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The Poverty Reduction of Social Security and Means-Tested Transfers

Author

Listed:
  • Bruce D. Meyer
  • Derek Wu

Abstract

This article is the fourth in a series to celebrate the 70th anniversary of the ILR Review. The series features articles that analyze the state of research and future directions for important themes this journal has featured over many years of publication. Starting with Survey of Income and Program Participation (SIPP) data from 2008 to 2013, the authors link administrative data from Social Security and five large means-tested transfers—Supplemental Security Income (SSI), Supplemental Nutrition Assistance Program (SNAP), public assistance (PA), the Earned Income Tax Credit (EITC), and housing assistance—to minimize errors within the SIPP data. Social Security cuts the poverty rate by a third—more than twice the combined effect of the five means-tested transfers. Among means-tested transfers, the EITC and SNAP have the largest effects. All programs except for the EITC sharply reduce deep poverty. The relative importance of these programs differs by family subgroup. SSI, PA, and housing assistance have the highest share of benefits going to the pre-transfer poor, whereas the EITC has the lowest. Finally, the SIPP survey data alone provide fairly accurate estimates for the overall population at the poverty line, though they understate the effects of Social Security, SNAP, and PA. Differences in effects are striking, however, at other income cutoffs and for specific family types.

Suggested Citation

  • Bruce D. Meyer & Derek Wu, 2018. "The Poverty Reduction of Social Security and Means-Tested Transfers," ILR Review, Cornell University, ILR School, vol. 71(5), pages 1106-1153, October.
    • Handle: RePEc:sae:ilrrev:v:71:y:2018:i:5:p:1106-1153
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    Citations

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    Cited by:

    1. Todd Morris, 2022. "The unequal burden of retirement reform: Evidence from Australia," Economic Inquiry, Western Economic Association International, vol. 60(2), pages 592-619, April.
    2. Zachary Parolin, 2019. "The Effect of Benefit Underreporting on Estimates of Poverty in the United States," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 144(2), pages 869-898, July.
    3. Gabrielle Pepin, 2022. "The effects of welfare time limits on access to financial resources: Evidence from the 2010s," Southern Economic Journal, John Wiley & Sons, vol. 88(4), pages 1343-1372, April.
    4. Sarah K. Bruch & Janet C. Gornick & Joseph van der Naald, 2020. "Geographic Inequality in Social Provision: Variation across the US States," NBER Chapters, in: Measuring Distribution and Mobility of Income and Wealth, pages 499-527, National Bureau of Economic Research, Inc.
    5. Marina Gindelsky, 2022. "Do transfers lower inequality between households? Demographic evidence from Distributional National Accounts," Economic Inquiry, Western Economic Association International, vol. 60(3), pages 1233-1257, July.
    6. Diane Whitmore Schanzenbach & Michael R. Strain, 2021. "Employment Effects of the Earned Income Tax Credit: Taking the Long View," Tax Policy and the Economy, University of Chicago Press, vol. 35(1), pages 87-129.
    7. Yan Xin & Dongchuan Wang & Lihui Zhang & Yingyi Ma & Xing Chen & Haiqing Wang & Hongyi Wang & Kangjian Wang & Hui Long & Hua Chai & Jianshe Gao, 2022. "Cooperative analysis of infrastructure perfection and residents’ living standards in poverty-stricken counties in Qinghai Province," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(3), pages 3687-3703, March.
    8. Kyung Min Kang & Robert A. Moffitt, 2019. "The Effect of SNAP and School Food Programs on Food Security, Diet Quality, and Food Spending: Sensitivity to Program Reporting Error," Southern Economic Journal, John Wiley & Sons, vol. 86(1), pages 156-201, July.
    9. Burt S. Barnow & David H. Greenberg, 2019. "Special Issue Editors’ Essay," Evaluation Review, , vol. 43(5), pages 231-265, October.
    10. Korenman, Sanders & Remler, Dahlia K. & Hyson, Rosemary T., 2021. "Health insurance and poverty of the older population in the United States: The importance of a health inclusive poverty measure," The Journal of the Economics of Ageing, Elsevier, vol. 18(C).
    11. Parolin, Zachary & Brady, David, 2018. "Extreme Child Poverty and the Role of Social Policy in the United States," SocArXiv u5ecn, Center for Open Science.
    12. Adam Bee & Joshua Mitchell & Nikolas Mittag & Jonathan Rothbaum & Carl Sanders & Lawrence Schmidt & Matthew Unrath, 2023. "National Experimental Wellbeing Statistics - Version 1," Working Papers 23-04, Center for Economic Studies, U.S. Census Bureau.
    13. Chiara Mussida & Dario Sciulli, 2022. "The dynamics of poverty in Europe: what has changed after the great recession?," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 20(4), pages 915-937, December.
    14. Koen Caminada & Kees Goudswaard & Chen Wang & Jinxian Wang, 2021. "Antipoverty Effects of Various Social Transfers and Income Taxes Across Countries," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 154(3), pages 1055-1076, April.
    15. Luis Ayala & Ana Pérez & Mercedes Prieto-Alaiz, 2022. "The impact of different data sources on the level and structure of income inequality," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 13(3), pages 583-611, September.
    16. Hofmarcher, Thomas, 2021. "The effect of education on poverty: A European perspective," Economics of Education Review, Elsevier, vol. 83(C).
    17. Pablo A. Celhay & Bruce D. Meyer & Nikolas Mittag, 2022. "What Leads to Measurement Errors? Evidence from Reports of Program Participation in Three Surveys," NBER Working Papers 29652, National Bureau of Economic Research, Inc.
    18. Madeline E. Duhon & Edward Miguel & Amos Njuguna & Daniela Pinto Veizaga & Michael W. Walker, 2023. "Preparing for an Aging Africa: Data-Driven Priorities for Economic Research and Policy," NBER Working Papers 31750, National Bureau of Economic Research, Inc.

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