New evidence shows that our anti-poverty programs, especially Social Security, work well

[underpants]

http://www.latimes.com/business/hiltzik/la-fi-hiltzik-antipoverty-20180507-story.html

A new paper puts the lie to these assertions by showing that the nation's most important anti-poverty efforts all succeed in serving their goals — in the case of Social Security, spectacularly. The authors, Bruce D. Meyer and Derek Wu of the University of Chicago, used administrative statistics from six major programs to demonstrate that five of the six "sharply reduce deep poverty" (that is, income below 50% of the federal poverty line) and the sixth has a "pronounced" impact among the working poor.

The programs that reduce deep poverty are Social Security; Supplemental Security Income; Temporary Assistance for Needy Families (TANF), which is what commonly is known as "welfare"; housing assistance; and food stamps, or SNAP. The sixth is the Earned Income Tax Credit, which helps mostly families that earn around 150% of the poverty line. (That line is about $25,100 in annual income for a family of four.)


The claim that poverty hasn’t gone down since the start of the war on poverty is nonsense.


In each case, Weber and Wu found that the effect of each program has been materially underestimated by traditional measurements. That's because the earlier estimates are based on Census Bureau surveys that underreport benefits from these programs. As a result, the authors say, the effects of food stamps and TANF are underestimated by one-third to one-half, and the impact of Social Security is underestimated by as much as 44%. Their research covered 2008-13, the period of the Great Recession.

An inflation index that overstated price increases over time also tended to minimize the success of the war on poverty, as did a focus on household income rather than consumption, which Meyer and Sullivan suggested was a better indicator of a household's standard of living.


Social Security (OASDI) has the greatest anti-poverty effect on almost all households, followed by food stamps (SNAP), the Earned Income Tax Credit (EITC), and housing assistance. (Meyer and Wu, NBER)



The official poverty rate (blue line) has drastically underestimated the effect of anti-poverty programs according to alternative measurements (green and red lines). (Meyer and Sullivan, Brookings)

[Nitram]

1. This is not news to me, but you'd never learn this from network or cable TV news.