Child Poverty, the Great Recession, and the Social Safety Net in the United States

Abstract

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 Hispanic or single heads, or particularly those living with immigrant household heads-or immigrant spouses-experience larger poverty cyclicality than those living with non-Hispanic white or married heads, or those living with 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 the value of public medical benefits. C 2016 by the Association for Public Policy Analysis and Management.

Heterogeneity in the Impact of Economic Cycles and the Great Recession: Effects within and across the Income Distribution

“…we developed our measure of ATTI poverty (Bitler and Hoynes 2010, forthcoming) and estimated the impact of cycles on non-elderly poverty (Bitler and Hoynes forthcoming) and child poverty (Bitler, Hoynes, and Kuka 2014). Here we extend that work in several ways.…”

Weathering the Storm: Social Policy and the Great Recession

“…However, the GR also revealed the failure of safety nets to meet the needs of immigrant households (Bitler et al, 2017;Chzhen, 2017). Especially in the United States, this limitation is not accidental (Fox, 2016).…”

“…They note that the generosity of these policies had been enhanced since 2000, and was further enhanced in response to the GR. Bitler et al (2017) used state-level data to analyze the robustness of the social safety net in relation to the income distribution and selected household characteristics. Focusing on social insurance (OASDI and UI) and means-tested tax (EITC and CTC) and transfer programs (including SNAP, SSI, TANF, energy assistance, housing assistance, and school meals), Bitler et al (2017) found that the social safety net mitigated poverty during the GR, as losses in private income were offset by the social safety net.…”

Concurrent Participation in Federally-Funded Welfare Programs and Empowerment Toward Economic Self-Sufficiency

“…Although heralded as the most significant piece of welfare legislation since the Social Security Act (SSA) of 1935, TANF has constantly been the subject of vehement controversies among researchers as studies of its effectiveness have yielded mixed results. Despite early success claims (Bitler, Hoynes & Kuka, 2014), there has been a growing concern in the literature about the effectiveness of the program in helping lowincome families reach self-sufficiency (Aratani & Aber, 2014;Ozawa & Yoon, 2005;Sheely, 2012).…”

“…In Furthermore, the American welfare state is bifurcated into a two-tiered system: an upper-tier and a lower-tier (Howard, 1999;Sherraden, 1991, p. 53 Recipients of these benefits are often stigmatized in the eyes of the public (Howard, 1999;Sherraden, 1991, p. 53) This chapter pinpointed the most significant antipoverty policy prescriptions designed and implemented under the auspices of the federal government. (Aratani et al, 2014;Banerjee & Damman, 2013;Bitler et al, 2014;Bloom, Loprest, & Zedlewski, 2011;Rodgers & Tedin, 2006;Sheely, 2012;Siegel, Green, Abbott, Mogul, & Patacsil, 2004). A similar trend is followed with studies related to the Supplemental Nutrition Program for Women, Infants, and…”