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US Safety Net Might Be Working Better Than We Think
From “Using Linked Survey and Administrative Data to Better Measure Income: Implications for Poverty, Program Effectiveness and Holes in the Safety Net” by Bruce D. Meyer and Nikolas Mittag:
We examine the consequences of underreporting of transfer programs for prototypical analyses of low-income populations using the Current Population Survey (CPS), the source of official poverty and inequality statistics. We link administrative data for food stamps, TANF, General Assistance, and subsidized housing from New York State to the CPS at the individual level.
Program receipt in the CPS is missed for over one-third of housing assistance recipients, 40 percent of food stamp recipients and 60 percent of TANF and General Assistance recipients. Dollars of benefits are also undercounted for reporting recipients, particularly for TANF, General Assistance and housing assistance. 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.
We also re-examine the coverage of the safety net, specifically the share of people without work or program receipt. Using the administrative measures of program receipt rather than the survey ones often reduces the share of single mothers falling through the safety net by one-half or more.
Among other things, this paper suggests it’s better to look at consumption data than income data when looking at the economic resources at the disposal of low-income Americans. And by that measure, the poor are less poor.
Published in Economics
I am not understanding this post and hope the OP or someone else will clarify.
The title says the US safety net might be working better and the article, if I am reading correctly, goes on to say we are under counting/reporting what we are actually paying out to recipients and that we are paying them more than we estimate.
And this is defined as ‘working better’?
Good luck getting a response.
Noted.
What is your take?
We know how much money is going out. If we have a higher portion of it reaching its targets than was previously believed, that seems like something that could be characterized as a good thing to me. If nothing else, it would suggest that there’s more fat available to trim than one might have estimated off the previous data.