Public Programs Keep Millions Out of Poverty, New Study Shows

May 18, 2011 at 4:54 pm

With anti-poverty programs under serious attack in Washington, here’s something to keep in mind: a major new study from the National Bureau of Economic Research (NBER) finds that public programs keep one in six Americans out of poverty — primarily the elderly, disabled, and working poor — and that the poverty rate would double without these programs.

Without the cash and non-cash income provided by programs such as Social Security, SNAP (formerly food stamps), and the Earned Income Tax Credit:

  • The share of Americans below the poverty line in 2004 ($19,307 for a family of four) would have more than doubled, from 13.5 percent to 29 percent.  That is, 45 million more Americans would have been poor.
  • The share of Americans in “deep poverty,” with incomes below half the poverty line, would have more than tripled, to 21 percent.
  • The share of Americans who are poor or near-poor, with incomes below one-and-a-half-times the poverty line, would have risen to about 40 percent.

Public Programs Keep Millions Out of Poverty

The House-passed budget would impose draconian cuts on programs for low- and moderate-income families, ranging from SNAP and Medicaid to rental assistance, Pell Grants, and Head Start.  Current proposals to impose annual limits on federal spending or insert a balanced budget requirement into the U.S. Constitution would force the same kinds of cuts.  Proponents of slashing these programs claim the safety net actually creates more poverty by reducing recipients’ incentives to work.  But, here’s the reality: scaling back these programs would have “almost no” effect on people’s chances of avoiding poverty through greater employment, according to the NBER study.  That means that, on balance, the cuts in the House-passed budget would greatly increase the amount and severity of poverty.

The NBER study also finds that while government help rose for certain low-income groups over the past two decades, it shrank for others — and these cuts triggered a worrisome rise in deep poverty among those who received less assistance.  I’ll write more about that in the coming days.

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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 | Blog Archive | Research archive at CBPP.org

4 Comments Add Yours ↓

Comments are listed in reverse chronological order.

  1. brian #
    1

    Jake,

    I’m not sure that the paper supports your claim about needing to do more to stop folks from ‘gaming the system.’ This is just from the abstract (I haven’t purchased the paper either), but I’m interested in the researchers’ claim that our “system is paternalistic and tilted toward the support of the employed” along with “groups with special needs and perceived deservedness.” It sounds to me like we already do alot — perhaps to the systems detriment? — to keep people from ‘gaming the system.’ It would be nice if we were as worried about bankers ‘gaming the system’ as we are about poor people doing it.

    “…The system reduces poverty the most for the disabled and the elderly and least for several groups among the non-elderly and non-disabled. Over time, we find that expenditures have shifted toward the disabled and the elderly, and away from those with the lowest incomes and toward those with higher incomes, with the consequence that post-transfer rates of deep poverty for some groups have increased. We conclude that the U.S. benefit system is paternalistic and tilted toward the support of the employed and toward groups with special needs and perceived deservingness.”

  2. brian #
    2

    JR’s right! What we need is an invasive eugenics policy to keep them from overpopulating and then really put the screws to ‘em quality-of-life-wise so that they learn to achieve more. I mean, seriously. Since when does poverty mean twenty grand a year? Why don’t ya ever see street urchins anymore, eh? There are plenty of jobs sweepin’ chimneys and shinin’ shoes that would get these kids back to work. And since when are our children too good to work in a coal mine? You know who else we could get down in there? The elderly. What a pack of sponges! I could go on, but I think you get the idea….

  3. Jack Shipley #
    3

    I haven’t purchased the paper, but if you click on the link the summary description does mention behavioral issues. Still, the majority of people receiving aide through a variety of anti-poverty programs are the elderly, disabled and working (WORKING!) poor. One example of the type of aide we as a nation provide is to single parents, mostly women recently divorced. Data indicate that the large majority of these women receive aide for a year before moving on and up. So, essentially, the GOP aims to kick the elderly, disabled and single moms to the curb without so much as an appropriation for tin cups. No doubt work needs to be done to make it less easy to game the system but that work is at the fringes and tossing out anti-poverty programs wholesale is, simply, immoral.

  4. J R #
    4

    It also keeps them overpopulating and underachieving.



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