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.
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.
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.
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.
