Research

To measure poverty, incomes must be made equivalent across households with different structures. In this paper, we use a very flexible ordered response model to analyze the relationship between income, demographic structure, and subjective assessments of financial wellbeing drawn from the 1991-2008 British Household Panel Survey. Our results suggest the existence of large-scale economies within marital/cohabiting couples, but substantial diseconomies from the addition of children or further adults. This pattern contrasts sharply with commonly-used equivalence scales and is consistent with explanations in terms of the capital requirements associated with additions to the core couple.

Using data from the Panel Study on Income Dynamics (PSID), this small grant conducted three studies designed to increase understanding of food-related hardships among older Americans. Study 1 found that persons who had a work limitation or were food insecure in midlife (ages 40-54) had significantly increased odds (OR: 2.20, p<.05 and OR: 4.23, p<.01, respectively) of living in a food insecure household at age 60 to 69, holding all else constant. Those who worked more during midlife had significantly reduced odds (OR: 0.26, p<.01) of living in a food insecure household in their 60s. Study 2 found that older adults who were currently living in a food secure household had higher odds of healthy aging at age 60 to 69. Having higher midlife income or more time employed in midlife was associated with increased odds of healthy aging, while having a work limitation or a limiting health condition in midlife was associated with lower odds of healthy aging.  Study 3 used an instrumental variable approach to examine the probability of living in a food insecure household among households as their family units receive Social Security at retirement age. Study 3 found limited causal evidence that receipt of Social Security at retirement age is associated with an increased probability of living in a food secure household among the full population. These findings were robust to changes of the dependent variable or the endogenous variable but were sensitive to some of the expansions or contractions of the sample.

Using data from the Panel Study on Income Dynamics (PSID), this small grant conducted three studies designed to increase understanding of food-related hardships among older Americans. Study 1 found that persons who had a work limitation or were food insecure in midlife (ages 40-54) had significantly increased odds (OR: 2.20, p<.05 and OR: 4.23, p<.01, respectively) of living in a food insecure household at age 60 to 69, holding all else constant. Those who worked more during midlife had significantly reduced odds (OR: 0.26, p<.01) of living in a food insecure household in their 60s. Study 2 found that older adults who were currently living in a food secure household had higher odds of healthy aging at age 60 to 69. Having higher midlife income or more time employed in midlife was associated with increased odds of healthy aging, while having a work limitation or a limiting health condition in midlife was associated with lower odds of healthy aging.  Study 3 used an instrumental variable approach to examine the probability of living in a food insecure household among households as their family units receive Social Security at retirement age. Study 3 found limited causal evidence that receipt of Social Security at retirement age is associated with an increased probability of living in a food secure household among the full population. These findings were robust to changes of the dependent variable or the endogenous variable but were sensitive to some of the expansions or contractions of the sample.

I survey key developments in applied and theoretical research on poverty rates and poverty gaps over the past two decades, and provide a detailed analysis of poverty trends across of variety of income measures and poverty indexes. Included is an extensive summary of how poverty thresholds and economic resources are measured and several proposed recommendations for revision. In addition I discuss axiomatically derived alternatives to the standard poverty rate that provide estimates not only of the incidence of poverty, but also the intensity and the inequality of poverty. The empirical analysis shows that while poverty rates fell in the late 1990s, deep poverty held steady and even rose for broad income measures that include the usual private and public income sources along with in-kind transfers such as food stamps and subsidized housing, and tax credits such as the EITC. I conclude with a discussion of a number of new challenges facing poverty measurement, especially issues of data quality in the Current Population Survey, and recommendations for future research and policy on poverty measurement.

Low- and moderate-income (LMI) households with children often face considerable difficulties in ensuring enough financial resources for an adequate diet. This project investigates the use of financial services and other financial decisions parents make that may affect the risk of very low food security and food insecurity of children. With households in both the December 2008 Current Population Survey (CPS) Food Security Supplement and the January 2009 CPS Unbanked and Underbanked Supplement, the project studies the relationship between bank account ownership, use of alternative financial service (AFS) providers, the organization of household finances, and the food security of children. Both children in unbanked households and those in households that use AFS products are more likely to experience very low food security and food insecurity than other households. Children in previously banked households face extremely high risk of food insecurity. Children in households that use AFS products that provide credit are more likely to experience very low food security than households using AFS product for basic financial transaction services. Large associations exist between the use of AFS products providing credit and child food insecurity but only pawn borrowing appears to have a causal effect. Couples that share at least some finances and jointly participate in financial decisions reduce the risk of child food insecurity. Evidence suggests that improved financial literacy and management skills could improve outcomes. Policies to eliminate childhood hunger should include a multifaceted approach that includes financial education, appropriate bank accounts, and access to low-cost credit.

The Supplemental Nutrition Assistance Program (SNAP; formerly known as food stamps) can have important impacts that extend beyond its intended aims to improve food security and nutrition, particularly for health and health care use. This project examined the impact of SNAP receipt and benefit level on the health of adults and children using two natural experiments to address selection bias: 1) state policy variation in SNAP in an instrumental variables (IV) analysis; and, 2) the temporary expansion of SNAP benefits and eligibility provided through the American Recovery and Reinvestment Act (ARRA) in a difference-in-difference (DD) approach. We used restricted data from the National Health Interview Survey (NHIS) from 2008 to 2014, restricting our sample to persons in SNAP-eligible and low-income SNAP-ineligible households. The IV analysis suggests that SNAP receipt is associated with improved health and reductions in foregone medical care due to affordability among adults and children. However, we find little evidence that ARRA’s temporary benefit increase led to any changes in health or health care use. Whereas SNAP receipt may improve health and health care use for populations close to the eligibility threshold (and thus induced to participate by some policies), the relatively small increase and reduction in SNAP benefits may not have been substantial enough to change health outcomes.

Whether Supplemental Nutrition Assistance Program (SNAP) benefits are adequate to provide food security for eligible households is an important and timely policy question. While the nominal value of SNAP benefits is fixed across states (except for Hawaii and Alaska), variation in food prices across geographic areas is dramatic, and the real value of SNAP benefits varies widely across the U.S. Our research provides new evidence on geographic variation in the adequacy of SNAP benefits to purchase the Thrifty Food Plan (TFP). Using multiple methods to estimate the cost of the Thrifty Food Plan (TFP) faced by households across the nation, and several measures of the SNAP benefits available to them, we consistently find that a substantial fraction of SNAP-recipient households receive benefits that are insufficient to purchase the TFP. Our primary estimates indicate that SNAP benefits (plus 30 percent of income) are insufficient for approximately 20-30 percent of households to purchase the TFP. Sufficiency rates increase monotonically as we expand the distance within which the household is assumed to be able to shop. For households who are unable to afford the TFP, average dollar shortfalls between the cost of the TFP and SNAP benefits (plus 30 percent of income) are often as large as $150 per month. When shoppers are assumed to be able to purchase the TFP at the minimum-cost store in the area, SNAP benefits are sufficient for over 90 percent of households. However, this assumption seems unlikely to hold for many SNAP households.

Leading up to the passage of the 1996 welfare reform, there was much speculation and debate over the possibility that states would \race to the bottom" in setting welfare generosity if given more control over their individual programs. In the fteen years after welfare reform, did such a race to the bottom ensue? Using a spatial dynamic econometric approach, I investigate welfare competition across multiple policy instruments and across three distinct welfare periods -- the AFDC regime, the experimental waiver period leading up to the reform, and the TANF era. Results suggest strategic policy setting occurs over multiple dimensions of welfare including the effective benefit level and the effective tax rate applied to recipient's earned income. Furthermore, strategic behavior appears to have increased over time, consistent with a race to the bottom after welfare reform. However, once controlling for own past policies, little evidence of cross-state strategic policy setting is found for the maximum benefit level.

This study contrasts partial and full family work sanctions by examining their administration in Texas, a state that initially imposed a partial benefit sanction, and then changed to full benefit sanctions. Using administrative fair hearing data, this study uses a qualitative research design to examine how full and partial sanctions may differ, and how front line workers administer both types of sanctions. This study found that recipients’ reasons for not complying with work rules were similar under both regimes and that full family sanctions did not provide an increased incentive to overcome obstacles and barriers to work. Workers responses under both regimes were also very similar, with workers creating the welfare-to-work version of an eligibility-compliance culture. The findings of this study suggest that a better balance between supports and sanctions is needed. 

Social policy, such as the legalization of abortion and the federal bans on lead in the 1970s, has been shown to significantly impact crime rates. With recent increases in juvenile arrests and violent crime rates, we explore whether further social policy—namely the 1996 Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) welfare reform—has had an impact on crime. Our results suggest that stricter work requirements experienced by 13 to 15 year-olds increase their violent crime activity 2 to 4 years later. An increase of one standard deviation in the severity of the work requirement policy results in 5.5 more annual violent crime arrests per capita, an 14.5 percent increase. These results indicate that states should consider options for mitigating these effects, such as support services targeted at teenagers, when implementing the stricter federal work requirements outlined in the Deficit Reduction Act (DRA) of 2005. Conversely, we find no effect of welfare work requirements on juvenile property crime arrests, consistent with the literature on crime and delinquency among juveniles of low-socioeconomic status.

We estimate the effect of welfare reform on the intergenerational transmission of welfare participation and related economic outcomes using a long panel of mother-daughter pairs over the survey period 1968-2013 in the Panel Study of Income Dynamics. Because states implemented welfare reform at different times starting in 1992, the cross-state variation over time permits us to quasi-experimentally separate out the effect of mothers’ welfare participation during childhood on daughters’ economic outcomes in adulthood in the pre- and post-welfare reform periods. We find that a mother’s welfare participation increased her daughter’s odds of participation as an adult by roughly 30 percentage points, but that welfare reform attenuated this transmission by at least 50 percent, or at least 30 percent over the baseline odds of participation. While we find comparable-sized transmission patterns in daughters’ adult use of the broader safety net and other outcomes such as educational attainment and income, there is no diminution of transmission after welfare reform. These results are obtained by addressing nonrandom selection into welfare and are robust to other potential threats to identification from misclassification error, life-cycle age effects, and cross-state mobility.

Capturing the conditions of children of color living in single-parent families has become more complex due to the growing presence of interracial households. This analysis assesses the size and poverty status of single-female headed families housing multiracial children. Using data from the 2000 Census, we find that 9 percent of female-headed families house either children who are classified with more than one race or are classified as a single race different than their mother’s compared to only 3 percent of married couple families. Logistic regression analyses assessing the odds of poverty status for families finds that being a multiracial family does not constitute a uniform advantage or disadvantage for female headed households. Rather, these families, like most families of color, are more likely to experience poverty than white monoracial families. The two exceptions are White multiracial families who are more likely to be in poverty relative to this reference group and Asian multiracial families who have similar poverty rates as white monoracial families (and a lower rate than Asian monoracial families).

One in seven Americans received assistance from SNAP in FY 2012, which is a rate 141 percent higher than in FY 2000, but only 59 percent higher than in FY 1980. In this paper, I describe the socioeconomic and policy climate in recent decades that had bearing on SNAP participation, along with a formal empirical analysis of those determinants and detailed simulations of the relative contributions of the economy, policy, and demographics to changes in SNAP participation over time. The results suggest that SNAP is operating effectively as an automatic fiscal stabilizer—nearly 50 percent of the increase in participation from 2007-2011 is due to the weak economy—but policy reforms expanding access and benefit generosity also affected participation, accounting for nearly 30 percent of the increase after the Great Recession. The changing demographics of the American household are helping restrain growth in SNAP.