Labor Markets & Poverty


Labor Markets and Poverty

Image of Labor Markets and Poverty

In 1996, the United States reformed its welfare system, linking benefits more directly to labor force participation. When combined with the expansion of the Earned Income Tax Credit, which subsidizes low wage workers through the tax code, work has become a cornerstone of American anti-poverty policy. At the same time, rising income inequality and stagnant real wages among less-skilled workers mean that working one’s way out of poverty is more challenging than ever before.

With these trends as a backdrop, a number of new questions are emerging. For example, how can government programs best address poverty if full-time work itself does not provide sufficient income to move many families out of poverty? Given the evolving consensus that poor mothers should be expected to work, how will women’s employment, family structure and poverty evolve in the 21st Century?

Our Research Affiliates are tackling these questions, as well analyzing trends in immigration and related demographic changes that have important implications for labor market opportunities available to the poor.

Research Paper Hilary Hoynes Marianne Page Ann Huff Stevens

Poverty in America: Trends and Explanations
Hilary Hoynes, Marianne Page, and Ann Huff Stevens (Affiliates in Economics)

Over the past 45 years, the United States has experienced a rising standard of living, with real GDP per capita more than doubling between 1959 and 2004. In contrast, living standards among some groups seem to have stagnated. Although a number of studies have documented a correlation between macroeconomic conditions and poverty, the relationship is not as simple, or as strong, as one might think. What additional factors can explain the starkly different trends in economic well-being that are measured by overall GDP growth and the poverty rate?

Research Paper Hilary Hoynes

Work Incentives and the Food Stamp Program
Hilary Hoynes (Affiliate in Economics) and Diane Schanzenbach

A central question in public finance, one that has generated decades of research, is how tax and transfer programs affect labor supply. Treating food stamp benefits as an income transfer, Research Affiliate Hilary Hoynes uses a quasi-experimental approach to estimate the impact of the program on labor supply.

Research Paper Hilary Hoynes Douglas Miller

Who Suffers During Recessions?
Hilary Hoynes (Affiliate in Economics), Douglas L. Miller (Affiliate in Economics) and Jessamyn Schaller (former graduate student in Economics, currently an Assistant Professor of Economics at University of Arizona)

Does the Great Recession impact certain segments of the population more dramatically? Researchers find that the effects are not uniform across demographic groups, and have been felt most strongly for men, black and Hispanic workers, youth, and low education workers.

Research Paper Hilary Hoynes Douglas Miller

Income, the Earned Income Tax Credit, and Infant Health
Hilary W. Hoynes (Affiliate in Economics), Douglas L. Miller (Affiliate in Economics), and David Simon (Graduate Student in Economics)

Is there a positive health impact to families receiving the Earned Income Tax Credit, a central piece in the U.S. safety net for families with children? Researchers conclude that the sizeable increase in income for eligible families significantly improved birth outcomes for both whites and African Americans, with larger impacts for births to African American mothers.