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
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: Poverty Linda M. Burton, Marybeth Mattingly, Juan Pedroza, Whitney Welsh

State of the Union 2017: Poverty

Author: Linda M. Burton, Marybeth Mattingly, Juan Pedroza, Whitney Welsh
Publisher: Stanford Center on Poverty and Inequality
Date: 06/2017

Though some gaps have narrowed, there remain substantial racial-ethnic differences in poverty, with blacks and Native Americans continuing to experience the highest poverty rates, Hispanics following with slightly lower rates, and whites and Asians experiencing the lowest poverty rates. The sizes of these racial-ethnic gaps often differ substantially by region, with black women in the rural South, for example, facing poverty rates as high as 37 percent.

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.

Can Poverty in America Be Compared to Conditions in the World’s Poorest Countries? H. Luke Shaefer, Pinghui Wu, Kathryn Edin

Can Poverty in America Be Compared to Conditions in the World’s Poorest Countries?

Author: H. Luke Shaefer, Pinghui Wu, Kathryn Edin
Publisher:
Date: 07/2016

Some contend that the American poor are affluent by international standards, and recent survey evidence finds that Americans have deeply divided views about the conditions faced by the poor in this country. To what extent can poverty in the United States be compared to conditions in the world’s poorest nations? Few analysts have examined this question beyond “instrumental”measures of poverty such as income and consumption that only indirectly capture well­being (Sen, 1999). The current paper uses available evidence to examine this question based on four direct indicators of wellbeing: 1) life expectancy; 2) infant mortality; 3) risk of homicide, and 4) risk of incarceration. By these metrics, well­being is highly stratified in the U.S. Among Americans at the bottom of the economic ladder, quality of life looks similar to what is experienced in countries with pe r­capita economic output that is a small fraction of that in the U.S.

poverty - CPI Affiliates

Arloc Sherman's picture Arloc Sherman Senior Fellow
Center on Budget and Policy Priorities
Charles Varner Associate Director, Center on Poverty and Inequality; Pathways Senior Editor
Stanford University
Christopher Jencks's picture Christopher Jencks Malcolm Wiener Professor of Social Policy, Emeritus
Harvard University
H. Luke Shaefer's picture H. Luke Shaefer Associate Professor of Social Work and of Public Policy; Faculty Associate, Survey Research Center; Faculty Associate, Population Studies Center, Institute for Social Research
University of Michigan
Janet Gornick's picture Janet Gornick Professor of Political Science and Sociology; Director, Stone Center on Socio-Economic Inequality; Director, US Office of LIS (Cross-National Data Center in Luxembourg)
The Graduate Center, City University of New York

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Poverty - Other Research

Title Author Media
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.

Including Health Insurance in Poverty Measurement: The Impact of Massachusetts Health Reform on Poverty Sanders Korenman, Dahlia K. Remler

Including Health Insurance in Poverty Measurement: The Impact of Massachusetts Health Reform on Poverty

Author: Sanders Korenman, Dahlia K. Remler
Publisher: NBER
Date: 02/2016

We develop and implement what we believe is the first conceptually valid health-inclusive poverty measure (HIPM)—a measure that includes health care or insurance in the poverty needs threshold and health insurance benefits in family resources—and we discuss its limitations. Building on the Census Bureau’s Supplemental Poverty Measure, we construct a pilot HIPM for the under-65 population under ACA-like health reform in Massachusetts. This pilot is intended to demonstrate the practicality, face validity and value of a HIPM. Results suggest that public health insurance benefits and premium subsidies accounted for a substantial, one-third reduction in the poverty rate. Among low-income families who purchased individual insurance, premium subsidies reduced poverty by 9.4 percentage points.

Changing Family Structures Play a Major Role in the Fight Against Poverty Lawrence Aber, Stuart Butler, Sheldon Danziger, Robert Doar, David T. Ellwood, Judith M. Gueron, Jonathan Haidt, Ron Haskins, Harry J. Holzer, Kay Hymowitz, Lawrence Mead, Ronald Mincy, Richard V. Reeves, Michael R. Strain, Jane Waldfogel

Changing Family Structures Play a Major Role in the Fight Against Poverty

Author: Lawrence Aber, Stuart Butler, Sheldon Danziger, Robert Doar, David T. Ellwood, Judith M. Gueron, Jonathan Haidt, Ron Haskins, Harry J. Holzer, Kay Hymowitz, Lawrence Mead, Ronald Mincy, Richard V. Reeves, Michael R. Strain, Jane Waldfogel
Publisher: AEI-Brookings Working Group on Poverty and Opportunity
Date: 12/2015

Improving the family environment in which children are raised is vital to any serious effort to reduce poverty and expand opportunity.  Twenty-five years of extensive and rigorous research has shown that children raised in stable, secure families have a better chance to flourish.

The family structure in and of itself is an important factor in reducing poverty: children raised in single-parent families are nearly five times as likely to be poor as those in married-couple families.

In Chapter 3 of a new report from the AEI-Brookings Working Group on Poverty and Opportunity, the Working Group recommends policies that:

  1. Promote marriage as the most reliable route to family stability and resources;
  2. Promote delayed, responsible childbearing;
  3. Promote parenting skills and practices, especially among low-income parents; and
  4. Promote skill development, family involvement, and employment among young men as well as women.
Compounded Deprivation in the Transition to Adulthood: The Intersection of Racial and Economic Inequality Among Chicagoans, 1995–2013 Kristin L. Perkins, Robert J. Sampson

Compounded Deprivation in the Transition to Adulthood: The Intersection of Racial and Economic Inequality Among Chicagoans, 1995–2013

Author: Kristin L. Perkins, Robert J. Sampson
Publisher: RSF: The Russell Sage Foundation Journal of the Social Sciences
Date: 11/2015

This paper investigates acute, compounded, and persistent deprivation in a representative sample of Chicago adolescents transitioning to young adulthood. Our investigation, based on four waves of longitudinal data from 1995 to 2013, is motivated by three goals. First, we document the prevalence of individual and neighborhood poverty over time, especially among whites, blacks, and Latinos. Second, we explore compounded deprivation, describing the extent to which study participants are simultaneously exposed to individual and contextual forms of deprivation—including material deprivation (such as poverty) and social-organizational deprivation (for example, low collective efficacy)—for multiple phases of the life course from adolescence up to age thirty-two. Third, we isolate the characteristics that predict transitions out of compounded and persistent poverty. The results provide new evidence on the crosscutting adversities that were exacerbated by the Great Recession and on the deep connection of race to persistent and compounded deprivation in the transition to adulthood.

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.