Chronic versus Transient Poverty: Redefining the issues to clarify approaches in policy and practice

1. Chronic versus Transient Poverty:Redefining the issues to clarify approaches in policy and practice Sara E. Kimberlin, PhD Affiliate, Center on Poverty & Inequality Stanford University UC Berkeley School of Social Welfare Grand Challenges in Social Work March 3, 2014

2. Why Focus on Poverty Now? • War on Poverty 50th anniversary this year – but still 46.5 million poor Americans in 2012 • Upstream contributor to many problems addressed by social workers – mental health, physical health, child welfare, homelessness, incarceration • Key challenge for social workers to address, and for scholars to understand to create levers for intervention and policy • Clear that poverty is a Grand Challenge… in fact…

3. POVERTY

4. POVERTY

5. The Power of Problem Definition • Different approaches to describing social problems can bring to light different policy and practice solutions • Breaking down the big problem of poverty into smaller, more manageable pieces can clarify solutions and motivate action • Inspiration: the re-framing of homelessness

6. Inspiration: Homelessness Re-defined • Early 2000s saw shift in how the problem of homelessness in the U.S. was described and understood: Introduction of idea of chronic vs. transient homelessness • Chronic = small population using lots of resourcesTransient = larger group with less intensive service needs • Led to shift in funding and practice: • Targeting different services to chronic vs. transient • Focusing more intensive resources on chronic homeless  What would happen if we looked at poverty through the same lens?

7. Chronic vs. Transient Poverty Transient Poverty Chronic Poverty • Associated with poor life outcomes • Per economic theory, caused by temporary drop in income • Associated with worse life outcomes • Per economic theory, caused by lack of assets needed to reliably generate non-poverty income  Relevant to examine chronic and transient poverty separately

8. Using Data to Analyze the Problem • Seeking data to help design policy and practice solutions to chronic and transient poverty • Examined chronic and transient poverty rates in the United States, during a recent time period representative of the contemporary policy context • Identified differences in size and demographics of chronic vs. transient poor populations • Measured the impact of government benefits, taxes, and other resources/expenses on chronic vs. transient poverty

9. Methods • Data from national Panel Study of Income Dynamics • Biennial survey data 1998 to 2008 with weights • Analytic sample = 8,375 individuals • Partitioned poor population • Chronic poor = poor more than half of years examined (4+ out of 6 yrs) • Transient poor = poor at least one year but not more than half (1-3 out of 6 yrs)

10. Methods (cont’d) • Used Supplemental Poverty Measure (SPM) • Supplemental Poverty Measure • Poverty threshold based on current spending on basic needs • Threshold adjusted for cost of living in different areas • Family includes unmarried partners and their children • Counts cash income plus non-cash benefits like food stamps and EITC • Subtracts non-discretionary expenses like child care and medical bills • Official Poverty Measure • Poverty threshold based on 1960s food costs • Same threshold for all parts of the country • Family comprises those related by blood or marriage only • Only counts cash income

11. Results

12. Total Years in SPM Poverty Transient Poor 18.9% Chronic Poor 2.1% Source: Author’s calculations from biennial PSID data 1998-2008

13. Proportion Transient Poor vs. Chronic Poor within Population Ever SPM Poor 1998-2008

14. Demographics of SPM Poverty: Age

15. Demographics of SPM Poverty: Race/Ethnicity/Immigrant Status

16. Demographics of SPM Poverty: Family Characteristics

17. Demographics of Chronic and Transient Poverty

18. Characteristics that Distinguish Chronic from Transient Poor • Used multivariate multinomial logistic regression for full sample, and multivariate binary logistic regression for poor sample only, to identify characteristics that predict chronic poverty more strongly than transient poverty • Three characteristics emerged: • Immigrant household • Adult in HH with long-term disability, in a high housing cost area • Adult in HH with no high school diploma/GED • All three associated with increased risk of transient poverty as well • Suggestive, but further research needed

19. Impact of Government Benefits Chronic and transient SPM poverty rates, 1998-2008 2.1% [1.4, 2.8]

20. Impact of Government Benefits Chronic and transient SPM poverty rates, 1998-2008, without government benefits 23.9% [21.8, 26.0] 10.8% [9.4, 12.2]

21. Impact of expenses, benefits, and other resources Impact of specific resources/expenses on chronic poverty rate

22. Impact of expenses, benefits, and other resources Impact of specific resources/expenses on transient poverty rate

23. Implications for Policy • Chronic poverty affected a very small population after accounting for existing benefits • Might be feasible goal to eliminate remaining chronic poverty • Would have cost $15.5B per year through direct cash transfers (= half of 1% of federal budget outlays) (in 2008 dollars) • Transient poverty affected a larger population, but with less need • Could prioritize eliminating transient child poverty • Would have cost $13.1B per year through direct cash transfers (< half of 1% of federal budget outlays) (in 2008 dollars)

24. Implications for Policy • Somewhat different demographics for chronic and transient poor • Specific benefits (and expenses) had different impacts on chronic versus transient poverty • Suggests opportunity for more deliberate and effective policy targeting to address needs of chronic versus transient poor • E.g. expand housing subsidies to address chronic poverty, reduce medical expenses to lower transient poverty

25. Implications for Social Work Practice • Differences in duration of poverty and demographics for chronic vs. transient poor suggest somewhat different service needs • For transient poor – one-time assistance to pay unexpected expense or re-establish non-poverty income • For chronic poor – intensive asset building to increase ongoing income, and/or long-term sustained support to meet basic needs

26. Acknowledgments The Horowitz Foundation and the Fahs-Beck Fund generously provided dissertation grants to support this research. Thank you to Census Bureau and Bureau of Labor Statistics staff for providing information about details of SPM methodology. Special thanks to Thesia Garner at BLS as well as Jane Waldfogel and colleagues at the Columbia Population Research Center, for sharing historical SPM thresholds from their research in progress that were used in this study.

27. Contact Information Sara Kimberlin skimberlin@berkeley.edu