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
Local Food Prices, SNAP Purchasing Power, and Child Health Erin T. Bronchetti, Garret S. Christensen, Hilary W. Hoynes

Local Food Prices, SNAP Purchasing Power, and Child Health

Author: Erin T. Bronchetti, Garret S. Christensen, Hilary W. Hoynes
Publisher: NBER
Date: 06/2018

The Supplemental Nutrition Assistance Program (SNAP, formerly food stamps) is one of the most important elements of the social safety net. Unlike most other safety net programs, SNAP varies little across states and over time, which creates challenges for quasi-experimental evaluation. Notably, SNAP benefits are fixed across 48 states; but local food prices vary, leading to geographic variation in the real value – or purchasing power – of SNAP benefits. In this study, we provide the first estimates that leverage variation in SNAP purchasing power across markets to examine effects of SNAP on child health. We link panel data on regional food prices to National Health Interview Survey data and use a fixed effects framework to estimate the relationship between local purchasing power of SNAP and children’s health and health care utilization. We find that lower SNAP purchasing power leads to lower utilization of preventive health care and more days of school missed due to illness. We find no effect on reported health status.

State of the Union 2018: Poverty H. Luke Shaefer, Marybeth Mattingly, Kathryn Edin

State of the Union 2018: Poverty

Author: H. Luke Shaefer, Marybeth Mattingly, Kathryn Edin
Publisher: Stanford Center on Poverty and Inequality
Date: 03/2018

Under the official poverty measure, the poverty rate for women is higher than that for men, although this gender gap shrank slightly in the 1990s. The gender gap in poverty is evident for all gradations of poverty. The share of women in deep poverty, regular poverty, and near poverty is greater than the corresponding share of men. Women also experience higher levels of food insecurity.

Convergence and Disadvantage in Poverty Trends (1980–2010): What is Driving the Relative Socioeconomic Position of Hispanics and Whites? Marybeth J. Mattingly, Juan M. Pedroza

Convergence and Disadvantage in Poverty Trends (1980–2010): What is Driving the Relative Socioeconomic Position of Hispanics and Whites?

Author: Marybeth J. Mattingly, Juan M. Pedroza
Publisher: Race and Social Problems
Date: 03/2018

The gap between white and Hispanic poverty has remained stable for decades despite dramatic changes in the size and composition of the two groups. The gap, however, conceals crucial differences within the Hispanic population whereby some leverage education and smaller families to stave off poverty while others facing barriers to citizenship and English language acquisition face particularly high rates. In this paper, we use Decennial Census and American Community Survey data to examine poverty rates between Hispanic and non-Hispanic, white heads of household. We find the usual suspects stratify poverty risks: gender, age, employment, education, marital status, family size, and metro area status. In addition, Hispanic ethnicity has become a weaker indicator of poverty. We then decompose trends in poverty gaps between racial and ethnic groups. Between 1980 and 2010, poverty gaps persisted between whites and Hispanics. We find support for a convergence of advantages hypothesis and only partial support (among Hispanic noncitizens and Hispanics with limited English language proficiency) for a rising disadvantages hypothesis. Poverty-reducing gains in educational attainment alongside smaller families kept white–Hispanic poverty gaps from rising. If educational attainment continues to rise and family size drops further, poverty rates could fall, particularly for Hispanics who still have lower education and larger families, on average. Gains toward citizenship and greater English language proficiency would also serve to reduce the Hispanic–white poverty gap.

Welfare Reform and the Families It Left Behind H. Luke Shaefer, Kathryn Edin

Welfare Reform and the Families It Left Behind

Author: H. Luke Shaefer, Kathryn Edin
Publisher: Stanford Center on Poverty and Inequality
Date: 01/2018

As early as the year 2000, randomized experiments with programs that were designed to closely resemble welfare reform showed that although the programs reduced poverty overall, they also increased deep poverty. Since that time, research utilizing numerous nationally representative household surveys and other data—using a variety of methods—has documented the stratification of the poor and the rise of disconnected families and $2-a-day poverty. Are these results driven by underreporting in survey data? No. When we control for underreporting, we find that the downward spiral since 1995 is even more dramatic than previously reported. The same is true of findings from SNAP administrative data. Findings from these more robust sources suggest that rather than roughly doubling since welfare reform, $2-a-day poverty tripled or quadrupled. For children in single-mother families, the change is especially dramatic.

Did Welfare Reform Increase Employment and Reduce Poverty? Robert A. Moffitt , Stephanie Garlow

Did Welfare Reform Increase Employment and Reduce Poverty?

Author: Robert A. Moffitt , Stephanie Garlow
Publisher: Stanford Center on Poverty and Inequality
Date: 01/2018

For 60 years, AFDC endured as the country’s best-known cash assistance program for the poor, until Congress replaced it in 1997 with the Temporary Assistance for Needy Families (TANF) program. In a dramatic departure, the new welfare law introduced time limits and work requirements with the goals of encouraging work and discouraging “dependency.” Were those goals realized? There is of course a swirl of opinions on this question. In this article, we review the high-quality research on the law’s effects on work and poverty, with the simple objective of examining whether welfare reform succeeded in reducing dependence on welfare and increasing self-sufficiency.

poverty - CPI Affiliates

David Grusky's picture David Grusky Director, Center on Poverty and Inequality; Professor of Sociology
Stanford University
Kathryn Edin's picture Kathryn Edin Poverty Research Group Leader, Professor of Sociology and Public Affairs
Princeton University
Linda Burton's picture Linda Burton Poverty Research Group Leader, Dean of the Social Sciences
Duke University
David Johnson's picture David Johnson Research Professor, Survey Research Center, Deputy Director, Panel Study of Income Dynamics
University of Michigan
Arloc Sherman's picture Arloc Sherman Senior Fellow
Center on Budget and Policy Priorities

Pages

Poverty - Other Research

Title Author Media
The Changing Safety Net for Low-Income Parents and Their Children: Structural or Cyclical Changes in Income Support Policy? Bradley Hardy, Timothy Smeeding, James P. Ziliak

The Changing Safety Net for Low-Income Parents and Their Children: Structural or Cyclical Changes in Income Support Policy?

Author: Bradley Hardy, Timothy Smeeding, James P. Ziliak
Publisher: Demography
Date: 01/2018

Refundable tax credits and food assistance are the largest transfer programs available to able-bodied working poor and near-poor families in the United States, and simultaneous participation in these programs has more than doubled since the early 2000s. To understand this growth, we construct a series of two-year panels from the 1981–2013 waves of the Current Population Survey Annual Social and Economic Supplement to estimate the effect of state labor-market conditions, federal and state transfer program policy choices, and household demographics governing joint participation in food and refundable tax credit programs. Overall, changing policy drives much of the increase in the simultaneous, biennial use of food assistance and refundable tax credits. This stands in stark contrast from the factors accounting for the growth in food assistance alone, where cyclical and structural labor market factors account for at least one-half of the growth, and demographics play a more prominent role. Moreover, since 2000, the business cycle factors as the leading determinant in biennial participation decisions in food programs and refundable tax credits, suggesting a recent strengthening in the relationship between economic conditions and transfer programs.

The Supplemental Poverty Measure: 2016 Liana Fox

The Supplemental Poverty Measure: 2016

Author: Liana Fox
Publisher: U.S. Census Bureau
Date: 09/2017

In 2016, the overall SPM rate was 13.9 percent. This was 0.6 percentage points lower than the 2015 SPM rate of 14.5 (Figure 1 and Figure 2).

SPM rates were down for children under age 18 and adults aged 18 to 64. SPM rates for individuals aged 65 and older were up, from 13.7 percent in 2015 to 14.5 percent in 2016 (Figure 1 and Figure 2).

The SPM rate for 2016 was 1.2 percentage points higher than the official poverty rate of 12.7 percent (Figure 3).

The percentage of individuals aged 65 and older with SPM resources below half their SPM threshold increased from 4.5 percent in 2015 to 5.2 percent in 2016 (Figure 6 and Appendix Table A-4).

There were 13 states plus the District of Columbia for which SPM rates were higher than official poverty rates, 20 states with lower rates, and 17 states for which the differences were not statistically significant (Figure 7).

Social Security continued to be the most important anti-poverty program, moving 26.1 million individuals out of poverty. Refundable tax credits moved 8.2 million people out of poverty (Figure 8).

Income and Poverty in the United States: 2016 Jessica L. Semega, Kayla R. Fontenot, Melissa A. Kollar

Income and Poverty in the United States: 2016

Author: Jessica L. Semega, Kayla R. Fontenot, Melissa A. Kollar
Publisher: U.S. Census Bureau
Date: 09/2017

Summary of findings:

Real median household income increased 3.2 percent between 2015 and 2016.2 This is the second consecutive annual increase in median household income.

The number of full-time, year-round workers increased by 2.2 million in 2016.

The 2016 female-to-male earnings ratio was 0.805, a 1.1 percent increase from the 2015 ratio. This is the first time the female-to-male earnings ratio has experienced an annual increase since 2007.

The official poverty rate decreased by 0.8 percentage points between 2015 and 2016. At 12.7 percent, the 2016 poverty rate is not statistically different from 2007 (12.5 percent), the year before the most recent recession.

The number of people in poverty fell by 2.5 m

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.

Addressing Child Poverty: How Does the United States Compare With Other Nations? Timothy Smeeding, Catherine Thévenot

Addressing Child Poverty: How Does the United States Compare With Other Nations?

Author: Timothy Smeeding, Catherine Thévenot
Publisher: Academic Pediatrics
Date: 04/2016

Poverty during childhood raises a number of policy challenges. The earliest years are critical in terms of future cognitive and emotional development and early health outcomes, and have long-lasting consequences on future health. In this article child poverty in the United States is compared with a set of other developed countries. To the surprise of few, results show that child poverty is high in the United States. But why is poverty so much higher in the United States than in other rich nations? Among child poverty drivers, household composition and parent's labor market participation matter a great deal. But these are not insurmountable problems. Many of these disadvantages can be overcome by appropriate public policies. For example, single mothers have a very high probability of poverty in the United States, but this is not the case in other countries where the provision of work support increases mothers' labor earnings and together with strong public cash support effectively reduces child poverty. In this article we focus on the role and design of public expenditure to understand the functioning of the different national systems and highlight ways for improvements to reduce child poverty in the United States. We compare relative child poverty in the United States with poverty in a set of selected countries. The takeaway is that the United States underinvests in its children and their families and in so doing this leads to high child poverty and poor health and educational outcomes. If a nation like the United States wants to decrease poverty and improve health and life chances for poor children, it must support parental employment and incomes, and invest in children's futures as do other similar nations with less child poverty.