Gaps in the welfare state: A role-based model of poverty risk in the U.S.

Abstract

Research clearly demonstrates that income matters greatly to health. However, income distribution and its relationship to poverty risk is often misunderstood. We provide a structural account of income distribution and poverty risk in the U.S., rooted in the 'roles' that individuals inhabit with relation to the 'factor payment system' (market distribution of income to individuals through wages and asset ownership). Principal roles are child, older adult, and, among working-age adults, disabled individual, student, unemployed individual, caregiver, or paid laborer. Moreover, the roles of other members of an individual's household also influence an individual's income level. This account implies that 1) roles other than paid laborer will be associated with greater poverty risk, 2) household composition will be associated with poverty risk, and 3) income support policies for those not able to engage in paid labor are critical for avoiding poverty. We test hypotheses implied by this account using 2019 and 2022 U.S. Census Current Population Survey data. The exposure variables in our analyses relate to roles and household composition. The outcomes relate to income and poverty risk. In 2019, 40.1 million individuals (12.7% of the population) experienced poverty under the U.S. Census' Supplemental Poverty Measure. All roles other than paid laborer were associated with greater poverty risk (p < .001 for all comparisons). Household composition, particularly more children and disabled working-age adults, and fewer paid laborers, was also associated with greater poverty risk (p < .001 for all comparisons). Five key policy areas-child benefits, older-age pensions, disability and sickness insurance, unemployment insurance, and out-of-pocket healthcare spending-represented gaps in the welfare state strongly associated with poverty risk. The role one inhabits and household composition are associated with poverty risk. This understanding of income distribution and poverty risk may be useful for social policy.