An Assessment of the Effectiveness of Anti-Poverty Programs in the United States

We assess the effectiveness of means-tested and social insurance programs in the United States. We show that per capita expenditures on these programs as a whole have grown over time but expenditures on some programs have declined. The benefit system in the U.S. has a major impact on poverty rates, reducing the percent poor in 2004 from 29 percent to 13.5 percent, estimates which are robust to different measures of the poverty line. We find that, while there are significant behavioral side effects of many programs, their aggregate impact is very small and does not affect the magnitude of the aggregate poverty impact of the system. The system reduces poverty the most for the disabled and the elderly and least for several groups among the non-elderly and non-disabled. Over time, we find that expenditures have shifted toward the disabled and the elderly, and away from those with the lowest incomes and toward those with higher incomes, with the consequence that post-transfer rates of deep poverty for some groups have increased. We conclude that the U.S. benefit system is paternalistic and tilted toward the support of the employed and toward groups with special needs and perceived deservingness.

Trends in the Composition and Outcomes of Young Social Security Disability Awardees

Working Paper: WP 2013-284A large share of new Social Security Disability (SSD) beneficiaries -- disabled workers and disabled adult children (DAC) -- are under age 40. Better information on the backgrounds, impairments, personal characteristics, and employment outcomes of these beneficiaries would help policymakers develop programs tailored to the needs and circumstances of various subgroups of such beneficiaries. We use administrative data on young SSD awardees first awarded benefits between 1996 and 2007 to examine trends in these awardees’ composition and outcomes. We find that the composition of young SSD awardees changed substantially during this period. In 2007, compared to 1996, relatively more SSD awards to individuals under age 40 went to DAC versus disabled workers; to disabled workers and DAC who had received Supplemental Security Income (SSI) benefits, especially as children, versus those with no SSI history; and to disabled workers and DAC with psychiatric disorders versus those with other types of impairments. We also find that disabled workers who received SSI as children are far more likely than those who did not receive SSI as children to earn more than $1,000 annually (in 2007 dollars) as of the fifth post-award year; that compared to disabled workers, DAC are considerably less likely to work and earn more than$1,000 annually; and that both disabled workers and DAC are significantly less likely to earn more than 12 times the non-blind substantial gainful activity level (SGA) annually than they are to earn more than $1,000 annually. We discuss factors that may have contributed to the observed trends.Social Security Administrationhttp://deepblue.lib.umich.edu/bitstream/2027.42/99127/1/wp284.pd

An Assessment of the Effectiveness of Anti-Poverty Programs in the United States

We assess the effectiveness of means-tested and social insurance programs in the United States. We show that per capita expenditures on these programs as a whole have grown over time but expenditures on some programs have declined. The benefit system in the U.S. has a major impact on poverty rates, reducing the percent poor in 2004 from 29 percent to 13.5 percent, estimates which are robust to different measures of the poverty line. We find that, while there are significant behavioral side effects of many programs, their aggregate impact is very small and does not affect the magnitude of the aggregate poverty impact of the system. The system reduces poverty the most for the disabled and the elderly and least for several groups among the non-elderly and non-disabled. Over time, we find that expenditures have shifted toward the disabled and the elderly, and away from those with the lowest incomes and toward those with higher incomes, with the consequence that post-transfer rates of deep poverty for some groups have increased. We conclude that the U.S. benefit system is paternalistic and tilted toward the support of the employed and toward groups with special needs and perceived deservingness.

Guaranteed Income and Financial Treatment (G.I.F.T.): A 12-Month, Randomized Controlled Trial to Compare the Effectiveness of Monthly Unconditional Cash Transfers to Treatment as Usual in Reducing Financial Toxicity in People With Cancer Who Have Low Incomes

Cancer-related financial hardship (i.e., financial toxicity) has been associated with anxiety and depression, greater pain and symptom burden, treatment nonadherence, and mortality. Out-of-pocket healthcare costs and lost income are primary drivers of financial toxicity, however, income loss is a pronounced risk factor for cancer patients with low incomes. There has been little progress in developing an income intervention to alleviate financial toxicity cancer patients with low incomes. Unconditional cash transfers (UCT), or guaranteed income, have produced positive health effects in experiments with general low-income populations, but have not yet been evaluated in people with cancer. The Guaranteed Income and Financial Treatment (GIFT) Trial will use a two-arm randomized controlled trial to compare the efficacy of a 12-month UCT intervention providing $1000/month to treatment as usual on financial toxicity, health-related quality of life and treatment adherence in people with cancer who have low-incomes. The study will recruit 250 Medicaid beneficiaries with advanced cancer from two comprehensive cancer centers in Philadelphia, obtain informed consent, and randomize patients to one of two conditions: (1)$1,000/month UCT or (2) treatment as usual. Both arms will receive information on financial toxicity and the contact information for their hospital social worker or financial advocate upon enrollment. Participants will complete online surveys at baseline, 3, 6, 9, and 12 months from enrollment to collect patient-reported data on primary (i.e., financial toxicity, health-related quality of life, and treatment adherence) and secondary outcomes (i.e., anxiety, depression, food insecurity, housing stability). Social security records will be used to explore the effect on mortality at 2, 3, and 5 years post-enrollment. Linear mixed-models will be used to analyze all primary and secondary continuous outcomes over time and general estimating equations with a logit link and binary distribution for all binary outcomes over time. Differences between treatment and control groups and treatment effects will be determined using models that control for age, gender, race, baseline food security, baseline housing stability, and baseline ECOG. Findings from this study will have significant implications for the development and implementation of programs and policies that address the financial burden of cancer and other serious illnesses

The Effect of the Earned Income Tax Credit in the District of Columbia on Poverty and Income Dynamics

Using unique longitudinal administrative tax panel data for the District of Columbia (DC), we assess the combined effect of the DC supplemental earned income tax credit (EITC) and the federal EITC on poverty and income dynamics within Washington, DC, from 2001 to 2011. The EITC in DC merits investigation, as the DC supplement to the federal credit is the largest in the nation. The supplemental DC EITC was enacted in 2000, and has been expanded from 10 percent of the federal credit in 2001 to 40 percent as of 2009. To implement the study, we estimate least squares models with 0/1 dependent variables to estimate the likelihood of net-EITC income above poverty and near-poverty thresholds. We also estimate the likelihood of earnings growth and income stabilization from the EITC. To identify the effect of the EITC, we exploit variation in the EITC subsidy rate from 2008 to 2009, when an additional EITC bracket of 45 percent was added for workers with three or more dependent children, up from 40 percent in the previous year for workers with two or more children. We also estimate a model examining the impact of city-level changes to the EITC. The structure and richness of our data enable us to control for tax filer fixed effects, an important innovation from many previous EITC studies. Overall, we find that the combined EITC raises the likelihood of net-EITC income above poverty and near poverty by as much as 9 percent, with the largest consistent effects accruing to single-parent families

Impacts of the 2010 VA PTSD Rule Change on Veterans’ Disability Compensation and Reported Cognitive Disability

In July 2010, the Department of Veterans Affairs (VA) simplified the process of obtaining veterans’ disability compensation (DC) for veterans with posttraumatic stress disorder (PTSD) who served in combat zones but not in combat roles. In this article, we use data from the Current Population Survey (CPS) Veterans Supplement to estimate the impacts of the change in the VA PTSD rule on DC benefit receipt and self-reported cognitive disability. We hypothesize that the easing of eligibility rules led to an increase in DC receipt among veterans who served in combat zones but not in combat roles. It may also have led to reduced stigma among veterans with regard to reporting cognitive disability. Our results are consistent with these hypotheses. Self-reported rates of VA disability and DC receipt increased significantly among combat zone veterans. Self-reported VA disability rating and experience of cognitive disability also increased, but these increases were not statistically significant. During the same period, the rate of self-reported disability other than cognitive disability remained the same