Safety Net Use
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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 Laboratory: The 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?
Featured Examples
Safety Net - CPI Research
| Title | Author | Media | |
|---|---|---|---|
| A Unified Welfare Analysis of Government Policies | Nathaniel Hendren, Ben Sprung-Keyser |
A Unified Welfare Analysis of Government PoliciesAuthor: Nathaniel Hendren, Ben Sprung-KeyserPublisher: Quarterly Journal of Economics Date: 03/2020 We conduct a comparative welfare analysis of 133 historical policy changes over the past half-century in the United States, focusing on policies in social insurance, education and job training, taxes and cash transfers, and in-kind transfers. For each policy, we use existing causal estimates to calculate the benefit that each policy provides its recipients (measured as their willingness to pay) and the policy’s net cost, inclusive of long-term effects on the government’s budget. We divide the willingness to pay by the net cost to the government to form each policy’s Marginal Value of Public Funds, or its ``MVPF''. Comparing MVPFs across policies provides a unified method of assessing their effect on social welfare. Our results suggest that direct investments in low-income children’s health and education have historically had the highest MVPFs, on average exceeding 5. Many such policies have paid for themselves as the government recouped the cost of their initial expenditures through additional taxes collected and reduced transfers. We find large MVPFs for education and health policies among children of all ages, rather than observing diminishing marginal returns throughout childhood. We find smaller MVPFs for policies targeting adults, generally between 0.5 and 2. Expenditures on adults have exceeded this MVPF range in particular if they induced large spillovers on children. We relate our estimates to existing theories of optimal government policy, and we discuss how the MVPF provides lessons for the design of future research. |
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| State of the Union 2019: Policy | Sheldon Danziger |
State of the Union 2019: PolicyAuthor: Sheldon DanzigerPublisher: Stanford Center on Poverty and Inequality Date: 06/2019 A comprehensive policy agenda that could help millennials ... and other generations too. |
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| State of the Union 2019: Poverty and the Safety Net | Marybeth Mattingly, Christopher Wimer, Sophie Collyer, Luke Aylward |
State of the Union 2019: Poverty and the Safety NetAuthor: Marybeth Mattingly, Christopher Wimer, Sophie Collyer, Luke AylwardPublisher: Stanford Center on Poverty and Inequality Date: 06/2019
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| 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 HealthAuthor: Erin T. Bronchetti, Garret S. Christensen, Hilary W. HoynesPublisher: 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. |
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| State of the Union 2018: Safety Net | Linda M. Burton, Marybeth Mattingly, Juan Pedroza, Whitney Welsh |
State of the Union 2018: Safety NetAuthor: Linda M. Burton, Marybeth Mattingly, Juan Pedroza, Whitney WelshPublisher: Stanford Center on Poverty and Inequality Date: 03/2018 Because women have primary responsibility for the care of children, women use social safety net programs more often than men. Gender differences in safety net use cannot be fully explained by gender differences in family type. The obstacles to engaging with the safety net are often greater for single fathers than single mothers, and single mothers are more likely to receive cash and food assistance. Although some of these gender differences are rooted in differences in eligibility and could thus be straightforwardly addressed, others rest on gender norms and other cultural differences that especially stigmatize safety net use among men. |
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safety net - CPI Affiliates
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Karen Jusko |
Safety Net Research Group Leader, Assistant Professor of Political Science |
Stanford University |
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Mark Duggan |
Safety Net Research Group Leader, Trione Director, Stanford Institute for Economic Policy Research, Wayne and Jodi Cooperman Professor of Economics |
Stanford University |
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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 |
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Laura Wheaton |
Senior Fellow |
Urban Institute |
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Francisco Pedraza |
Assistant Professor of Public Policy & Political Science |
University of California, Riverside |
Pages
Safety Net - Other Research
| Title | Author | Media | |
|---|---|---|---|
| Do Unemployment Insurance Benefits Improve Match Quality? Evidence from Recent U.S. Recessions | Ammar Farooq, Adriana D. Kugler, Umberto Muratori |
Do Unemployment Insurance Benefits Improve Match Quality? Evidence from Recent U.S. RecessionsAuthor: Ammar Farooq, Adriana D. Kugler, Umberto MuratoriPublisher: National Bureau of Economic Research Date: 07/2020 We present new evidence on the impact of more generous unemployment insurance (UI) on workers’ ability to find jobs better suited to their skills. Using Longitudinal Employer-Household Dynamics data, we find the UI extensions introduced in the U.S. improved the quality of worker-job matches. Using Current Population Survey data, we also find that longer UI benefit durations decrease the mismatch between workers’ educational attainments and the educational requirements of jobs. We find bigger effects of UI on match quality for those more likely to be liquidity constrained—women, non-whites and less-educated workers—,suggesting UI extensions improve the functioning of the labor market. |
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| A Unified Welfare Analysis of Government Policies | Nathaniel Hendren, Ben Sprung-Keyser |
A Unified Welfare Analysis of Government PoliciesAuthor: Nathaniel Hendren, Ben Sprung-KeyserPublisher: National Bureau of Economic Research Date: 08/2019 We conduct a comparative welfare analysis of 133 historical policy changes over the past half-century in the United States, focusing on policies in social insurance, education and job training, taxes and cash transfers, and in-kind transfers. For each policy, we use existing causal estimates to calculate both the benefit that each policy provides its recipients (measured as their willingness to pay) and the policy’s net cost, inclusive of long-term impacts on the government's budget. We divide the willingness to pay by the net cost to the government to form each policy’s Marginal Value of Public Funds, or its “MVPF”. Comparing MVPFs across policies provides a unified method of assessing their impact on social welfare. Our results suggest that direct investments in low-income children's health and education have historically had the highest MVPFs, on average exceeding 5. Many such policies have paid for themselves as governments recouped the cost of their initial expenditures through additional taxes collected and reduced transfers. We find large MVPFs for education and health policies amongst children of all ages, rather than observing diminishing marginal returns throughout childhood. We find smaller MVPFs for policies targeting adults, generally between 0.5 and 2. Expenditures on adults have exceeded this MVPF range in particular if they induced large spillovers on children. We relate our estimates to existing theories of optimal government policy and we discuss how the MVPF provides lessons for the design of future research. |
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| The Poverty Reduction of Social Security and Means-Tested Transfers | Bruce D. Meyer, Derek Wu |
The Poverty Reduction of Social Security and Means-Tested TransfersAuthor: Bruce D. Meyer, Derek WuPublisher: NBER Date: 05/2018 Many studies examine the anti-poverty effects of social insurance and means-tested transfers, relying solely on survey data with substantial errors. We improve on past work by linking administrative data from Social Security and five large means-tested transfers (SSI, SNAP, Public Assistance, the EITC, and housing assistance) to 2008-2013 Survey of Income and Program Participation data. Using the linked data, we find that Social Security cuts the poverty rate by a third – more than twice the combined effect of the five means-tested transfers. Among means-tested transfers, the EITC and SNAP are most effective. All programs except for the EITC sharply reduce deep poverty (below 50% of the poverty line), while the impact of the EITC is more pronounced at 150% of the poverty line. For the elderly, Social Security single-handedly slashes poverty by 75%, more than 20 times the combined effect of the means-tested transfers. While single parent families benefit more from the EITC, SNAP, and housing assistance, they are still relatively underserved by the safety net, with the six programs together reducing their poverty rate by only 38%. SSI, Public Assistance, and housing assistance have the highest share of benefits going to the pre-transfer poor, while the EITC has the lowest. Finally, the survey data alone provide fairly accurate estimates for the overall population at the poverty line, although they understate the effects of Social Security, SNAP, and Public Assistance. However, there are more striking differences at other income cutoffs and for specific family types. For example, the survey data yield 1) effects of SNAP and Public Assistance on near poverty that are two-thirds and one-half what the administrative data generate and 2) poverty reduction effects of SSI, Social Security, and Public Assistance that are 34-44% of what the administrative data produce for single parent families. |
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| Intergenerational Spillovers in Disability Insurance | Gordon B. Dahl, Anne C. Gielen |
Intergenerational Spillovers in Disability InsuranceAuthor: Gordon B. Dahl, Anne C. GielenPublisher: NBER Date: 02/2018 Does participation in a social assistance program by parents have spillovers on their children's own participation, future labor market attachment, and human capital investments? While intergenerational concerns have figured prominently in policy debates for decades, causal evidence is scarce due to nonrandom participation and data limitations. In this paper we exploit a 1993 policy reform in the Netherlands which tightened disability insurance (DI) criteria for existing claimants, and use rich panel data to link parents to children's long-run outcomes. The key to our regression discontinuity design is that the reform applied to younger cohorts, while older cohorts were exempted from the new rules. We find that children of parents who were pushed out of DI or had their benefits reduced are 11% less likely to participate in DI themselves, do not alter their use of other government safety net programs, and earn 2% more in the labor market as adults. The combination of reduced government transfers and increased tax revenue results in a fiscal gain of 5,900 euros per treated parent due to child spillovers by 2014. Moreover, children of treated parents complete an extra 0.12 years of schooling on average, an investment consistent with an anticipated future with less reliance on DI. Our findings have important implications for the evaluation of this and other policy reforms: ignoring parent-to-child spillovers understates the long-run cost savings of the Dutch reform by between 21 and 40% in present discounted value terms. |
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| 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. ZiliakPublisher: 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. |
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