Safety Net Use

  • Karen Jusko
  • Mark Duggan
  • Hilary Hoynes
  • Matthew Stagner

Leaders: Mark Duggan, Hilary Hoynes, Karen Jusko, Matthew Stagner

The Safety Net RG is devoted to monitoring changes in government transfers and anti-poverty programs and assessing whether they are meeting the needs of the poor. The U.S. safety net is undergoing such changes as (a) an ongoing decline in TANF cash benefits, (b) rapid increases in spending on EITC, Medicaid, Disability Insurance, Unemployment Insurance, and SNAP, and (c) a dramatic shift toward spending that favors the “working poor” over the more destitute. The CPI affiliates working within this research group are monitoring these changes, examining their implications for poverty, assessing the effectiveness of key government and nongovernment programs in reducing poverty, and modeling the costs and benefits of possible changes in policy and programs. We’ve provided a sampling here of some of this ongoing research.

Poverty Relief Project: With Kate Weisshaar, Karen Jusko uses the poverty relief ratio to evaluate the effectiveness of anti-poverty programs over time, across states, and across countries. Which state is the least effective in fighting poverty? Has the U.S. become more or less effective over time? These and other questions are answered in our latest State of the Union reports.

Long-run effects of SNAP: Have we underestimated the returns to SNAP by ignoring the long-run effects on children exposed to it in their early childhood? It’s now possible to find out.

California Welfare LaboratoryThe poverty rate in California, when measured with the Supplemental Poverty Measure, is the highest in the country. What can be done to bring that rate down? The mission of the California Welfare Laboratory is to make research on California’s welfare programs accessible to all and thus facilitate an informed discussion of what is working and what needs to be improved.

Differential EITC effects: It is often argued that early interventions have especially high payoffs.  Are the returns to the EITC indeed larger when it goes to parents with young children?

Disability and poverty: Does the federal government’s disability program reduce labor supply? Although it’s long been difficult to identify a causal effect, Mark Duggan has now found a way.

The effects of TANF: The TANF program is very decentralized and thus takes on dramatically different forms. How can we exploit that variability to find out what’s working?

Safety Net - CPI Research

Title Author Media
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.

The Impact of Disability Benefits on Labor Supply: Evidence from the VA's Disability Compensation Program David H. Autor, Mark Duggan , Kyle Greenberg , David S. Lyle

The Impact of Disability Benefits on Labor Supply: Evidence from the VA's Disability Compensation Program

Author: David H. Autor, Mark Duggan , Kyle Greenberg , David S. Lyle
Publisher: American Economic Journal: Applied Economi
Date: 06/2016

Combining administrative data from the U.S. Army, Department of Veterans Affairs, and Social Security Administration, we analyze the effect of the VA's Disability Compensation (DC) program on veterans' labor force participation and earnings. We study the 2001 Agent Orange decision, a unique policy change that expanded DC eligibility for Vietnam veterans who served in theatre but did not expand eligibility to other veterans of this era, to assess the causal effects of DC enrollment. We estimate that benefits receipt reduced veterans’ labor force participation by 18 percentage points, though measured income net of transfer income rose on average.

Increasing Family Complexity and Volatility: The Difficulty in Determining Child Tax Benefits Elaine Maag, Elizabeth Peters, Sara Edelstein

Increasing Family Complexity and Volatility: The Difficulty in Determining Child Tax Benefits

Author: Elaine Maag, Elizabeth Peters, Sara Edelstein
Publisher: Urban-Brookings Tax Policy Center
Date: 03/2016

The American family is changing. Individuals marry later, divorce more frequently, or live together without being married. Nonmarital births, complex custody arrangements, and multiple generations of families living together are more common, but the tax system has not kept pace. Although tax benefits are an important pillar of support for children, understanding who in a complex family should claim them can be difficult. We document demographic trends and explain their importance with respect to tax filing and eligibility for child-related benefits, such as the earned income tax credit, child tax credit, and dependent exemption.

Does the benefits schedule of cash assistance programs affect the purchase of temptation goods? Evidence from Peru J.S. White, S. Basu

Does the benefits schedule of cash assistance programs affect the purchase of temptation goods? Evidence from Peru

Author: J.S. White, S. Basu
Publisher: Journal of Health Economics
Date: 03/2016

A critique of cash assistance programs is that beneficiaries may spend the money on "temptation goods" such as alcohol and tobacco. We exploit a change in the payment schedule of Peru's conditional cash transfer program to identify the impact of benefit receipt frequency on the purchase of temptation goods. We use annual household data among cross-sectional and panel samples to analyze the effect of the policy change on the share of the household budget devoted to four categories of temptation goods. Using a difference-in-differences estimation approach, we find that larger, less frequent payments increased the expenditure share of alcohol by 55-80% and sweets by 10-40%, although the absolute magnitudes of these effects are small. Our study suggests that less frequent benefits scheduling may lead cash recipients to make certain types of temptation purchases.

Health Behaviors, Mental Health, and Health Care Utilization Among Single Mothers After Welfare Reforms in the 1990s Sanjay Basu, David H. Rehkopf, Arjumand Siddiqi, M. Maria Glymour, Ichiro Kawachi

Health Behaviors, Mental Health, and Health Care Utilization Among Single Mothers After Welfare Reforms in the 1990s

Author: Sanjay Basu, David H. Rehkopf, Arjumand Siddiqi, M. Maria Glymour, Ichiro Kawachi
Publisher: American Journal of Epidemiology
Date: 03/2016

We studied the health of low-income US women affected by the largest social policy change in recent US history: the 1996 welfare reforms. Using the Behavioral Risk Factor Surveillance System (1993–2012), we performed 2 types of analysis. First, we used difference-in-difference-in-differences analyses to estimate associations between welfare reforms and health outcomes among the most affected women (single mothers aged 18–64 years in 1997; n = 219,469) compared with less affected women (married mothers, single nonmothers, and married nonmothers of the same age range in 1997; n = 2,422,265). We also used a synthetic control approach in which we constructed a more ideal control group for single mothers by weighting outcomes among the less affected groups to match pre-reform outcomes among single mothers. In both specifications, the group most affected by welfare reforms (single mothers) experienced worse health outcomes than comparison groups less affected by the reforms. For example, the reforms were associated with at least a 4.0-percentage-point increase in binge drinking (95% confidence interval: 0.9, 7.0) and a 2.4-percentage-point decrease in the probability of being able to afford medical care (95% confidence interval: 0.1, 4.8) after controlling for age, educational level, and health care insurance status. Although the reforms were applauded for reducing welfare dependency, they may have adversely affected health.

Safety Net - CPI Affiliates

Hilary Hoynes Co-Director, Center on Poverty and Inequality; Safety Net and Incarceration Research Group Leader; Professor of Public Policy and Economics; Haas Distinguished Chair in Economic Disparities University of California, Berkeley
Karen Jusko Safety Net Research Group Leader; Assistant Professor of Political Science Stanford University
Mark Duggan Safety Net Research Group Leader; Trione Director, Stanford Institute for Economic Policy Research; Wayne and Jodi Cooperman Professor of Economics Stanford University
Matthew Stagner Safety Net Research Group Leader; Director of Human Services Research Mathematica Policy Research
Francisco Pedraza Assistant Professor of Political Science Texas A&M University

Pages

Safety Net - Other Research

Title Author Media
Separate and Unequal: The Dimensions and Consequences of Safety Net Decentralization in the U.S. 1994-2014 Sarah K. Bruch, Marcia K. Meyers, Janet C. Gornick

Separate and Unequal: The Dimensions and Consequences of Safety Net Decentralization in the U.S. 1994-2014

Author: Sarah K. Bruch, Marcia K. Meyers, Janet C. Gornick
Publisher: Institute for Research on Poverty
Date: 08/2016

In this paper, we examine the dimensions and consequences of decentralized social safety netpolicies. We consider the adequacy of benefits and inclusiveness of receipt for eleven federal-stateprograms that constitute the core of safety net provision for working age adults and families: cashassistance, food assistance, health insurance, child support, child care, preschool/early education, unemployment insurance, state income taxes, cash assistance work assistance, disability assistance, andhousing assistance. In the first part of the paper we examine the extent of cross-state inequality in socialprovision. We find substantial variation across states; variation that is consistent with policy design differences in state discretion; and at levels equal to or greater than variation across the European countries that have been recognized as having different welfare regimes. In the second section, we turn to an analysis of change over time (1994 to 2014) examining four dimensions of convergence: degree, location of change, direction of change, and scope. We find both decreases (retrenchment) and increases (expansions) of provision, a handful of cases of convergence (decreasing inequality) and divergence (increasing inequality), and a great deal of synchronous change and persistence in the magnitude of crossstateinequalities.

Preservation of Affordable Rental Housing: Evaluation of the MacArthur Foundation's Window of Opportunity Initiative Heather L. Schwartz, Raphael W. Bostic, Richard K. Green, Vincent J. Reina, Lois M. Davis, Catherine H. Augustine

Preservation of Affordable Rental Housing: Evaluation of the MacArthur Foundation's Window of Opportunity Initiative

Author: Heather L. Schwartz, Raphael W. Bostic, Richard K. Green, Vincent J. Reina, Lois M. Davis, Catherine H. Augustine
Publisher: RAND Corporation
Date: 06/2016

In 2000, the MacArthur Foundation began the Window of Opportunity initiative, a 20-year, $187 million project intended to help preserve privately owned affordable rental housing. The authors of this report assess whether the initiative achieved its goals and identify lessons learned about effective preservation practices. In doing so, they also provide a summary of the evolution of practices in preserving affordable rental housing, discuss challenges and opportunities for preservation going forward, and identify lessons learned that may help other philanthropies in their own philanthropic initiatives, even if they do not pertain to housing.

The authors find that the MacArthur Foundation met most of its goals for Window of Opportunity. As the initiative nears its end, large nonprofit preservation developers/owners have greater financial capacity and reputation, there are more resources and vehicles for preservation, and, to a lesser degree, the policy environment has changed to the benefit of preservation. However, Window of Opportunity has not achieved its most ambitious federal policy goals and is likely to fall short of its target for the number of privately owned affordable rental housing that will be preserved.

Cash on the Table: Why Traditional Theories of Market Failure Fail Robert H. Frank

Cash on the Table: Why Traditional Theories of Market Failure Fail

Author: Robert H. Frank
Publisher: Journal of Economic Behavior & Organization
Date: 06/2016

Many modern progressives attribute the market's failings to conspiracies by powerful corporate actors to exploit workers and consumers. In this paper I defend the claim that many of the same failures are instead often rooted in competition among individuals for relative advantage. In the familiar stadium metaphor, all stand to get a better view, only to discover that no one sees any better than if all had remained comfortably seated. Analogous discrepancies between individual and collective incentives help explain the presence of overtime laws, workplace safety regulations, and many other institutional features of the modern welfare state. These features would be useful even if all consumers were perfectly informed and rational and markets took the perfectly competitive ideal form described in textbooks.

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.

Children Living With Uninsured Family Members: Differences by Family Structure Sharon Bzostek, Christine Percheski

Children Living With Uninsured Family Members: Differences by Family Structure

Author: Sharon Bzostek, Christine Percheski
Publisher: Journal of Marriage and Family
Date: 05/2016

Despite increased access to insurance through the Patient Protection and Affordable Care Act of 2010, uninsurance rates are expected to remain relatively high. Having uninsured family members may expose children to financial hardships. Eligibility rules governing both private and public health insurance are based on outdated expectations about family structure. Using 2009–2011 data from the National Health Interview Survey (N = 65,038), the authors investigated family structure differences in family-level insurance coverage of households with children. Children living with married biological parents were the least likely to have uninsured family members and most likely to have all family members covered by private insurance. Controlling for demographic characteristics and income, children in single-mother families had the same risk of having an uninsured family member as children in married-parent families. Children with cohabiting biological parents had higher rates of family uninsurance than children with married biological parents, even accounting for other characteristics.