The Welfare Reforms of the 1990s and the Stratification of Material Well-Being among Low-Income Households with Children

May 2012

H. Luke Shaefer, University of Michigan and Marci Ybarra, University of Chicago

Download '2012-12-npc-working-paper.pdf'.


Abstract

We examine the incidence of material hardship experienced by low-income households with children, before and after the major changes to U.S. anti-poverty programs during the 1990s. We use the Survey of Income and Program Participation (SIPP) to examine a series of measures of household material hardship that were collected in the years 1992, 1995, 1998, 2003 and 2005.  We stratify our sample to differentiate between the 1) deeply poor (<50 percent of poverty), who saw a decline in public assistance over this period; and two groups that saw some forms of public assistance increase: 2) other poor households (50-99 percent of poverty), and 3) the near poor (100-150 percent of poverty). We report bivariate trends over the study period, as well as presenting multivariate difference-in-differences estimates. We find suggestive evidence that material hardship—in the form of difficulty meeting essential household expenses, and falling behind on utilities costs—has generally increased among the deeply poor but has remained roughly the same for the middle group (50-99 percent of poverty), and decreased among the near poor (100-150 percent of poverty). Multivariate difference-in-differences estimates suggest that these trends have resulted in intensified stratification in the material well-being of low-income households with children.



Keywords:
Child Well-being and Child Development, Social Welfare Programs and Policies, Welfare Reform and the Administration of Welfare Programs