Panel Paper: Making It Through a Recession: The Role of Social Support Networks In Fending off Hardship

Friday, November 9, 2012 : 10:05 AM
International B (Sheraton Baltimore City Center Hotel)

*Names in bold indicate Presenter

Gregory Mills, The Urban Institute and Sisi Zhang, Urban Institute

For low-income working families, coping effectively with the instability of one’s income and expenses requires accessing the economic and emotional support that resides in social networks: relatives, friends, neighbors, and community organizations.  These networks can serve to lessen the severity of hardship when economic shocks occur; they can also have a preventive effect, acting at an early stage to avert the financial or emotional stresses that can ultimately lead to hardship.    

This proposed paper will exploit a major research opportunity that presents itself in mid-2012 with the Census Bureau’s release of data from the Adult Well-Being Topical Module administered at Wave 9 of the 2008 panel of the Survey of Income and Program Participation (SIPP).    This is the first SIPP panel for which the Adult Well-Being Topical Module has been administered at multiple intervals: both at Wave 6 (ending in August 2010) and at Wave 9 (ending in August 2011). 

The findings from a recently completed preliminary analysis of the Wave 6 data provide initial empirical support for the proposition that support networks reduce the onset of hardships related to housing, utilities, and health.  These early findings have been estimated on data from households across all income levels.   In multivariate models (controlling for the householder’s age, education, race, ethnicity, and marital status, and the household’s income and net worth), those with stronger social support networks experience a significantly lower incidence of the following indicators of material hardship:  missed housing payment, utility shutoff, phone disconnected, forgone doctor visit, and forgone dentist visit.

The upcoming release of the Wave 9 data will enable a more rigorous analysis, exploiting the longitudinal nature of SIPP.   We will examine the transitions into and out of hardship (between Waves 6 and 9), assessing whether the extent of one’s support network (at Wave 6) has a significant effect on the transitions that occur in the subsequent year.   The multivariate analysis will explore whether these patterns differ across segments of the income distribution.   

The proposed paper will include descriptive tabulations relating to the level of help that individuals expect to receive from family members, friends, and other sources (by household income quintile, from the Wave 6 data) and the findings of the multivariate analysis described above (using Waves 6 and 9).  Separate models will be estimated by income quintile.