore accessibility and segregation to gauge how educational and crime/punishment trends are shaped by inequality. Finally, they examine how inequality impacts Americans’ views of themselves and others; the dynamics of class and culture; and the effects of socioeconomics on marriage, health, and death.

Poverty - CPI Affiliates

Christopher Jencks Malcolm Wiener Professor of Social Policy Harvard University
David Johnson Research Professor, Survey Research Center; Deputy Director, Panel Study of Income Dynamics University of Michigan
H. Luke Shaefer Associate Professor of Social Work and Associate Professor of Public Policy University of Michigan
Janet Gornick Director of LIS, Cross‐National Data Center in Luxembourg; Professor of Political Science and Sociology The Graduate Center, City University of New York
Markus Jäntti Professor of Economics Swedish Institute for Social Research, Stockholm University


Poverty - Other Research

Title Author Media
Compounded Deprivation in the Transition to Adulthood: The Intersection of Racial and Economic Inequality Among Chicagoans, 1995–2013 Kristin L. Perkins, Robert J. Sampson

Compounded Deprivation in the Transition to Adulthood: The Intersection of Racial and Economic Inequality Among Chicagoans, 1995–2013

Author: Kristin L. Perkins, Robert J. Sampson
Publisher: RSF: The Russell Sage Foundation Journal of the Social Sciences
Date: 11/2015

This paper investigates acute, compounded, and persistent deprivation in a representative sample of Chicago adolescents transitioning to young adulthood. Our investigation, based on four waves of longitudinal data from 1995 to 2013, is motivated by three goals. First, we document the prevalence of individual and neighborhood poverty over time, especially among whites, blacks, and Latinos. Second, we explore compounded deprivation, describing the extent to which study participants are simultaneously exposed to individual and contextual forms of deprivation—including material deprivation (such as poverty) and social-organizational deprivation (for example, low collective efficacy)—for multiple phases of the life course from adolescence up to age thirty-two. Third, we isolate the characteristics that predict transitions out of compounded and persistent poverty. The results provide new evidence on the crosscutting adversities that were exacerbated by the Great Recession and on the deep connection of race to persistent and compounded deprivation in the transition to adulthood.

The War on Poverty: Measurement, Trends, and Policy Robert Haveman, Rebecca Blank, Robert Moffitt, Timothy Smeeding, Geoffrey Wallace

The War on Poverty: Measurement, Trends, and Policy

Author: Robert Haveman, Rebecca Blank, Robert Moffitt, Timothy Smeeding, Geoffrey Wallace
Publisher: Journal of Policy Analysis and Management
Date: 05/2015

We present a 50-year historical perspective of the nation's antipoverty efforts, describing the evolution of policy during four key periods since 1965. Over this half-century, the initial heavy reliance on cash income support to poor families has eroded; increases in public support came largely in the form of in-kind (e.g., Food Stamps) and tax-related (e.g., the Earned Income Tax Credit) benefits. Work support and the supplementation of earnings substituted for direct support. These shifts eroded the safety net for the most disadvantaged in American society. Three poverty-related analytical developments are also described. The rise of the Supplemental Poverty Measure (SPM)—taking account of noncash and tax-related benefits—has corrected some of the serious weaknesses of the official poverty measure (OPM). The SPM measure indicates that the poverty rate has declined over time, rather than being essentially flat as the OPM implies. We also present snapshots of the composition of the poor population in the United States using both the OPM and the SPM, showing progress in reducing poverty overall and among specific socioeconomic subgroups since the beginning of the War on Poverty. Finally, we document the expenditure levels of numerous antipoverty programs that have accompanied the several phases of poverty policy and describe the effect of these efforts on the level of poverty. Although the effectiveness of government antipoverty transfers is debated, our findings indicate that the growth of antipoverty policies has reduced the overall level of poverty, with substantial reductions among the elderly, disabled, and blacks. However, the poverty rates for children, especially those living in single-parent families, and families headed by a low-skill, low-education person, have increased. Rates of deep poverty (families living with less than one-half of the poverty line) for the nonelderly population have not decreased, reflecting both the increasing labor market difficulties faced by the low-skill population and the tilt of means-tested benefits away from the poorest of the poor.

Health Selection into Neighborhoods Among Families in the Moving to Opportunity Program Mariana C. Arcaya, Corina Graif, Mary C. Waters, S. V. Subramanian

Health Selection into Neighborhoods Among Families in the Moving to Opportunity Program

Author: Mariana C. Arcaya, Corina Graif, Mary C. Waters, S. V. Subramanian
Publisher: American Journal of Epidemiology
Date: 03/2015

Moving to Opportunity for Fair Housing was a randomized experiment that moved very low-income US families from high-poverty neighborhoods to low-poverty neighborhoods starting in the early 1990s. We modeled report of a child's baseline health problem as a predictor of neighborhood outcomes for households randomly assigned to move from high- to low-poverty neighborhoods. We explored associations between baseline health problems and odds of moving with the program upon randomization (1994–1997), neighborhood poverty rate at follow-up (2002), and total time spent in affluent neighborhoods and duration-weighted poverty. Among 1,550 households randomized to low-poverty neighborhoods, a smaller share of households reporting baseline child health problems (P = 0.004) took up the intervention (38%) than those not reporting a health problem (50%). In weighted and covariate-adjusted models, a child health problem predicted nearly 40% lower odds of complying with the experimental condition (odds ratio = 0.62, 95% confidence interval: 0.42, 0.91; P = 0.015). Among compliers, a baseline child health problem predicted 2.5 percentage points' higher neighborhood poverty at take-up (95% confidence interval: 0.90, 4.07; P = 0.002). We conclude that child health problems in a household prior to randomization predicted lower likelihood of using the program voucher to move to a low-poverty neighborhood within the experiment's low-poverty treatment arm and predicted selection into poorer neighborhoods among experimental compliers. Child morbidity may constrain families attempting to improve their life circumstances.

A Comparison of Official Poverty Estimates in the Redesigned Current Population Survey Annual Social and Economic Supplement Joshua Mitchell, Trudi Renwick

A Comparison of Official Poverty Estimates in the Redesigned Current Population Survey Annual Social and Economic Supplement

Author: Joshua Mitchell, Trudi Renwick
Publisher: U.S. Census Bureau
Date: 01/2015

This paper presents a descriptive analysis of the poverty estimates from the 2014 Current Population Survey Annual Social and Economic Supplement (CPS ASEC) redesigned and traditional survey questionnaires. The 2014 CPS ASEC utilized a probability split panel design to test a new redesigned set of income questions. The income questions were redesigned with the goals of improving income reporting, increasing response rates, reducing reporting errors by taking better advantage of an automated questionnaire environment, and updating questions on retirement income and the income generated from retirement accounts and all other assets. Our main finding is that, among the demographic subgroups examined, most differences between the poverty estimates for the samples assigned to the traditional and redesigned survey instruments were not statistically significant but child (people under age 18) and elderly (people age 65 and older) poverty were higher in the sample assigned to the redesigned questionnaire despite the higher aggregate, mean, and median income collected in the sample with the redesigned questions compared to the sample with the traditional questions.

Alternatives to Capitalism: Proposals for a Democratic Economy Robin Hahnel, Erik Olin Wright

Alternatives to Capitalism: Proposals for a Democratic Economy

Author: Robin Hahnel, Erik Olin Wright
Publisher: New Left Project
Date: 12/2014

What would a viable free and democratic society look like? Poverty, exploitation, instability, hierarchy, subordination, environmental exhaustion, radical inequalities of wealth and power—it is not difficult to list capitalism’s myriad injustices. But is there a preferable and workable alternative?

Alternatives to Capitalism: Proposals for a Democratic Economy presents a debate between two such possibilities: Robin Hahnel’s “participatory economics” and Erik Olin Wright’s “real utopian” socialism. It is a detailed and rewarding discussion that illuminates a range of issues and dilemmas of crucial importance to any serious effort to build a better world.