Tanvi Misra is a staff writer for CityLab covering immigrant communities, housing, economic inequality, and culture. She also authors Navigator, a weekly newsletter for urban explorers (subscribe here). Her work also appears in The Atlantic, NPR, and BBC.
Especially for single mother-led households.
Despite their problems, government-assistance programs for housing and food are generally considered pretty promising poverty-fighting measures. Census data suggests as much. But a new working paper looking at a broader data set argues that the benefits of these assistance programs are even greater than typically believed. Here’s the main takeaway, via the report:
We find that the survey data sharply understate the income of poor households. Underreporting in the survey data also greatly understates the effects of anti-poverty programs and changes our understanding of program targeting. Using the combined data rather than survey data alone, the poverty reducing effect of all programs together is nearly doubled while the effect of housing assistance is tripled.
While income-based poverty measures have been improving, they still rely on data obtained by the Census bureau via its Current Population Survey—figures riddled with inaccuracies, according to University of Chicago economists Bruce D. Meyer and Nikolas Mittag, authors of the new paper. To demonstrate how these distorted data affect our understanding of poverty and government-assistance programs, the researchers compared the snapshot of poverty created by what people have reported (or in this case, misreported) to the Census with one created using government records of actual assistance given out.
Meyer and Mittag examined administrative data from the New York’s State’s Office of Temporary and Disability Assistance and the federal Department of Housing and Urban Development on food stamps, welfare, and housing assistance (which included rent through housing-voucher programs) in the state between 2008 and 2011. They found that 2.5 percent more of the state’s population was pulled out of poverty as a result of these programs than survey data reported. Administrative data revealed a 5.3 percent reduction in poverty over this time period, almost double that of the 2.8 percent reduction found via survey data.
Here’s a chart comparing survey- and administrative-based reduction numbers for different assistance programs across the whole New York population:
Housing vouchers were much more effective in bringing down poverty than any other individual program, as per the administrative data analysis conducted by the authors. They were solely responsible for lifting an additional 1.7 percent of the population out of poverty than the Census survey had detected.
For households with single mothers and disabled family members, the difference between administrative and survey data was particularly stark. As the first chart below shows, the assistance programs led to a 10.2 percent point reduction in poverty rate for households with disabled members as per administrative data, compared to a 5.8 percent point reduction as per survey data:
For single mother-led households, the difference between administrative data-based poverty reduction (18.3) and survey-based reduction (7.3) is 11 percentage points. Housing assistance, more than anything else, made this huge dent in poverty rates: its beneficial effect according to the administrative measure (7.68) was was 10 times greater than it was according to the CPS-measure (0.71):
While the main intent behind the research is to “augment and remedy the weaknesses of survey data,” it acts like a report card evaluating the government’s arsenal of solutions to end concentrated poverty. The findings support the case against slashing funding for housing assistance and placing restrictions on food stamp programs. Housing vouchers, in particular, can help poor families move out of poor neighborhoods, and up the economic ladder. But making these voucher programs more accessible to people who need them remains a challenge.