chronic versus transient poverty: redefining the issues to clarify approaches in policy and practice...
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Chronic versus Transient Poverty:Redefining the issues to clarify
approaches in policy and practice
Sara E. Kimberlin, PhD
Affiliate, Center on Poverty & InequalityStanford University
UC Berkeley School of Social WelfareGrand Challenges in Social Work
March 3, 2014
Why Focus on Poverty Now? War on Poverty 50th anniversary this year – but still 46.5
million poor Americans in 2012
Upstream contributor to many problems addressed by social workers – mental health, physical health, child welfare, homelessness, incarceration
Key challenge for social workers to address, and for scholars to understand to create levers for intervention and policy
Clear that poverty is a Grand Challenge… in fact…
POVERTY
POVERTY
The Power of Problem Definition Different approaches to describing social problems can
bring to light different policy and practice solutions
Breaking down the big problem of poverty into smaller, more manageable pieces can clarify solutions and motivate action
Inspiration: the re-framing of homelessness
Inspiration: Homelessness Re-defined
Early 2000s saw shift in how the problem of homelessness in the U.S. was described and understood:
Introduction of idea of chronic vs. transient homelessness
Chronic = small population using lots of resourcesTransient = larger group with less intensive service needs
Led to shift in funding and practice:
Targeting different services to chronic vs. transient
Focusing more intensive resources on chronic homeless
What would happen if we looked at poverty through the same lens?
Chronic vs. Transient Poverty
Transient Poverty Chronic Poverty
• Associated with poor life outcomes
• Per economic theory, caused by temporary drop in income
• Associated with worse life outcomes
• Per economic theory, caused by lack of assets needed to reliably generate non-poverty income
Relevant to examine chronic and transient poverty separately
Using Data to Analyze the Problem
Seeking data to help design policy and practice solutions to chronic and transient poverty
Examined chronic and transient poverty rates in the United States, during a recent time period representative of the contemporary policy context
Identified differences in size and demographics of chronic vs. transient poor populations
Measured the impact of government benefits, taxes, and other resources/expenses on chronic vs. transient poverty
Methods Data from national Panel Study of Income Dynamics
Biennial survey data 1998 to 2008 with weights
Analytic sample = 8,375 individuals
Partitioned poor population
Chronic poor = poor more than half of years examined (4+ out of 6 yrs)
Transient poor = poor at least one year but not more than half (1-3 out of 6 yrs)
Methods (cont’d)
Used Supplemental Poverty Measure (SPM)
Official Poverty Measure
• Poverty threshold based on 1960s food costs
• Same threshold for all parts of the country
• Family comprises those related by blood or marriage only
• Only counts cash income
Supplemental Poverty Measure
• Poverty threshold based on current spending on basic needs
• Threshold adjusted for cost of living in different areas
• Family includes unmarried partners and their children
• Counts cash income plus non-cash benefits like food stamps and EITC
• Subtracts non-discretionary expenses like child care and medical bills
Results
Total Years in SPM Poverty
Transient Poor18.9%
Chronic Poor2.1%
1 yr 2 yrs 3 yrs 4 yrs 5 yrs 6 yrs0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
12.3%
4.1%
2.5%
1.1%0.7%
0.3%
Source: Author’s calculations from biennial PSID data 1998-2008
90% of poor
10% of poor
Transient Poor (1-3 yrs poor)Chronic Poor (4-6 yrs poor)
Proportion Transient Poor vs. Chronic Poor within Population Ever SPM Poor 1998-2008
Demographics of SPM Poverty: Age
All individuals Working-age adults
Children Seniors0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
2.1%
1.6%
2.5%
5.1%
Chronic Poverty Rates
All individuals Working-age adults
Children Seniors0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
18.9%
16.5%
20.6%
24.2%
Transient Poverty Rates
Demographics of SPM Poverty: Race/Ethnicity/Immigrant Status
All indi-viduals
Hispanic household
head
Black household
head
White household
head
Other race household
head
Immigrant household
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
0.189
0.375
0.31
0.151 0.15
0.332
Transient Poverty Rates
All indi-viduals
Hispanic household
head
Black household
head
White household
head
Other race household
head
Immigrant household
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
0.021
0.098
0.04
0.015
0.090.102
Chronic Poverty Rates
Demographics of SPM Poverty: Family Characteristics
All individuals Children in household
Single mother household
Non-high school graduate household
Adult with disability household
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
18.9% 19.3%
34.2%36.2%
30.4%
Transient Poverty Rates
All individuals Children in household
Single mother household
Non-high school graduate household
Adult with disability household
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
2.1% 2.2%3.1%
8.9%
4.5%
Chronic Poverty Rates
Demographics of Chronic and Transient Poverty
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%Transient Poverty Rates
All ind
ividu
als
Wor
king-
age
adult
s
Childr
en
Senior
s
Hispan
ic ho
useh
old h
ead
Black
hous
ehold
hea
d
Whit
e ho
useh
old h
ead
Other
race
hou
seho
ld he
ad
Imm
igran
t hou
seho
ld
Childr
en in
hou
seho
ld
Single
mot
her h
ouse
hold
Non-h
igh s
choo
l gra
duat
e ho
useh
old
Adult
with d
isabil
ity h
ouse
hold
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
Chronic Poverty Rates
Characteristics that Distinguish Chronic from Transient Poor Used multivariate multinomial logistic regression for full
sample, and multivariate binary logistic regression for poor sample only, to identify characteristics that predict chronic poverty more strongly than transient poverty
Three characteristics emerged: Immigrant household
Adult in HH with long-term disability, in a high housing cost area
Adult in HH with no high school diploma/GED
All three associated with increased risk of transient poverty as well
Suggestive, but further research needed
Impact of Government Benefits
Chronic poverty rate Transient poverty rate0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
18.9% [17.3, 20.4]
Chronic and transient SPM poverty rates, 1998-2008
2.1% [1.4, 2.8]
Chronic poverty rate Transient poverty rate0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Impact of Government Benefits
Chronic and transient SPM poverty rates, 1998-2008,without government benefits
10.8% [9.4, 12.2]
23.9% [21.8, 26.0]
Impact of expenses, benefits, and other resources
Impact of specific resources/expenses on chronic poverty rate
ALL GOVT BENEFITS COMBINED
Social Security
Private pensions and retirement
Housing subsidies
Federal EITC
SNAP (food stamps)
SSI
School lunch
Unemployment insurance
Help from relatives
Child support rec'd
Child Tax Credit (CTC)
WIC
TANF
Worker's compensation
Low Income Home Energy Assistance Program (LIHEAP)
Childcare expenses
Child support paid
State income tax (before credits)
Work expenses (excluding childcare)
Federal income tax (before credits)
FICA (federal payroll tax)
Medical out-of-pocket expenses (MOOP)
-10.00% -8.00% -6.00% -4.00% -2.00% 0.00% 2.00%
ALL GOVT BENEFITS COMBINED
Private pensions and retirement
Social Security
Federal EITC
Unemployment insurance
Help from relatives
SNAP (food stamps)
Child support rec'd
School lunch
Child Tax Credit (CTC)
Worker's compensation
SSI
Housing subsidies
WIC
Low Income Home Energy Assistance Program (LIHEAP)
TANF
Childcare expenses
Child support paid
State income tax (before credits)
Work expenses (excluding childcare)
Federal income tax (before credits)
FICA (federal payroll tax)
Medical out-of-pocket expenses (MOOP)
-6.00% -4.00% -2.00% 0.00% 2.00% 4.00% 6.00%
Impact of expenses, benefits, and other resources
Impact of specific resources/expenses on transient poverty rate
Implications for Policy
Chronic poverty affected a very small population after accounting for existing benefits Might be feasible goal to eliminate remaining chronic poverty Would have cost $15.5B per year through direct cash transfers
(= half of 1% of federal budget outlays) (in 2008 dollars)
Transient poverty affected a larger population, but with less need Could prioritize eliminating transient child poverty Would have cost $13.1B per year through direct cash transfers
(< half of 1% of federal budget outlays) (in 2008 dollars)
Implications for Policy
Somewhat different demographics for chronic and transient poor
Specific benefits (and expenses) had different impacts on chronic versus transient poverty
Suggests opportunity for more deliberate and effective policy targeting to address needs of chronic versus transient poor
E.g. expand housing subsidies to address chronic poverty, reduce medical expenses to lower transient poverty
Implications for Social Work Practice
Differences in duration of poverty and demographics for chronic vs. transient poor suggest somewhat different service needs
For transient poor – one-time assistance to pay unexpected expense or re-establish non-poverty income
For chronic poor – intensive asset building to increase ongoing income, and/or long-term sustained support to meet basic needs
Acknowledgments
The Horowitz Foundation and the Fahs-Beck Fund generously provided dissertation grants to support this research.
Thank you to Census Bureau and Bureau of Labor Statistics staff for providing information about details of SPM methodology.
Special thanks to Thesia Garner at BLS as well as Jane Waldfogel and colleagues at the Columbia Population Research Center, for sharing historical SPM thresholds from their research in progress that were used in this study.
