Abstract:Refundable tax credits and food assistance are the largest transfer programs available to able-bodied working poor and near-poor families in the United States, and simultaneous participation in these programs has more than doubled since the early 2000s. To understand this growth, we construct a series of two-year panels from the 1981–2013 waves of the Current Population Survey Annual Social and Economic Supplement to estimate the effect of state labor-market conditions, federal and state transfer program polic… Show more
“…Over this same period, our social safety net has become less of a stabilizing force for low‐income families (Hardy, ), in part because benefits are often tied to employment and earnings (Hardy et al, ; Hill, Romich, Mattingly, Shamsuddin, & Wething, ; Hoynes & Schanzenbach, ). In addition, large and growing gaps in family wealth have left families with children, particularly Black and Hispanic families, at risk of having insufficient savings or assets to buffer against income changes (Charles & Hurst, ; Darity et al, ; Gibson‐Davis & Percheski, ; Hamilton & Darity, ; McKernan, Ratcliffe, Steuerle, & Zhang, ).…”
Section: Strengthening Social Programs To Promote Economic Stability mentioning
confidence: 99%
“…In addition, large and growing gaps in family wealth have left families with children, particularly Black and Hispanic families, at risk of having insufficient savings or assets to buffer against income changes (Charles & Hurst, ; Darity et al, ; Gibson‐Davis & Percheski, ; Hamilton & Darity, ; McKernan, Ratcliffe, Steuerle, & Zhang, ). … our social safety net has become less of a stabilizing force for low‐income families (Hardy, ), in part because benefits are often tied to employment and earnings (Hardy et al, ; Hill, Romich, Mattingly, Shamsuddin, & Wething, ; Hoynes & Schanzenbach, ).…”
Section: Strengthening Social Programs To Promote Economic Stability mentioning
confidence: 99%
“…… our social safety net has become less of a stabilizing force for low‐income families (Hardy, ), in part because benefits are often tied to employment and earnings (Hardy et al, ; Hill, Romich, Mattingly, Shamsuddin, & Wething, ; Hoynes & Schanzenbach, ).…”
Section: Strengthening Social Programs To Promote Economic Stability mentioning
Economic instability has increased in recent decades and is higher for families with low incomes and Black families. Such instability is thought to be driven primarily by precarious work and unstable family structure. In addition, the social safety net has become less of a stabilizing force for low‐income families, in part because benefits are often tied to employment and earnings. Too much change in economic circumstances may disrupt investments in children, parenting practices, and family routines—particularly if the economic changes are unpredictable, undesired, or not part of upward mobility. Given the considerable evidence that economic circumstances affect child health and development, economic stability can and should be an important goal of multiple policy domains. In this report, we describe economic instability, review the pertinent theories for considering how economic instability might matter to children, and describe ideas for policies that could reduce or moderate instability. We include policies that reduce instability in earnings, use public assistance to stabilize income or reduce material hardship, or enhance parents' capacity to deal with or avoid instability.
“…Over this same period, our social safety net has become less of a stabilizing force for low‐income families (Hardy, ), in part because benefits are often tied to employment and earnings (Hardy et al, ; Hill, Romich, Mattingly, Shamsuddin, & Wething, ; Hoynes & Schanzenbach, ). In addition, large and growing gaps in family wealth have left families with children, particularly Black and Hispanic families, at risk of having insufficient savings or assets to buffer against income changes (Charles & Hurst, ; Darity et al, ; Gibson‐Davis & Percheski, ; Hamilton & Darity, ; McKernan, Ratcliffe, Steuerle, & Zhang, ).…”
Section: Strengthening Social Programs To Promote Economic Stability mentioning
confidence: 99%
“…In addition, large and growing gaps in family wealth have left families with children, particularly Black and Hispanic families, at risk of having insufficient savings or assets to buffer against income changes (Charles & Hurst, ; Darity et al, ; Gibson‐Davis & Percheski, ; Hamilton & Darity, ; McKernan, Ratcliffe, Steuerle, & Zhang, ). … our social safety net has become less of a stabilizing force for low‐income families (Hardy, ), in part because benefits are often tied to employment and earnings (Hardy et al, ; Hill, Romich, Mattingly, Shamsuddin, & Wething, ; Hoynes & Schanzenbach, ).…”
Section: Strengthening Social Programs To Promote Economic Stability mentioning
confidence: 99%
“…… our social safety net has become less of a stabilizing force for low‐income families (Hardy, ), in part because benefits are often tied to employment and earnings (Hardy et al, ; Hill, Romich, Mattingly, Shamsuddin, & Wething, ; Hoynes & Schanzenbach, ).…”
Section: Strengthening Social Programs To Promote Economic Stability mentioning
Economic instability has increased in recent decades and is higher for families with low incomes and Black families. Such instability is thought to be driven primarily by precarious work and unstable family structure. In addition, the social safety net has become less of a stabilizing force for low‐income families, in part because benefits are often tied to employment and earnings. Too much change in economic circumstances may disrupt investments in children, parenting practices, and family routines—particularly if the economic changes are unpredictable, undesired, or not part of upward mobility. Given the considerable evidence that economic circumstances affect child health and development, economic stability can and should be an important goal of multiple policy domains. In this report, we describe economic instability, review the pertinent theories for considering how economic instability might matter to children, and describe ideas for policies that could reduce or moderate instability. We include policies that reduce instability in earnings, use public assistance to stabilize income or reduce material hardship, or enhance parents' capacity to deal with or avoid instability.
“…The 2009 ARRA fiscal policy stimulus (CBO 2012) provided tax cuts and increased spending on income support programs, including benefit increases to the EITC as well as expanded unemployment insurance and SNAP coverage (CBO 2012;Elsby, Hobijn, and Sahin 2010;Hardy, Smeeding, and Ziliak 2016;Monea and Sawhill 2009;Oh and Reis 2012;Ziliak 2011). Proponents of expansionary fiscal policies tout at least two benefits, one of which is enhanced liquidity among disadvantaged families with higher propensities to consume (Fisher, Johnson, and Smeeding 2015).…”
Section: Changes To the Social Safety Net And The Economymentioning
This paper examines the response of safety net transfer and tax programs to earnings and income shocks across recessions since the early 1980s. Safety net programs in the United States are designed to dampen economic instability and maintain basic needs for families. Such programs, including TANF, SNAP (food stamps), and the Earned Income Tax Credit (EITC), have been tested during and between recessions of the past 30 years, including the recent 2007–2009 Great Recession. I use matched data in the March Current Population Survey (CPS) from 1980 to 2012 to estimate pre‐ and post‐transfer income instability over the 1980s, 1990s, and 2000s, as well as across recessions. The results are disaggregated by family structure, race, income, and education. Transfer programs are associated with lowered instability levels and flatter trend growth from 1980 to 2012 among socioeconomically disadvantaged subgroups, while the tax system reduces income instability for families in the top 40th percentile of the income distribution. Although the largest instability reductions occur among the poor, since 1980 the safety net appears less responsive to instability for the bottom income quintile, female‐headed families, and black families. (JEL I38, J63)
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We also tested two additional sample selection criteria: (1) including limiting the sample to families with AGI below 130% of poverty (Hardy et al, 2015), and (2) limiting the sample to families in which the mother has a high school education or less, a non-income-related marker of disadvantage (Evans & Garthwaite, 2014). We present results when these samples are used in Appendices 2 and 3.…”
This study estimates the associations of income with both (self-reported) child protective services (CPS) involvement and parenting behaviors that proxy for child abuse and neglect risk among unmarried families. Our primary strategy follows the instrumental variables (IV) approach employed by Dahl and Lochner (2012), which leverages variation between states and over time in the generosity of the total state and federal Earned Income Tax Credit for which a family is eligible to identify exogenous variation in family income. As a robustness check, we also estimate standard OLS regressions (linear probability models), reduced form OLS regressions, and OLS regressions with the inclusion of a control function (each with and without family-specific fixed effects). Our micro-level data are drawn from the Fragile Families and Child Wellbeing Study, a longitudinal birth-cohort of relatively disadvantaged urban children who have been followed from birth to age nine. Results suggest that an exogenous increase in income is associated with reductions in behaviorally-approximated child neglect and CPS involvement, particularly among low-income single-mother families.
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