Panel Paper: Advancing Poverty Measurement: The Antipoverty Effectiveness of the Safety Net in Wisconsin

Saturday, November 10, 2012 : 2:25 PM
Adams (Sheraton Baltimore City Center Hotel)

*Names in bold indicate Presenter

Yiyoon Chung, Institute for Research on Poverty/University of Wisconsin, Julia Isaacs, Urban Institute and Timothy Smeeding, Institute for Research on Poverty

The economic downturn has continued to have negative repercussions in Wisconsin as elsewhere. Following the economic decline that occurred during 2009, Wisconsin experienced continued job reductions in 2010 and no substantial job growth in 2011. The official poverty statistics provided by the Census Bureau reveal that poverty in Wisconsin, based on the American Community Survey (ACS), actually increased in 2010 as compared to 2009, indicating that Wisconsin residents had generally lower levels of pre-tax but post transfer cash resources during the time considered. The Wisconsin Poverty Measure (WPM) is based on the methods  recommended by the NAS for improving poverty measures (Citro  and Michael, 1995) and counts the effects of taxes and noncash benefits for food housing and energy , using a poverty line that is  based on actual consumer behavior .

Given the substantial loss in market income in Wisconsin and the Census bureau estimates, the latest findings of the 2010 Wisconsin Poverty Project, using the WPM based on the 2010 ACS, are quite surprising. When we estimate poverty using our NAS-like Wisconsin Poverty Measure (WPM), we find that poverty in Wisconsin dropped significantly between 2009 and 2010, owing mainly to increased benefits and participation in existing programs, especially SNAP but also the EITC. Child poverty fell substantially using the WPM but remained higher than the overall state average and while elder poverty rose, it remained below average using the WPM.

Our conclusion is that making good use of the existing safety net in tough economic times can help alleviate poverty, as demonstrated by Wisconsin. But the report also shows how economic segregation within a large county, like Milwaukee County,   and including its near suburban counties ,can produce poverty rates that are both significantly higher and lower than those elsewhere in the state.

Full Paper: