The welfare reforms of the 1990s and the stratification of material well-being among low-income households with children

Abstract

We examine the incidence of material hardship experienced by low-income households with children, before and after the major changes to U.S. anti-poverty programs during the 1990s. We use the Survey of Income and Program Participation (SIPP) to examine a series of measures of household material hardship that were collected in the years 1992, 1995, 1998, 2003 and 2005. We stratify our sample to differentiate between the 1) deeply poor (< 50% of poverty), who saw a decline in public assistance over this period; and two groups that saw some forms of public assistance increase: 2) other poor households (50–99% of poverty), and 3) the near poor (100–150% of poverty). We report bivariate trends over the study period, as well as presenting multivariate difference-in-differences estimates. We find suggestive evidence that material hardship—in the form of difficulty meeting essential household expenses, and falling behind on utilities costs—has generally increased among the deeply poor but has remained roughly the same for the middle group (50–99% of poverty), and decreased among the near poor (100–150% of poverty). Multivariate difference-in-differences estimates suggest that these trends have resulted in intensified stratification of the material well-being of low-income households with children. ► We examined material hardship among low-income households with children, 1992–2005. ► We divided the sample into deeply poor, other poor, and near poor households. ► Material hardship of the deeply poor may have increase, 1992–2005. ► Material hardship among the other sub-groups may have decreased, 1992–2005.