Safety Net Use

  • Karen Jusko
  • Mark Duggan
  • Hilary Hoynes

Leaders: Mark Duggan, Hilary Hoynes, Karen Jusko

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
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: Safety Net Mark Duggan, Valerie Scimeca

State of the Union 2017: Safety Net

Author: Mark Duggan, Valerie Scimeca
Publisher: Stanford Center on Poverty and Inequality
Date: 06/2017

Given that poverty rates are signicantly higher among blacks, Hispanics, and American Indians than in the general population, it is not surprising that their enrollment in federal safety net programs, such as Medicaid and food stamps, is also higher. However, poor blacks and American Indians are significantly less likely than other racial and ethnic groups to enroll in Medicaid, which is the largest federal safety net program. No similar gap exists for enrollment in the food stamp or Supplemental Security Income programs.

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.

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.

safety net - CPI Affiliates

Hilary Hoynes's picture Hilary Hoynes 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's picture Karen Jusko Safety Net Research Group Leader, Assistant Professor of Political Science
Stanford University
Mark Duggan's picture Mark Duggan Safety Net Research Group Leader, Trione Director, Stanford Institute for Economic Policy Research, Wayne and Jodi Cooperman Professor of Economics
Stanford University
Francisco Pedraza's picture Francisco Pedraza Assistant Professor of Public Policy & Political Science
University of California, Riverside
Gopi Shah Goda's picture Gopi Shah Goda Deputy Director and Senior Fellow, SIEPR
Stanford Institute for Economic Policy Research (SIEPR)

Pages

Safety Net - Other Research

Title Author Media
Subsidizing Health Insurance for Low-Income Adults: Evidence from Massachusetts Amy Finkelstein, Nathaniel Hendren, Mark Shepard

Subsidizing Health Insurance for Low-Income Adults: Evidence from Massachusetts

Author: Amy Finkelstein, Nathaniel Hendren, Mark Shepard
Publisher: NBER
Date: 08/2017

How much are low-income individuals willing to pay for health insurance, and what are the implications for insurance markets? Using administrative data from Massachusetts’ subsidized insurance exchange, we exploit discontinuities in the subsidy schedule to estimate willingness to pay and costs of insurance among low-income adults. As subsidies decline, insurance take-up falls rapidly, dropping about 25% for each $40 increase in monthly enrollee premiums. Marginal enrollees tend to be lower-cost, consistent with adverse selection into insurance. But across the entire distribution we can observe – approximately the bottom 70% of the willingness to pay distribution – enrollee willingness to pay is always less than half of own expected costs. As a result, we estimate that take-up will be highly incomplete even with generous subsidies: if enrollee premiums were 25% of insurers’ average costs, at most half of potential enrollees would buy insurance; even premiums subsidized to 10% of average costs would still leave at least 20% uninsured. We suggest an important role for uncompensated care for the uninsured in explaining these findings and explore normative implications.

Knowledge of Future Job Loss and Implications for Unemployment Insurance Nathaniel Hendren

Knowledge of Future Job Loss and Implications for Unemployment Insurance

Author: Nathaniel Hendren
Publisher: American Economic Review
Date: 07/2017

This paper studies the implications of individuals' knowledge of future job loss for the existence of an unemployment insurance (UI) market. Learning about job loss leads to consumption decreases and spousal labor supply increases. This suggests existing willingness to pay estimates for UI understate its value. But it yields new estimation methodologies that account for and exploit responses to learning about future job loss. Although the new willingness to pay estimates exceed previous estimates, I estimate much larger frictions imposed by private information. This suggests privately traded UI policies would be too adversely selected to be profitable, at any price.

An Analysis of the Memphis Nurse-Family Partnership Program James J. Heckman, Margaret L. Holland, Kevin K. Makino, Rodrigo Pinto, Maria Rosales-Rueda

An Analysis of the Memphis Nurse-Family Partnership Program

Author: James J. Heckman, Margaret L. Holland, Kevin K. Makino, Rodrigo Pinto, Maria Rosales-Rueda
Publisher: NBER
Date: 07/2017

This paper evaluates a randomized controlled trial of the Nurse-Family Partnership (NFP) program conducted in Memphis, TN in 1990. NFP offers home visits conducted by nurses for disadvantaged first-time mothers during pregnancy and early childhood. We test NFP treatment effects using permutation-based inference that accounts for the NFP randomization protocol. Our methodology is valid for small samples and corrects for multiple-hypothesis testing. We also analyze the underlying mechanisms generating these treatment effects. We decompose NFP treatment effects into components associated with the intervention-enhanced parenting and early childhood skills. The NFP improves home investments, parenting attitudes and mental health for mothers of infants at age 2. At age 6, the NFP boosts cognitive skills for both genders and socio-emotional skills for females. These treatment effects are explained by program-induced improvements in maternal traits and early-life family investments. At age 12, the treatment effects for males (but not for females) persist in the form of enhanced achievement test scores. Treatment effects are largely explained by enhanced cognitive skills at age 6. Our evidence of pronounced gender differences in response to early childhood interventions contributes to a growing literature on this topic.

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.