Work, Poverty, and Social Benefits over the Past Three Decades

• Published date: 01 January 2024
• DOI: http://doi.org/10.1177/00027162241290105
• Author: Lisa Barrow,Diane W. Schanzenbach,Bea Rivera
• Date: 01 January 2024
• Subject Matter: Dynamics of Poverty, Work, and Policy

100 ANNALS, AAPSS, 711, January 2024

DOI: 10.1177/00027162241290105

Work, Poverty,

and Social

Benefits over

the Past Three

Decades

By

LISA BARROW,

DIANE W.

SCHANZENBACH,

and

BEA RIVERA

1290105ANN THE ANNALS OF THE AMERICAN ACADEMYWORK, POVERTY, AND SOCIAL BENEFITS

research-article2024

Policymaking that aims to protect families and foster

economic growth ought to be informed by a clear

understanding of how employment, benefits, and fam-

ily well-being interact. Here, we conduct a broad

assessment of employment trends among low-income

Americans, showing that, in recent decades, people

with low income have become more highly educated

and less likely to be married, and the share that is

Hispanic has increased. We also find that these shifting

characteristics do little to explain change in employ-

ment over time. Our findings also contribute to a grow-

ing literature that documents how social benefits for

nonelderly adults increasingly reward and encourage

work: benefits have become more generous to low-

income adults with children who have substantial earn-

ings, while they have remained relatively stable for

childless adults. Low-income families with children and

substantial earnings received more income from social

benefits in the past decade than they did 30 years ago.

Keywords: employment; labor supply; low-income

workers; social benefits; maternal employ-

ment; Earned Income Tax Credit

Understanding ways in which employment,

social benefits, and family well-being

interact is key to designing better policies both

to protect families and to foster economic

Correspondence: dws@northwestern.edu

Lisa Barrow is vice president of regional analysis in the

research department of the Federal Reserve Bank of

Cleveland. She is a labor economist who specializes in

education topics. She served as senior economist at the

Council of Economic Advisers from 2021 to 2022.

Diane W. Schanzenbach is Margaret Walker Alexander

Professor in Education and Social Policy and a faculty

fellow in the Institute for Policy Research at

Northwestern University. She is a research associate of

the National Bureau of Economic Research and an

elected member of the National Academy of Education.

Bea Rivera is an associate in the labor and employment

practice at Charles River Associates. She was formerly

a research assistant at the Federal Reserve Bank of

Chicago.

WORK, POVERTY, AND SOCIAL BENEFITS 101

growth. Fluctuations in the unemployment rate affect the shares of people living

in poverty, rates of food insecurity, and other measures of well-being (Bitler and

Hoynes 2015; Hoynes 2000). The impacts of economic cycles are larger for vul-

nerable populations such as low-income families, families with Black or Hispanic

members, and families with children. Of course, longer-run trends in employ-

ment patterns and wages—which are influenced by changes in automation, trade

patterns, and other factors—also play a key role in family well-being and the

design of social benefits programs.

Many workers in low-income families are employed in jobs that are unstable

and offer limited wage growth and other benefits (Acs and Nichols 2007; Butcher

and Schanzenbach 2018; Kim 2000). Evidence is mixed on the extent to which

low-wage workers in low-income families are able to move up the job ladder, with

some studies finding essentially no improvement over time (Gabe, Abel, and

Florida 2018; Looney and Manoli 2016) and others finding modest but positive

gains (Kuka and Shenhav 2024; Neumark, Asquith, and Bass 2020). Either way,

many workers in low-income families rely on significant support from the social

safety net to help support themselves and their families.

Over the past three decades, social benefits policies have dramatically shifted

in terms of their orientation toward work. In the 1990s, the addition of strict time

limits and other reforms to the cash welfare program combined with expansion

of the Earned Income Tax Credit (EITC), which provided incentives and bene-

fits for employment to low-income parents, fundamentally changed the employ-

ment landscape among this population (Bahk, Moffitt, and Smeeding, this

volume; Blank 2002). Subsequent changes in both health insurance coverage,

due to the Affordable Care Act (Dillender, Heinrich, and Houseman 2022), and

in SNAP (Supplemental Nutrition Assistance Program) work requirements

(Cook and East 2024) may have also had an impact on the patterns of employ-

ment among low-income families. Finally, although the evidence is mixed, state

and local increases in minimum wages may have also altered the landscape for

low-income workers, specifically affecting employment and other measures of

well-being (Cengiz et al. 2019; Clemens and Strain 2021; Jardim et al. 2022).

In this article, we begin by documenting broad declines in employment over

time (see also Abraham and Kearney 2020). Next, we describe who is included in

the low-income population and how their average family compositions, educa-

tional attainment, race and ethnicity, and other characteristics have changed over

time. In the third section, we analyze the extent to which changes in employment

among adults in low-income families can be statistically “explained” by changes

in their characteristics. Finally, we document how the receipt of social benefits

has changed over time and how this receipt varies across earnings levels.

We see this contribution as a tribute to Becky Blank and her important work.

Becky approached the study of poverty as a labor economist, with a deep desire

to understand how changing labor market conditions affect low-income families.

She coedited (at least) two volumes on employment among low-income workers

(Blank, Danziger, and Schoeni 2006b; Card and Blank 2000), each containing a

who’s who of leaders both past and present in the field. Becky also wanted to