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
Unemployment Insurance and Disability Insurance in the Great Recession Andreas I. Mueller, Jesse Rothstein, Till M. von Wachter

Unemployment Insurance and Disability Insurance in the Great Recession

Author: Andreas I. Mueller, Jesse Rothstein, Till M. von Wachter
Publisher: Journal of Labor Economics
Date: 01/2016

Social Security Disability Insurance (SSDI) awards rise during recessions. If marginal applicants are able to work but unable to find jobs, countercyclical Unemployment Insurance (UI) benefit extensions may reduce SSDI uptake. Exploiting UI extensions in the Great Recession as a source of variation, we find no indication that expiration of UI benefits causes SSDI applications and can rule out effects of meaningful magnitude. A supplementary analysis finds little overlap between the two programs’ recipient populations: only 28% of SSDI awardees had any labor force attachment in the prior calendar year, and of those, only 4% received UI.

The More Things Change, the More They Stay the Same? The Safety Net and Poverty in the Great Recession Marianne Bitler, Hilary Hoynes

The More Things Change, the More They Stay the Same? The Safety Net and Poverty in the Great Recession

Author: Marianne Bitler, Hilary Hoynes
Publisher: Journal of Labor Economics
Date: 01/2016

Much attention has been given to the large increases in safety net spending during the Great Recession. We examine the relationship between poverty, the safety net, and business cycles historically and test whether there has been a significant change in this relationship. We find that post-welfare reform, Temporary Assistance for Needy Families did not respond during the Great Recession and extreme poverty is more cyclical than in prior recessions. Food Stamps and Unemployment Insurance are providing more protection--or no less protection--in the Great Recession, and there is some evidence of less cyclicality for 100% poverty.

State of the States: Safety Net Karen Long Jusko

State of the States: Safety Net

Author: Karen Long Jusko
Publisher:
Date: 09/2015

In non-recessionary periods, the safety net provides about 38 percent of the income support needed to raise incomes up to the official poverty line. Only four states (Massachusetts, New Jersey, Rhode Island, and Washington) provide more than 60 percent of the support needed.

Spatial Assimilation in U.S. Cities and Communities? Emerging Patterns of Hispanic Segregation from Blacks and Whites Daniel T. Lichter, Domenico Parisi, Michael C. Taquino

Spatial Assimilation in U.S. Cities and Communities? Emerging Patterns of Hispanic Segregation from Blacks and Whites

Author: Daniel T. Lichter, Domenico Parisi, Michael C. Taquino
Publisher: Sage Publications
Date: 07/2015

This article provides a geographically inclusive empirical framework for studying changing U.S. patterns of Hispanic segregation. Whether Hispanics have joined the American mainstream depends in part on whether they translate upward mobility into residence patterns that mirror the rest of the nation. Based on block and place data from the 1990–2010 decennial censuses, our results provide evidence of increasing spatial assimilation among Hispanics, both nationally and in new immigrant destinations. Segregation from whites declined across the urban size-of-place hierarchy and in new destinations. Hispanics are also less segregated from whites than from blacks, but declines in Hispanic-black segregation have exceeded declines in Hispanic-white segregation. This result is consistent with the notion of U.S. Hispanics as a racialized population—one in which members sometimes lack the freedom to join whites in better communities. Hispanic income was significantly associated with less segregation from whites, but income inequality alone does not explain overall Hispanic segregation, which remains high. The segmented assimilation of Hispanics that we observe supports two seemingly contradictory theories: both the idea that spatial assimilation can come from economic and cultural assimilation and the notion that economic mobility is no guarantee of residential integration.

 

The Effect of Extended Unemployment Insurance Benefits: Evidence from the 2012-2013 Phase-Out Henry S. Farber , Jesse Rothstein, Robert G. Valletta

The Effect of Extended Unemployment Insurance Benefits: Evidence from the 2012-2013 Phase-Out

Author: Henry S. Farber , Jesse Rothstein, Robert G. Valletta
Publisher: American Economic Review
Date: 05/2015

Unemployment Insurance benefit durations were extended during the Great Recession, reaching 99 weeks for most recipients. The extensions were rolled back and eventually terminated by the end of 2013. Using matched CPS data from 2008-2014, we estimate the effect of extended benefits on unemployment exits separately during the earlier period of benefit expansion and the later period of rollback. In both periods, we find little or no effect on job-finding but a reduction in labor force exits due to benefit availability. We estimate that the rollbacks reduced the labor force participation rate by about 0.1 percentage point in early 2014.

safety net - CPI Affiliates

Torben Iversen's picture Torben Iversen Harold Hitchings Burbank Professor of Political Economy; BP Centennial Professor at London School of Business
Harvard University
Daniel Bertaux's picture Daniel Bertaux Member, Centre d'etude des mouvements sociaux, Director of research, Centre national de la recherche scientifique
École des hautes Études en science sociales
Victor Fuchs's picture Victor Fuchs Henry J. Kaiser, Jr. Professor of Economics and of Health Research and Policy (Emeritus)
Stanford University
Yu-Ling Chang Assistant Professor of Social Welfare
University of California, Berkeley
Michael S. Wald's picture Michael S. Wald Jackson Eli Reynolds Professor of Law, Emeritus, Professor (by courtesy) of Education
Stanford University

Pages

Safety Net - Other Research

Title Author Media
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.

Estimating labour supply elasticities based on cross-country micro data: A bridge between micro and macro estimates? Markus Jäntti, Jukka Pirttilä, Håkan Seline

Estimating labour supply elasticities based on cross-country micro data: A bridge between micro and macro estimates?

Author: Markus Jäntti, Jukka Pirttilä, Håkan Seline
Publisher: Journal of Public Economics
Date: 07/2015

The Nordic model relies on high tax rates to finance an extensive welfare state. If labour supply elasticities are large, the burden of financing the model can be large even if, arguably, the practice of providing subsidised goods that support labour supply is likely to mitigate these effects. We utilise repeated cross sections of micro data from several countries, including the four major Nordic countries, available from the Luxembourg Income Study, LIS, to estimate labour supply elasticities, both at the intensive and extensive margins. The data span over four decades and include a large number of tax reform episodes, with tax rate variation arising both from cross-sectional and country-level differences. Using these data, we investigate whether micro and macro estimates differ in a systematic way. The results do not provide strong support for the view that elasticities at the macro level would be higher than the corresponding micro elasticities.

Errors in Survey Reporting and Imputation and their Effects on Estimates of Food Stamp Program Participation Bruce D. Meyer, Robert M. Goerge, Nikolas Mittag

Errors in Survey Reporting and Imputation and their Effects on Estimates of Food Stamp Program Participation

Author: Bruce D. Meyer, Robert M. Goerge, Nikolas Mittag
Publisher:
Date: 06/2015

Measuring government benefit receipt in household surveys is important to assess the economic circumstances of disadvantaged populations, program takeup, the distributional effects of government programs, and other program effects. Receipt of food stamps is especially important given the large and growing size of the program and evidence of its effects on labor supply, health and other outcomes. We use administrative data on food
stamp participation in two states matched to American Community Survey (ACS), Current Population Survey (CPS), and Survey of Income and Program Participation (SIPP) household data. We find that 23 percent of true recipient households do not report receipt in the SIPP, 35 percent in the ACS, and fully 50 percent do not report receipt in the CPS. Both false negative and false positive reports vary with individual characteristics, leading to complicated biases in food stamp analyses. Our results are also informative about the reasons for misreporting and the success of different survey methods. We then directly examine biases in research finding, in particular the determinants of program receipt using our combined administrative and survey data. Our results differ from conventional estimates in showing higher participation by single parents, non-whites, middle-income households, and other groups. We directly examine one source of potential error, Census Bureau imputations, finding that excluding the imputed observations leads to worse ACS estimates, but has little effect on the CPS and SIPP estimates.

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.

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