Poverty facts causes and consequences
Download
1 / 53

Presentation - Poverty: Facts - PowerPoint PPT Presentation


  • 599 Views
  • Updated On :

Poverty: Facts, Causes and Consequences Hilary Hoynes University of California, Davis California Symposium on Poverty October 2009 In 2008, more than 1 in 6 children lived in poverty and 13.2 percent of all persons were poor. These numbers are expected to be higher in 2009.

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Presentation - Poverty: Facts' - jaden


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
Poverty facts causes and consequences l.jpg

Poverty: Facts, Causes and Consequences

Hilary Hoynes

University of California, Davis

California Symposium on Poverty

October 2009


Slide2 l.jpg

  • In 2008, more than 1 in 6 children lived in poverty and 13.2 percent of all persons were poor.

  • These numbers are expected to be higher in 2009.

  • Government spending on anti-poverty programs in 2008 included $25 b. on TANF, $50 b. on the EITC, and $38 b. on Food Stamps.

  • In this talk, I discuss what we know about the causes of poverty and its consequences for children and families.


Outline l.jpg
Outline percent of all persons were poor.

  • How do we define poverty?

  • Facts: Poverty in the U.S. and in California

  • Impacts of poverty on children and families

  • Causes and how government programs can help


Slide4 l.jpg

  • How do we define poverty? percent of all persons were poor.

  • Facts: Poverty in the U.S. and in California

  • Impacts of poverty on children and families

  • Causes and how government programs can help


What is the official poverty measure l.jpg
What is the Official Poverty Measure? percent of all persons were poor.

  • A family is poor if their family income is less than the federal poverty threshold

    • Poverty lines vary by family size and are adjusted for changes in prices each year

    • Based on the cost of food in the 1960s (mult by 3)

  • Poverty is a family concept—all persons in the same family have the same poverty status

By comparison, 2008 median family income was $52,000.


Concerns about official poverty measure l.jpg
Concerns about official poverty measure percent of all persons were poor.

  • Income measure is pre-tax family income; includes only cash income

    • Does not include Food Stamps or Earned Income Tax Credit

    • Not adjusted for work-related expenses

  • Not adjusted for regional variation in costs of living (e.g., housing)

  • Definition of poverty has not changed since measure developed in early 1960s

  • There are no easy solutions. In this presentation, I use the official measure


Slide7 l.jpg

  • How do we define poverty? percent of all persons were poor.

  • Facts: Poverty in the U.S. and in California

  • Impacts of poverty on children and families

  • Causes and how government programs can help



Official poverty rate for the u s l.jpg
Official Poverty Rate for the U.S. percent of all persons were poor.



U s success in improving poverty varies by age l.jpg
U.S. ‘success’ in improving poverty varies percent of all persons were poor. by age



Female headed households have high poverty rates l.jpg
Female headed households have high poverty rates percent of all persons were poor.


Poverty dramatically declines with education l.jpg
Poverty dramatically declines with education percent of all persons were poor.


Poverty in california l.jpg
Poverty in California percent of all persons were poor.

  • Poverty rates across groups in California mirror the patterns shown for the U.S. as a whole.

  • There are important things to point out for California






Slide20 l.jpg

  • How do we define poverty? California

  • Facts: Poverty in the U.S. and in California

  • Impacts of poverty on children and families

  • Causes and how government programs can help


Slide21 l.jpg


Children who grow up poor are more likely to l.jpg
Children who grow up poor are more likely to countries.

  • Not attend preschool

  • Perform worse in school

  • Drop out of high school, have lower educational attainment

  • (Girls) Have a teen birth

  • (Boys) Be incarcerated

  • Live in poverty as adults

  • Have worse health and shorter life expectancy

    Caution: It is difficult to know the role played by poverty in these correlations. There are many other factors involved.


Slide23 l.jpg

  • How do we define poverty? countries.

  • Facts: Poverty in the U.S. and in California

  • Impacts of poverty on children and families

  • Causes and how government programs can help


1 the labor market l.jpg
(1) The Labor Market countries.

  • As we saw, most poor families contain workers

  • Poverty is very closely tied to the conditions of the labor market

    • Availability of jobs

    • Wages paid at those jobs




Poverty increased more in states that experienced larger increases in unemployment l.jpg
Poverty countries.increased more in states that experienced larger increases in unemployment

Changes from 2000 to 2008


Poverty increased more in states that experienced larger increases in unemployment28 l.jpg
Poverty countries.increased more in states that experienced larger increases in unemployment

CA is here



Wages for less skilled men have been falling since the early 1970s l.jpg
Wages for less skilled men have been falling since the early 1970s

Source: Autor, Katz and Kearney (2008)


No growth in family income at the bottom of the distribution and significant growth at the top l.jpg
No growth in family income at the bottom of the distribution (and significant growth at the top)

Source: Debbie Reed, PPIC



2 government policies that reduce poverty l.jpg
(2) Government policies that reduce poverty guarantee reductions in poverty

(and why)


The earned income tax credit l.jpg
The Earned Income Tax Credit guarantee reductions in poverty

  • Refundable tax credit for working, low-income taxpayers with children (single and married)

  • [Much smaller credit for childless]

  • No credit if no family earnings

  • EITC acts to supplement earnings.

  • Maximum credit for 2009:

    • $3043 for one-child families

    • $5028 for families with two or more children

  • Total cost in 2008 of the EITC is $40 b. compared to $25 b. for TANF and $38 b. for food stamps.



How the eitc reduces poverty l.jpg
How the EITC reduces poverty threshold!

  • Key design feature of EITC (and what distinguishes it from traditional income support programs) is that eligibility requires earned income.

    • The EITC transfers income to low income families with children WHILE encouraging work.

  • The generosity of the EITC increased substantially with tax reforms in 1986, 1990, and 1993.




Slide39 l.jpg


Census estimates of poverty reduction due to eitc 2003 l.jpg
Census estimates of poverty reduction due to EITC, 2003 reduce poverty through two channels:


But the success of the eitc is not measured by official poverty statistics l.jpg
BUT … the success of the EITC is not measured by official poverty statistics

  • Remember our definition of poverty?

  • Poverty is based on PRE-TAX family income

  • EITC operates through the tax system



Cash welfare programs tanf l.jpg
Cash Welfare Programs (TANF) are unlikely to affect poverty

Income support (welfare) programs are unlikely to affect poverty rates for two reasons:

  • Benefit levels are low, unlikely to increase a household’s income over the poverty line.

  • Benefits are targeted on those out of work; thereby discouraging work rather than encouraging it.

    [This does not mean the program is not important or useful. Rather that it simply should not affect poverty rates.]




Slide46 l.jpg
One are unlikely to affect povertycould use TANF to reduce poverty, but funding would have to be about four times the current funding


Slide47 l.jpg


Percent of women working by marital status and children l.jpg
Percent of Women Working reform and the expansion of the EITC led to (by Marital Status and Children)

On the eve of welfare reform and EITC increases, much attention is given to the low employment rates of single mothers.


Percent of women working by marital status and children49 l.jpg
Percent of Women Working reform and the expansion of the EITC led to (by Marital Status and Children)

Beginning in 1992—dramatic increases in employment for single mothers, with little change for other women


Slide50 l.jpg
Expansion of EITC and Welfare Reform has Radically Changed the Landscape for Low Income Families with Children


4 more on government programs l.jpg
(4) More on government programs the Landscape for Low Income Families with Children

  • Food stamps is important (but again not measured in official poverty statistics)

  • Minimum wages are a less targeted policy for reducing poverty (minimum wages not targeted on the poor)


5 demographics and poverty l.jpg
(5) Demographics and poverty the Landscape for Low Income Families with Children

  • Growth in female headed households increases poverty

  • Growth in immigration increases poverty


Concluding remarks l.jpg
Concluding remarks the Landscape for Low Income Families with Children

  • Reducing poverty takes a commitment of resources

  • Improve opportunities

    • Invest in education from early childhood through access to college

  • Encourage work and supplement income:

    • Further expansions of the EITC

    • Provide the necessary work supports (child care)


ad