At the margin
Changes in Safety Net Use during the Great Recession
Patricia Anderson, Kristin Butcher & Diane Whitmore Schanzenbach
American Economic Review, May 2015, Pages 161-165
Abstract:
We examine how participation in social safety net programs differs by income-to-poverty levels, and how that relationship changed after the Great Recession. We define income-to-poverty based on the average of 2 years of merged CPS data, and investigate program participation among households with income less than 300 percent of poverty. We find changes in both the level and distribution of safety-net program participation during the Great Recession, with SNAP expanding most at the bottom, the EITC expanding most in the middle, and UI expanding most at the top of the income ranges that we investigate; TANF did not expand.
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Ann Owens
Social Forces, forthcoming
Abstract:
Poverty concentration reflects long-standing inequalities between neighborhoods in the United States. As the poverty concentration paradigm gained traction among policymakers and social scientists, assisted housing policy was overhauled. New assisted housing programs introduced since 1970 have dramatically reduced the geographic concentration of assisted housing units, changing the residential location of many low-income residents. Was this intervention in the housing market enough to reduce poverty concentration? Using national longitudinal data, I find that the deconcentration of assisted housing from 1977 to 2008 only modestly reduced poverty concentration in the 100 largest metropolitan areas. The results are driven by the deconcentration of assisted housing after 2000, when policies had a greater focus on dispersal of assisted housing to low-poverty neighborhoods. My results suggest that even a substantial shift in housing policy cannot make great strides in deconcentrating poverty given the existing landscape of durable urban inequality. Assisted housing policy exists alongside many other structural forces that cluster poor residents in neighborhoods, and these factors may limit its ability to reduce poverty concentration. Moreover, new housing programs rely on the private market to determine the location of assisted units, and the enduring place hierarchy among neighborhoods may influence both where assisted housing is located and its effect on the residential choices of non-assisted residents in ways that undermine poverty deconcentration.
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Intrayear Household Income Dynamics and Adolescent School Behavior
Lisa Gennetian et al.
Demography, April 2015, Pages 455-483
Abstract:
Economic life for most American households is quite dynamic. Such income instability is an understudied aspect of households' economic contexts that may have distinct consequences for children. We examine the empirical relationship between household income instability, as measured by intrayear income change, and adolescent school behavior outcomes using a nationally representative sample of households with adolescents from the Survey of Income and Program Participation 2004 panel. We find an unfavorable relationship between income instability and adolescent school behaviors after controlling for income level and a large set of child and family characteristics. Income instability is associated with a lower likelihood of adolescents being highly engaged in school across the income spectrum and predicts adolescent expulsions and suspensions, particularly among low-income, older, and racial minority adolescents.
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Social Networks and Personal Bankruptcy
Michelle Miller
Journal of Empirical Legal Studies, June 2015, Pages 289–310
Abstract:
This article examines the role of social networks in a household's bankruptcy decision. Social networks may affect a household's bankruptcy decision in many ways: they could provide information about the required paperwork, recommend an attorney, reduce the stigma associated with bankruptcy, or increase awareness of its benefits. Using data from the Panel Study of Income Dynamics (PSID), I exploit county and racial variation to identify network effects. My empirical strategy asks whether being surrounded by others of the same race increases bankruptcy use more for those in racial groups with high filing rates. This methodology allows me to include both county-year and racial-group fixed effects in my regressions. The results strongly confirm the importance of networks in a household's bankruptcy decision.
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Raj Chetty, Nathaniel Hendren & Lawrence Katz
Harvard Working Paper, May 2015
Abstract:
The Moving to Opportunity (MTO) experiment offered randomly selected families living in high-poverty housing projects housing vouchers to move to lower-poverty neighborhoods. We present new evidence on the impacts of MTO on children's long-term outcomes using administrative data from tax returns. We find that moving to a lower-poverty neighborhood significantly improves college attendance rates and earnings for children who were young (below age 13) when their families moved. These children also live in better neighborhoods themselves as adults and are less likely to become single parents. The treatment effects are substantial: children whose families take up an experimental voucher to move to a lower-poverty area when they are less than 13 years old have an annual income that is $3,477 (31%) higher on average relative to a mean of $11,270 in the control group in their mid-twenties. In contrast, the same moves have, if anything, negative long-term impacts on children who are more than 13 years old when their families move, perhaps because of disruption effects. The gains from moving fall with the age when children move, consistent with recent evidence that the duration of exposure to a better environment during childhood is a key determinant of an individual's long-term outcomes. The findings imply that offering families with young children living in high-poverty housing projects vouchers to move to lower-poverty neighborhoods may reduce the intergenerational persistence of poverty and ultimately generate positive returns for taxpayers.
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Living Arrangements, Doubling Up, and the Great Recession: Was This Time Different?
Marianne Bitler & Hilary Hoynes
American Economic Review, May 2015, Pages 166-170
Abstract:
The Great Recession marks the worst downturn since those of the early 1980s. A large literature considers how the public safety net responded to this shock. We instead consider the responsiveness of one dimension of the private safety net. Families can react to negative shocks by moving in with relatives or downsizing. We use across-state over-time variation to estimate the effects of cycles on living arrangements, paying particular attention to young adults. We find living arrangements are cyclical, but effects are small. Surprisingly given the press attention, we find no evidence that things are different in the Great Recession.
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Vanessa Oddo & James Mabli
American Journal of Public Health, June 2015, Pages e30-e35
Objectives: We assessed whether households' participation in the Supplemental Nutrition Assistance Program (SNAP) was associated with improvements in well-being, as indicated by lower rates of psychological distress.
Methods: We used longitudinal data for 3146 households in 30 states, collected between October 2011 and September 2012 for the SNAP Food Security survey, the largest longitudinal national survey of SNAP participants to date. Analyses compared households within days of program entry to the same households approximately 6 months later. We measured psychological distress in the past 30 days on a 6-item Kessler screening scale and used multivariable regression to estimate associations between SNAP participation and psychological distress.
Results: A smaller percentage of household heads exhibited psychological distress after 6 months of participation in SNAP than at baseline (15.3% vs 23.2%; difference = −7.9%). In adjusted models, SNAP participation was associated with a decrease in psychological distress (adjusted relative risk = 0.72; 95% confidence interval = 0.66, 0.78).
Conclusions: Continuing support for federal nutrition programs, such as SNAP, may reduce the public health burden of mental illness, thus improving well-being among vulnerable populations.
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Welfare use and children's longer-term achievement
Shan-Ying Chu & Hau Chyi
Applied Economics, forthcoming
Abstract:
We investigate the effects of mothers' welfare use on children's longer-term performance. To address issues of improper comparison groups and the endogenous nature of welfare participation, we focus on less-educated single mothers and adopt a correction function approach. Data are drawn from the National Longitudinal Survey of Youth 1979 – Children and Young Adult from 1994 to 2010. Estimation results confirm the positive longer-term effects of mothers' welfare use. On average, a child whose mother used welfare in all 20 quarters after childbirth experiences a 0.56-point increase in their yearly high school grade point average, is 12% more likely to graduate from high school and earns $1112.76 more in the first-observed income than a child whose mother does not.
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Lockwood Reynolds & Shawn Rohlin
Journal of Urban Economics, forthcoming
Abstract:
Location-based tax policies are redistributive as evidenced by their placement in distressed areas. However, the previous literature has focused on mean effects which can mask important effects that the program has on the distribution of households. Therefore, we extend the literature by studying changes in the entire household income distribution, in the context of the federal Empowerment Zone (EZ) program. We do not find evidence that the impoverished residents benefited from the program. Our findings are consistent with the areas becoming more attractive to high-income households. The improvements in the areas were concentrated in those portions of each zone that were relatively better-off prior to EZ designation. The results confirm the prior literature findings that the areas, on average, became more attractive but also suggest that the benefits of the program likely did not accrue to the lower-income residents of the EZ areas.
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The Success of SNAP (Food Stamps) and the Desirability of Taxing Food
Steven Sheffrin & Anna Johnson
Tulane University Working Paper, April 2015
Abstract:
Most states either totally or partially exclude food at home from the general sales tax. This exclusion generates a debate between tax policy analysts with their emphasis on broad base, low-rate tax systems against the advocates for the poor who argue that the exemption for food is necessary on distributional grounds. States that do tax food at home are often singled out as having particularly regressive and punitive tax systems. What is missing from this debate is a serious discussion of the consequences of non-taxability of benefits under the Supplemental Nutritional Assistance Program (food stamps). We present evidence that the SNAP program effectively reaches the vast majority of the poor thus making the taxability of food at home much less important for individuals in lower income tiers. Based on calculations using the Consumer Expenditure Survey, we show that the non-taxability of SNAP benefits reduces the regressivity of the sales tax in states that tax food. Overall, including food at home in the sales tax base with a correspondent adjustment of the overall tax rate would be a beneficial change. The paper concludes with a discussion of the political and economic dimensions which may lead food at home to be excluded from the tax base.
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Vehicle Access and Exposure to Neighborhood Poverty: Evidence from the Moving to Opportunity Program
Casey Dawkins, Jae Sik Jeon & Rolf Pendall
Journal of Regional Science, forthcoming
Abstract:
The geographic determinants of social and economic opportunity have received much scholarly attention. A missing link in this body of research is an emphasis on the range of factors influencing low-income households' exposure to neighborhood poverty over time. This paper examines the dynamics of exposure to neighborhood poverty for Moving to Opportunity (MTO) program participants. Our paper is unique in its emphasis on the role of vehicle access as it shapes exposure to neighborhood poverty. We find that vehicle access is an important factor shaping residential spells and transitions to low-poverty neighborhoods over time. We also find that the combined influence of a geographically-targeted residential mobility requirement and vehicle access substantially elevates a household's likelihood of accessing and staying in a low-poverty neighborhood. These findings suggest that residential mobility programs and similar efforts to spatially deconcentrate poverty should pay particular attention to the transportation needs of low-income households.
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Economic Conditions and SSI Applications
Austin Nichols, Lucie Schmidt & Purvi Sevak
University of Michigan Working Paper, December 2014
Abstract:
The Supplemental Security Income (SSI) program provides federally-funded income support for individuals with disabilities, and has become one of the most important means-tested transfer programs in the United States. Previous studies have examined the effects of economic conditions on growth in disability caseloads, but most focus on the Social Security Disability Insurance (SSDI) program. Most work on SSI dates from before welfare reform, which had both direct and indirect effects on the composition of the population at risk for SSI participation. In this paper we examine the relationship between SSI application risk and economic conditions between 1996 and 2010, using data from the Survey of Income and Program Participation (SIPP) linked to the Social Security Administration's 831 file, which includes monthly data on SSI (and SSDI) application and receipt. Results from hazard models suggest that higher state unemployment rates have a large, positive effect on the risk of SSI application among jobless individuals, and our evidence suggests that female potential applicants may be more responsive to local economic conditions than men. State-level TANF policies have no effect on SSI application risk but state fiscal distress significantly increases application risk. Given the continued growth of the SSI program, understanding these relationships is increasingly important and policy-relevant.
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Barry Delin, Ellie Hartman & Christopher Sell
Journal of Disability Policy Studies, June 2015, Pages 54-64
Abstract:
The Social Security Disability Insurance (SSDI) Employment Pilot in Wisconsin was one of four Social Security Administration authorized pilots to test a cash benefit offset feature for the SSDI program. Those allowed to use the offset only lost US$1 of their SSDI cash benefit for every US$2 earned when their monthly earnings reached the Substantial Gainful Activity (SGA) level after completing the Trial Work Period (TWP). Over the first two years following pilot enrollment, no statistically significant differences were observed in employment outcomes between the treatment and control groups. However, after these first two years, outcome trends diverged, ultimately leading to the treatment group exhibiting better outcomes. The differences between treatment and control participants were conditioned on whether participants completed their TWP by the end of 2008. Subsequently, there were statistically significant differences between outcome trends for the two groups of TWP completers. There were virtually no differences between the outcome trends for the groups with no TWP completers. These results are consistent with an interpretation that the cash benefit offset, given adequate time, can be an effective work incentive.