Trends in Safety Net Use

  • Karen Jusko
  • Mark Duggan

Leaders: Mark Duggan, Karen Jusko

The Safety Net RG is devoted to monitoring changes in government and nongovernment transfers to the poor and assessing whether these programs are meeting the needs of the poor. This RG is critical because transfers are playing an important role in reducing hardship as nonworking poverty continues to rise. We are working on two main projects within this RG: (a) a study of state-by-state variation in safety net and transfer programs; (b) developing and maintaining an archive of research and data on poverty in California (www.c-well.org); and (c) examining the effects of social programs on individual and firm behavior.

Poverty Relief Project: This project, led by Stanford political science professor Karen Jusko, develops a new measure of the effectiveness of cash-based poverty relief programs. The "poverty relief ratio" provides an estimate of the extent of redistribution relative to what would be required to bring all low-income households to a well-defined poverty line. With Kate Weisshaar, Jusko uses the poverty relief ratio to evaluate, over the last 25 years, the effectiveness of antipoverty programs at the national and state level. The first set of national and state-level results were released in our 2014 and 2015 State of the Union reports. This new measure will continue to be developed, applied, and disseminated in further research projects.

California Welfare Laboratory: The Safety Net RG, in collaboration with Charles Varner and Pablo Mitnik, is also responsible for building and maintaining the California Welfare Laboratory (www.c-well.org). The threefold purpose of the California Welfare Laboratory is (1) to host a research database on California’s welfare programs; (2) to disseminate new research on welfare-relevant topics within California; and (3) to allow scholars, county welfare administrators, and the general public to monitor recent trends in poverty and welfare usage. The mission of the 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.

Behavioral Effects: In a third stream of research led by Mark Duggan, the focus shifts to the effect of government expenditure programs, such as Social Security, Medicare, and Medicaid, on the behavior of individuals and firms. This research program also explores the effect of federal disability programs on labor market outcomes (go here for example). 

 

Safety Net - CPI Research

Title Author Media
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.

State of the Union 2016: Safety Net Karen Jusko

State of the Union 2016: Safety Net

Author: Karen Jusko
Publisher:
Date: 02/2016

The U.S. safety net provides about half of the income support needed to increase all incomes to the level needed to meet basic needs. Levels of poverty relief are typically higher—and sometimes much higher— in other post-industrial countries.

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
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.

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.