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The More Things Change, the More They Stay the Same: The Safety Net, Living Arrangements, and Poverty in the Great Recession

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  • Marianne Bitler
  • Hilary Hoynes

Abstract

Much attention has been given to the large increase in safety net spending, particularly in Unemployment Insurance and Food Stamps, during the Great Recession. In this paper we examine the relationship between poverty, the social and private safety net, and business cycles historically and test whether there has been a significant change in this relationship during the Great Recession. This analysis yields several important findings. First, the relationship between unemployment and official cash poverty remained remarkably consistent with historical patterns during the Great Recession. Second, the safety net programs receiving the most attention through the Great Recession (Food Stamps and UI) exhibit adjustments very consistent with their behavior during previous historical cycles. The most dramatic change in the safety net is the post-welfare reform decline of cash assistance in providing protection for the most disadvantaged. Third, changes in living arrangements are modest and for the most part in line with prior cycles. Thus on balance we find, as our title suggests, that despite the attention to the apparent differences in the responses of the private and social safety nets in the Great Recession, the relationship between cycles and economic well-being are as we would have predicted from the historical patterns.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 19449.

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Date of creation: Sep 2013
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Publication status: Forthcoming: The More Things Change, the More They Stay the Same: The Safety Net, Living Arrangements, and Poverty in the Great Recession , Marianne Bitler, Hilary Hoynes. in The Labor Market in the Aftermath of the Great Recession , Mas and Card. 2014
Handle: RePEc:nbr:nberwo:19449

Note: CH LS PE
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References

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  1. Bruce D. Meyer & Wallace K. C. Mok & James X. Sullivan, 2009. "The Under-Reporting of Transfers in Household Surveys: Its Nature and Consequences," NBER Working Papers 15181, National Bureau of Economic Research, Inc.
  2. Yonatan Ben-Shalom & Robert A. Moffitt & John Karl Scholz, 2011. "An Assessment of the Effectiveness of Anti-Poverty Programs in the United States," NBER Working Papers 17042, National Bureau of Economic Research, Inc.
  3. Jim C. Ohls & Thomas M. Fraker & Alberto P. Martini & Michael Ponza, 1992. "The Effects of Cash-Out on Food Use by Food Stamp Program Participants in San Diego," Mathematica Policy Research Reports 1253, Mathematica Policy Research.
  4. David M. Cutler & Lawrence F. Katz, 1991. "Macroeconomic Performance and the Disadvantaged," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(2), pages 1-74.
  5. Bruce D. Meyer & James X. Sullivan, 2012. "Identifying the Disadvantaged: Official Poverty, Consumption Poverty, and the New Supplemental Poverty Measure," Journal of Economic Perspectives, American Economic Association, vol. 26(3), pages 111-36, Summer.
  6. Thomas M. Fraker & Alberto P. Martini & James C. Ohls & Michael Ponza & Elizabeth A. Quinn, 1992. "The Evaluation of the Alabama Food Stamp Cash-out Demonstration. Vol. 1: Recipient Impacts," Mathematica Policy Research Reports 1206, Mathematica Policy Research.
  7. Stephan Lindner & Austin Nichols, 2012. "The Impact of Temporary Assistance Programs on Disability Rolls and Re-Employment," Working Papers, Center for Retirement Research at Boston College wp2012-2, Center for Retirement Research, revised Jan 2012.
  8. Rebecca M. Blank, 2000. "What Causes Public Assistance Caseloads to Grow?," JCPR Working Papers 18, Northwestern University/University of Chicago Joint Center for Poverty Research.
  9. Moffitt, Robert, 1992. "Incentive Effects of the U.S. Welfare System: A Review," Journal of Economic Literature, American Economic Association, vol. 30(1), pages 1-61, March.
  10. Marianne Bitler & Hilary Hoynes & Elira Kuka, 2014. "Do In-Work Tax Credits Serve as a Safety Net?," NBER Working Papers 19785, National Bureau of Economic Research, Inc.
  11. Moffitt, Robert, 1983. "An Economic Model of Welfare Stigma," American Economic Review, American Economic Association, vol. 73(5), pages 1023-35, December.
  12. James P. Ziliak & David N. Figlio & Elizabeth E. Davis & Laura S. Connolly, 2000. "Accounting for the Decline in AFDC Caseloads: Welfare Reform or the Economy?," Journal of Human Resources, University of Wisconsin Press, vol. 35(3), pages 570-586.
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Cited by:
  1. Peter Ganong & Jeffrey B. Liebman, 2013. "The Decline, Rebound, and Further Rise in SNAP Enrollment: Disentangling Business Cycle Fluctuations and Policy Changes," NBER Working Papers 19363, National Bureau of Economic Research, Inc.
  2. Ganong, Peter & Liebman, Jeffrey B., 2013. "The Decline, Rebound, and Further Rise in SNAP Enrollment: Disentangling Business Cycle Fluctuations and Policy Changes," Working Paper Series rwp13-037, Harvard University, John F. Kennedy School of Government.
  3. Lucie Schmidt, 2013. "The New Safety Net? Supplemental Security Income after Welfare Reform," Department of Economics Working Papers 2013-07, Department of Economics, Williams College.

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