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
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.

Family Ruptures, Stress, and the Mental Health of the Next Generation Petra Persson, Maya Rossin-Slater

Family Ruptures, Stress, and the Mental Health of the Next Generation

Author: Petra Persson, Maya Rossin-Slater
Publisher: NBER
Date: 05/2016

This paper studies how in utero exposure to maternal stress from family ruptures affects later mental health. We find that prenatal exposure to the death of a maternal relative increases take-up of ADHD medications during childhood and anti-anxiety and depression medications in adulthood. Further, family ruptures during pregnancy depress birth outcomes and raise the risk of perinatal complications necessitating hospitalization. Our results suggest large welfare gains from preventing fetal stress from family ruptures and possibly from economically induced stressors such as unemployment. They further suggest that greater stress exposure among the poor may partially explain the intergenerational persistence of poverty.

poverty - CPI Affiliates

David Johnson's picture David Johnson Research Professor, Survey Research Center, Deputy Director, Panel Study of Income Dynamics
University of Michigan
Michelle Wilde Anderson Professor of Law; Pathways Editorial Board Member
Stanford University
Harold R. Kerbo's picture Harold R. Kerbo Professor of Sociology
California Polytechnic State University
Chris Wimer Co-Director, Center on Poverty and Social Policy
Columbia University
Haya Stier's picture Haya Stier Professor of Sociology and of Labor Studies
Tel Aviv University

Pages

Poverty - Other Research

Title Author Media
The Economic Lives of the Poor Banerjee, Abhijit, Ester Duflo

The Economic Lives of the Poor

Author: Banerjee, Abhijit, Ester Duflo
Publisher: Journal of Economic Perspectives
Date: 10/2006
Poverty Traps Bowles, Samuel , Steven N. Durlauf, Karla Ruth Hoff

Poverty Traps

Author: Bowles, Samuel , Steven N. Durlauf, Karla Ruth Hoff
Publisher: Princeton University Press
Date: 03/2006
The Changing Face of Inequality in Home Mortgage Lending Williams, Richard, Reynold Nesiba, Eileen Diaz McConnell

The Changing Face of Inequality in Home Mortgage Lending

Author: Williams, Richard, Reynold Nesiba, Eileen Diaz McConnell
Publisher: Social Problems
Date: 01/2005
Housing and Wealth Inequality: Racial-Ethnic Differences in Home Equity in the United States Lauren J. Krivo and Robert L Kaufman

Housing and Wealth Inequality: Racial-Ethnic Differences in Home Equity in the United States

Author: Lauren J. Krivo and Robert L Kaufman
Publisher: Demography
Date: 08/2004
Flexible Firms and Labor Market Segmentation: Effects of Workplace Restructuring on Jobs and Workers Arne. L. Kalleberg

Flexible Firms and Labor Market Segmentation: Effects of Workplace Restructuring on Jobs and Workers

Author: Arne. L. Kalleberg
Publisher: Work and Occupations
Date: 05/2003