More About Arloc Sherman

Arloc Sherman

Sherman is a Senior Researcher focusing on family income trends, income support policies, and the causes and consequences of poverty.

Full bio and recent public appearances | Research archive at CBPP.org


Ryan Report Largely Ignores Anti-Poverty Programs’ Long-Term Successes

March 28, 2014 at 12:46 pm

House Budget Committee Chair Paul Ryan’s recent poverty report largely ignores evidence that anti-poverty programs can open doors of opportunity and yield lasting benefits for participants and society as a whole — even when this evidence comes from the same researchers whom the report cites for other purposes.

Here are a few examples:

SNAP (formerly food stamps).  Disadvantaged children born in counties with access to food stamps grew up to be healthier than children in counties without it, according to a major study.  They also were 18 percentage points more likely to finish high school, and girls from these counties rated higher on an index of adult “self-sufficiency” outcomes such as education, income, and staying off welfare.  The Ryan report ignores this evidence, while citing a different study by two of the same researchers on the program’s short-term work disincentives in its early years.

Working family tax credits.  Additional income from the Earned Income Tax Credit (EITC) and Child Tax Credit leads to significant increases in students’ test scores, a study found.  The authors also noted that such test-score gains tend to lead to sizeable improvements in students’ earnings as adults.  While the Ryan poverty report praises the EITC’s work incentives — and cites another study by one of the same researchers on the link between marriage and economic mobility — it ignores this and other research on the EITC’s long-term gains for children.

Head Start.  The Ryan report says that Head Start is “failing to prepare children for school,” citing the lack of measurable differences between Head Start students and a control group during elementary school.  But this conclusion ignores evidence of the program’s long-term benefits.

One study found that former Head Start attendees score higher than their siblings on a “composite index” of long-term outcomes in areas such as education, employment, and health status.  Another  study compared low-income counties that offered varying amounts of Head Start in 1965 (because some counties received more federal help launching the program) and found higher high school graduation and college enrollment and better health outcomes in the Head Start counties decades later for people of the right age to have participated in the program.

Importantly, such long-term gains don’t depend on sustained test-score gains, according to several studies of Head Start and similar interventions.  For example, a review of three leading preschool pilot programs notes that although participants’ test-score gains diminished over time, these participants were much likelier to finish high school and enter college than other students.  The Ryan report cites this study but only to show that the programs benefited girls more than boys.

To be sure, some Head Start programs need improving.  But these studies suggest that recent efforts by the Obama Administration and Congress to strengthen quality and accountability are a better way to go than simply abandoning the Head Start model.

The Ryan report grimly concludes that federal programs are “failing to address” poverty.  Poverty certainly remains too high.  But the report seems determined not to recognize the long-term successes of existing programs even when the evidence is in plain sight.

Emergency Jobless Benefits Cut-Off Has Hit Nearly 200,000 Veterans and Counting

February 28, 2014 at 12:53 pm

Close to 200,000 veterans are among the 2 million unemployed workers who’ve lost access to federal jobless benefits since Congress allowed Emergency Unemployment Compensation (EUC) to expire at the end of last year, CBPP estimates.

EUC provided additional weeks of unemployment benefits to people who were unable to find a new job before exhausting their regular state benefits, which run for up to 26 weeks in most states.  About 1.3 million workers were cut off from EUC when the program expired on December 28, the Labor Department estimates, and another 1.9 million (over 70,000 a week) will exhaust their regular state benefits in the first six months of this year.

We estimate that about 1 in 10 of EUC recipients were veterans (based on the Census Bureau’s March Current Population Survey, which shows that over the last three years, 9.7 percent of unemployment insurance recipients who were looking for work for between 27 and 73 weeks were veterans).  That means about 130,000 veterans were cut off when the program expired December 28 and roughly 7,000 more each week are exhausting their regular benefits and not receiving EUC.  That’s a total of nearly 200,000 veterans by March 1.

Congress should act quickly to reauthorize EUC retroactively.  That would restore benefits to those 200,000 and keep the total number of vets — and other long-term unemployed workers — denied emergency jobless benefits from continuing to grow.

Why a Higher Minimum Wage Is a Net Win for Most Income Groups

February 20, 2014 at 4:20 pm

Here’s a point about the minimum wage that hasn’t received enough attention: A rise to $10.10, from the current $7.25, raises average incomes for roughly the bottom half of all Americans — those with incomes up to $72,300 for a family of four, according to the new Congressional Budget Office (CBO) report on such a proposal.

Yes, as widely reported, CBO estimates that a minimum wage hike to $10.10 would mean the loss of 500,000 jobs (though some top economists, such as Harvard’s Lawrence Katz, estimate smaller or negligible losses), and some business owners and shareholders would have lower profits.  But, even after factoring in those costs, the wage hike would lift 900,000 people out of poverty and most income groups would see net income gains, as the chart shows:

Annual incomes would rise by 2.8 percent — $300 — for families below the official poverty line (which is $24,100 for a family of four) and by somewhat smaller percentages for families between one and three times the poverty line ($72,300 for a family of four).  Together, these two groups comprise roughly the bottom half of the population, according to Census data.  Only families at or above six times the poverty line ($144,600 for a family of four) would be net losers.

With incomes rising at the bottom and shrinking very slightly at the top, income inequality would decline.  That’s no surprise:  two-thirds of workers who would benefit directly are in the poorest half of the population.  CBO estimates that the net impact on the federal budget over the long term would be “small” and uncertain — essentially, zero.

Given what we’re learning about poverty’s large long-term effects on health, education, and economic opportunity, we shouldn’t pass up a chance to help lower-income working families and reduce poverty at no cost to the budget.

2009 Recovery Act Kept Millions out of Poverty

February 18, 2014 at 3:06 pm

The Washington Post points out that the 2009 Recovery Act, signed five years ago yesterday, accomplished much more than its critics acknowledge.  When it comes to using the safety net to keep people out of poverty, for example, the Recovery Act was probably the most effective piece of legislation since the 1935 Social Security Act, as our 2011 analysis explained.

Six Recovery Act provisions — three new or expanded tax credits, two expansions of unemployment insurance, and a SNAP (food stamp) benefit expansion — kept 6.9 million Americans out of poverty in 2010.  This estimate uses an alternative poverty measure based on National Academy of Sciences recommendations (a forerunner to the Supplemental Poverty Measure that the federal government now regularly reports) that considers the effect of government benefit programs and tax credits as well as cash income.

As the graph shows:

  • Expansions in the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) kept 1.6 million people out of poverty.
  • The Making Work Pay tax credit, which expired at the end of 2010, kept another 1.5 million people out of poverty.
  • Expansions in unemployment insurance benefits kept 3.4 million people out of poverty.
  • Expansions in SNAP benefits kept 1 million people out of poverty.

These figures total more than 6.9 million in part because some people were kept above the poverty line by more than one program.  The 6.9 million total, though, counts each person only once.

And, as the graph shows, existing (pre-2009) policies to promote family income also kept millions of Americans out of poverty in 2010.

Moreover, these are just the initial effects of government assistance on recipient households.  They don’t show the ripple effect across the economy as government assistance allowed struggling consumers to continue to buy goods and services, despite the crippling recession, contributing to economic growth.

To be sure, these figures don’t mean that government assistance staved off all, or even most, recession-related hardship.  But they show that government assistance kept millions of Americans above the poverty line during the worst economic downturn since the Great Depression.  That’s no small accomplishment.

The Safety Net Provides a Long-Lasting Boost

January 10, 2014 at 1:30 pm

Child poverty has fallen over the last five decades, as we explained earlier and illustrate in our new chart book.  Those improvements have lasting effects:  researchers are finding that the same safety net programs that have helped reduce child poverty in the short term are also opening doors of opportunity for those children in the long run.

Among the findings:

Food stamps help children fare better for years.  A recent study of what happened when food stamps (now called SNAP) gradually expanded nationwide in the 1960s and early 1970s found that disadvantaged children who had access to food stamps in early childhood and whose mothers had access during their pregnancy had better health and educational outcomes as adults than children who didn’t have access to food stamps.

Among other things, children with access to food stamps were less likely in adulthood to have stunted growth, be diagnosed with heart disease, or be obese.  They also were more likely to graduate from high school (see chart).

The earned income tax credit (EITC) boosts children’s academic performance — and their projected earnings later in life.  For example, raising family income through refundable tax credits (primarily the EITC) makes it more likely that children in the family will attend college and have higher earnings as adults, according to one study.  Another study followed children over a number of decades and found that those in low-income families that received an additional $3,000 in annual income (in 2005 dollars) between the children’s prenatal year and fifth birthday tended to earn an average of 17 percent more as adults, and work 135 hours more annually, than similar children whose families did not receive the added income.

Click here for the full chart book.