Panel: Elevating the Well-Being of Low-Income Families through State and Federal Safety Net Programs
(Poverty and Income Policy)

Saturday, November 10, 2018: 10:15 AM-11:45 AM
McKinley - Mezz Level (Marriott Wardman Park)

*Names in bold indicate Presenter

Panel Chairs:  Nisha Patel, Robin Hood
Discussants:  Jeremie Greer, Prosperity Now and David Newville, Prosperity Now

The Impact of State Earned Income Tax Credit Expansions on Material and Medical Hardships
Olga Kondratjeva, Stephen Roll, Mat Despard and Michal Grinstein-Weiss, Washington University in St. Louis

The Effect of the US Safety Net on Material Hardship over the Past Quarter Century
Signe-Mary McKernan1, Caroline Ratcliffe1 and John Iceland2, (1)Urban Institute, (2)Pennsylvania State University

Using the Tax Code to Help Workers during Recessions
C. Eugene Steuerle, Caleb Quakenbush, Elaine Maag and Philip Stallworth, Urban Institute

The United States government administers a number of safety net programs aimed at reducing poverty among the most vulnerable households, dedicating 19.5% of its total GDP to social spending; for comparison, the OECD average equals 21% (OECD, 2016). Extensive evidence demonstrates the positive effects of state and federal programs on poverty reduction (Tax Policy Center, 2016; Lim 2009; Sherman, 2009). Yet, as programs continue to evolve and expand over time, more up-to-date evidence is needed to inform how policy developments affect social and economic outcomes of program beneficiaries.

The purpose of this panel is to provide evidence around the more recent developments of the key safety net programs, including the Earned Income Tax Credit (EITC), the Temporary Assistance to Needy Families (TANF) program, the Supplementary Nutrition Assistance Program (SNAP), public health insurance (e.g., Medicaid), and Unemployment Insurance, among other programs. The four papers included in this panel offer considerable rigor and methodological diversity in their investigation of state and federal safety net programs.

The first paper examines the effects of Oregon’s Earned Income Credit (OEIC) on the experience of poverty among children in the state of Oregon. Combining several data sources and measures of poverty, the paper finds that an additional 3% of the federal EITC amount implemented in Oregon in 2016 and delivered to families with young children results in a very small reduction in young child poverty. Preliminary evidence also shows that providing the benefits to non-working families could contribute to greater reduction in child poverty.

The second paper examines the impact of state EITC expansions on the experience of material and medical hardships among lower-income workers. Using the most recent tax and survey data between 2013 and 2017, the paper applies a difference-in-differences approach combined with matching estimators to explore the research question. The preliminary findings suggest that changes in state EITC policies help reduce the incidence of hardships in lower-income households.

The third paper investigates the effect of major income-tested programs on material and medical hardships among low-income families with children. The paper applies an instrumental variable approach using the survey data from 1992 through 2011. The preliminary results indicate that the participation in public assistance programs helps alleviate the experience of hardships by low-income households with children.

The fourth paper explores the distributional effects of five fiscal policies aimed specifically at benefiting working families. Using the microsimulation model, the paper finds that Unemployment Insurance delivers the highest average benefits to a small number of recipients. Other tax-based interventions are able to deliver lower average benefits but to the broader population. Notably, the expansion in the federal EITC levels is found to be the most progressive policy.

Taken together, this panel provides a comprehensive overview of the research that explores the effects of major safety net programs on household welfare in the U.S. The focus on a wide range of state and federal programs makes the implications from this panel particularly compelling to policymakers at various levels of government.

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