Low‐Income Housing Development,Poverty Concentration,and Neighborhood Inequality

Considerable debate exists about the merits of place‐based programs that steer new development, and particularly affordable housing development, into low‐income neighborhoods. Exploiting quasi‐experimental variation in incentives to construct and rehabilitate rental housing across neighborhoods generated by Low‐Income Housing Tax Credit (LIHTC) program rules, we explore the impacts of subsidized development on local housing construction, poverty concentration, and neighborhood inequality. While a large fraction of rental housing development spurred by the program is offset by a reduction in the number of new unsubsidized units, housing investment under the LIHTC has measurable effects on the distribution of income within and across communities. However, there is little evidence the program contributes meaningfully to poverty concentration or residential segregation.     

Waging War on Poverty: Poverty Trends Using a Historical Supplemental Poverty Measure

Using data from the Consumer Expenditure Survey and the March Current Population Survey, we provide poverty estimates for 1967 to 2012 based on a historical supplemental poverty measure (SPM). During this period, poverty, as officially measured, has stagnated. However, the official poverty measure (OPM) does not account for the effect of near‐cash transfers on the financial resources available to families, an important omission since such transfers have become an increasingly important part of government antipoverty policy. Applying the historical SPM, which does count such transfers, we find that trends in poverty have been more favorable than the OPM suggests and that government policies have played an important and growing role in reducing poverty—a role that is not evident when the OPM is used to assess poverty. We also find that government programs have played a particularly important role in alleviating child poverty and deep poverty, especially during economic downturns.     

Myth and reality: The causes and persistence of poverty

Policies directed at alleviating poverty rest on a set of assumptions regarding the demographic composition of the poor and the psychological dispositions of poor individuals. Evidence from a long-term study of a representative sample of low-income individuals shows that poverty is very widespread but not usually very persistent, and that the characteristics of the persistently poor do not conform to the conventional wisdom. Furthermore, the economic status of the poor does not appear to have been caused by psychological dispositions. Intergenerational data from the same study show generally weak links between the poverty or welfare status of parents and that of their children. Public policies for dealing with poverty can be properly devised without attempting to resocialize poor people and without undue concern that poverty programs will generate dependency among the majority of those they help.     

Poverty spending and the poverty gap

This paper examines two questions basic to welfare policy: (1) whether the amount of poverty-related transfers is sufficient to fill the poverty gap, and (2) which families actually get benefits and how much of their income deficit is filled by those benefits. Transfers are sufficient: the post-Social Security poverty gap is $74 billion while poverty-related programs total $198 billion. Further, 86% of current income-conditioned benefits go to the pretransfer poor and 89% of those are used to alleviate poverty (fill the poverty gap). Thus, if a substantial fraction of total Federal and State expenditures on poverty-related programs could be targeted more toward the poor, the poverty gap can be eliminated. The current programs, however, would have to be changed substantially to achieve the necessary retargeting.     

Public Finance,Governance, and Cash Transfers in Alleviating Poverty and Inequality in Chile

As the Chilean government seeks to reduce poverty and inequality through cash transfers to poor households, local governments are responsible for both identifying the poor and allocating transfers. Until recently, however, evaluating the effectiveness of local governments in enacting these policies has been restricted by data limitations. This paper builds on recent evidence that cash transfers have highly variable impacts on poverty and inequality at the county level. In particular, we explore how local public finance and the strength of the governing mandate influence the efficiency of cash transfers. With a richly specified model, we find that public spending on goods and services, the fraction of available subsidies claimed by the local government, and the share of county land that is zoned for industrial purposes are all correlated with considerable reductions in poverty and inequality. In addition, the strength of the governing mandate weakly influences the efficiency of transfers in reducing poverty, but not inequality. These results demonstrate that a better understanding of such institutions can lead to more efficient targeting for social programs.     

Is long-term food insecurity inevitable in Asia?

Abstract

This article questions two widely accepted claims on long-term food insecurity in Asia, the world's (heterogeneous) region with the largest number of undernourished individuals. The first claim is that food production may not grow as fast as the pace of population growth in Asia, which will reach 5 billion by 2050. The second claim is that an unstoppable emergence of a middle class in Asia will dramatically change the composition of food demand. On the first claim, the region's contribution to high and volatile international food prices is well known, but Asia's potentially positive contributions toward future price uncertainty and productivity growth are much less cited. On the second claim, the changing composition of future food demand in the region will depend on the extent that poverty reduction effectively leads to middle class expansion, which it is not an automatic process, and its extent still remains to be seen. Past evidence teaches us that poverty reduction on its own will not do the job of eradicating hunger, nor will only increasing food production. The jury is still out, but doomsday predictions are not necessarily justified.     

The devil may be in the details: how the characteristics of SCHIP programs affect take-up.

In this paper, we explore whether the specific design of a state's program has contributed to its success in meeting two objectives of the Children's Health Insurance Program (SCHIP): increasing the health insurance coverage of children in lower income families and doing so with a minimum reduction in their private health insurance coverage (crowd-out). In our analysis, we use two years of Current Population Survey data, 2000 and 2001, matched with detailed data on state programs. We focus on two populations: the eligible population of children, broadly defined--those living in families with incomes below 300 percent of the federal poverty line (FPL)--and a narrower group of children, those who we estimate are eligible for Medicaid or SCHIP. Unique state program characteristics in the analysis include whether the state plan covers families; whether the state uses presumptive eligibility; the number of months without private coverage that are required for eligibility; whether there is an asset test; whether a face-to-face interview is required; and specific outreach activities. Our results provide evidence that state program characteristics are significant determinants of program success.     

THE PERSISTENCE OF POVERTY IN THE CONTEXT OF FINANCIAL INSTABILITY: A BEHAVIORAL PERSPECTIVE

We review recent findings regarding the psychology of decisionmaking in contexts of poverty, and consider their application to public policy. Of particular interest are the oft‐neglected psychological and behavioral consequences of economic scarcity coupled with financial instability. The novel framework highlights the psychological costs of low and unstable incomes, and how these can transform small and momentary financial hurdles into long‐lasting poverty traps. Financial instability, we suggest, not only has obvious economic ramifications for well‐being, but it also creates the need for constant focus and attention, and can distract from the very opportunities otherwise designed to alleviate the effects of poverty. We describe a variety of public policy strategies that emerge from this perspective that are not readily apparent in conventional theories that permeate the design of social programs.     

Poverty Reduction in A Transforming China: A Critical Review

This review essay surveys the literature that explains China’s poverty reduction progress since the late 1970s. It examines three dominant explanations: geographic conditions, economic growth, and anti-poverty policies, whose impacts on poverty have evolved with China’s socioeconomic transformation. The review finds that the government has come to play an increasingly significant part in mitigating geographic adversity and making growth more inclusive for the poor over the last two decades. However, our understanding of the political institutions and processes underpinning poverty reduction remains incomplete because most studies concentrate on national and provincial authorities but overlook the county government. As counties have gained considerable resources and authority in poverty reduction, an investigation of their capacity and efficacy is fundamental to explain their various poverty alleviation outcomes. This essay thus proposes a framework for future research that investigates county governments’ bureaucratic arrangements and their relations to society to explain their performance in poverty reduction. This essay concludes with lessons and limitations of China’s government-led poverty alleviation campaign.

     

Social Security and Third World Poverty: The Challenge to Policymakers

Although social security emerged in the industrial countries as a mechanism for alleviating and preventing poverty, it has had a negligible impact on the problem of poverty in the developing countries. Because of the high incidence of poverty in the Third World and the need for effective interventions, conventional social security policies should be critically reexamined. Reviewing previous attempts to formulate social security policies that focus on the poor, this paper challenges policymakers to identify innovative social security programs that address the poverty problem directly.     

WELFARE LIBERALISM, SOCIAL POLICY, AND POVERTY IN AMERICA

The conservative explanation for the persistence of poverty—that liberal social programs have created with disincentives-explains very little of the poverty that exists. It has gained acceptance because liberal anti-poverty efforts have been based on flawed understanding of the problem that insured their failure. Because of the oversupply of young adult workers in the 1970s, there was a proliferation of jobs paying low wages. Liberal programs that assumed that the poor simply needed training and education to lift themselves out of poverty, ignored the shortage of jobs paying above-poverty-level wages. Liberals also assumed that with the requisite training and jobs, all Americans have the capacity to gain the skills necessary to obtain those jobs. This neglects data showing that a larger proportion of individuals with low native ability have earnings beneath the poverty line than workers with normal ability, even when controlling for educational attainment. A new anti-poverty effort must take into account these realities.     

Decentralization,Fiscal Independence,and Poverty in the Philippines

Decentralization is a common public sector reform in developing countries. Its basic rationale is that local governments have an informational advantage regarding the needs and preferences of consumers. However, decentralization also has drawbacks. Foremost is the efficiency advantage of the central government in providing public services because of economies of scale and better access to resources. This study looked at the relationship between decentralization and poverty using data from Philippine cities and municipalities. Results suggest that decentralization, as represented by fiscal independence and measured by the share of locally sourced revenues to total local government revenues, is indeed associated with lower poverty. However, this effect is not linear—the marginal effect of decentralization on poverty diminishes as decentralization increases. Moreover, decentralization moderates the positive effect of good governance on poverty reduction and the magnitude of the relationship between poverty and decentralization is stronger in poorer municipalities than in richer ones.     

Application of experimental poverty measures to the aged

The U.S. Census Bureau recently released new, experimental measures of poverty based on a National Academy of Sciences (NAS) panel's recommendations. This article examines the effects of the experimental measures on poverty rates among persons aged 65 or older in order to help inform policy debate. Policymakers and analysts use poverty rates to measure the successes and failures of existing programs and to create and defend new policy initiatives. The Census Bureau computes the official rates of poverty using poverty thresholds and definitions of countable income that have changed little since the official poverty measure was adopted in 1965. Amid growing concerns about the adequacy of the official poverty measure, a NAS panel undertook a study of the concepts, methodology, and data needed to measure poverty. The panel concluded in its 1995 report that the current measure no longer provides an accurate picture of relative rates of poverty for different groups in the population or of changes in poverty over time. The panel recommended changes in establishing the poverty thresholds, defining family resources, and obtaining the required data. The Census Bureau report shows how estimated levels of poverty would differ from the official level as specific recommendations of the NAS panel are implemented individually and how estimated trends would differ when many recommendations are implemented simultaneously. It computes nonstandardized and standardized poverty rates. (The latter constrains the overall poverty rate under the experimental measures to match the official rate.) This article reports poverty rates that have not been standardized and provides considerably more detail than the Census report about the effects of the experimental measures on poverty among the aged. It examines the effects of changing the poverty thresholds and the items included or excluded from the definition of available resources. It also explores the effects of the experimental measures on persons aged 65 or older by age group, gender, race and ethnicity, and marital status. Results indicate that: Poverty rates in 1997 for persons aged 65 or older under the experimental NAS poverty measure are 17.3 percent, compared with 10.5 percent under the official poverty measure. This 65-percent increase is largely driven by the NAS-based measure's subtraction of medical out-of-pocket (MOOP) expenses from resources. Under the NAS-based measures, poverty rates increase for all major groups of older persons, and increase the most for groups for whom the incidence of official poverty is the lowest. The experimental NAS poverty measure shows narrower differences between genders, racial and ethnic groups, and among persons of different marital statuses than the official poverty measure. For example, white Hispanic women aged 65 or older have poverty rates that are 450 percent higher than those for white non-Hispanic men under the official poverty measure and 181 percent higher under the NAS measure. The NAS-based measure's subtraction of MOOP expenses from resources has a disproportionate effect on poverty rates among non-Hispanic whites and men as compared with other groups. However, changes in relative poverty between groups appear to be most influenced by the NAS midpoint equivalence scale. Because this scale decreases poverty rates for persons who live alone or with unrelated individuals and increases them for persons who live with others, poverty rates differ meaningfully under the NAS and official measures among demographic groups. This article highlights issues concerning the elements of the experimental NAS poverty measure that are particularly important to the measurement of poverty among the aged population. Results suggest that the research community's future efforts to refine, enhance, and build upon the NAS panel's recommendations will yield important insights about poverty among the older population.     

Family self‐sufficiency and housing

Abstract

Since the early 1980s, an increasing number of initiatives have been introduced to link housing programs and policies with efforts designed to promote family economic self‐sufficiency. This article reviews a set of programs that have worked to manipulate various components of the housing bundle to improve the economic well‐being of acutely poor families. They include programs that modify the characteristics and services available in the local community, alter families’ residential location, provide incentives and opportunities for homeownership, and link the provision of housing subsidies to increasing local capacity for service delivery.

This article suggests that the centrality of housing in fostering or impeding economic mobility makes it a key element in dealing with acute poverty and part of a creative strategy for intervening in the dynamics of poverty. Several important areas need to be taken into account when evaluating current policy; and multiyear evaluations will be necessary to determine the success of these programs.     

INTENDED AND UNINTENDED EFFECTS OF THE WAR ON POVERTY: WHAT RESEARCH TELLS US AND IMPLICATIONS FOR POLICY

During the mid‐1960s, the United States adopted a series of cash and in‐kind transfer programs, as well as human capital investment strategies, as part of the War on Poverty. A number of other programs were first proposed as part of this “war” but were not implemented until the mid‐1970s. These programs had noble goals: to increase incomes at the bottom of the income distribution, reduce poverty, and improve nutrition, heath, and human capital. However, various features of the programs also had the potential to produce unintended consequences: for example, means‐tested programs can discourage work. In this paper, we comprehensively evaluate the main War on Poverty programs that were aimed at the low‐income nonelderly population along with several follow‐on programs. We focus on both intended and unintended consequences, drawing on the most compelling causal evidence. We conclude with a series of lessons learned and questions that are outstanding.     

Housing vouchers in the United States,great Britain,and the Netherlands: Current issues and future perspectives

Abstract

We compare the current U.S. housing voucher program with the British housing benefit and the Dutch housing allowance programs. After presenting the theory behind income‐related housing support, which underpins both the U.S. and European systems, we compare the three programs with respect to their scope (the budgeted versus the entitlement approach), the relationship between housing support and rent levels, the poverty trap, moral hazards, and administrative problems.

The United States can learn from Great Britain and the Netherlands that a full entitlement program can best promote equity, but given the present political and economic climate, it is unlikely that Congress will adopt such a program anytime soon. Great Britain and the Netherlands can learn from the United States how to design a more efficient tenant subsidy program, one that provides incentives to find less expensive units and promotes family self‐sufficiency through enhanced job‐seeking behavior.     

State Poverty Rates: Do the New Welfare Policies Make a Difference?

This article uses four models to identify the best predictors of state poverty levels and changes in state poverty rates since the implementation of welfare reform. The policy decisions based on the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) by the states are tested along with more traditional variables identified in the literature. Using several measures of state poverty, the analysis finds that those states with the lowest poverty rates are those with the healthiest economies, and the most generous state spending on Temporary Assistance for Needy Families (TANF). States with the highest percentage of their TANF rolls made up of black citizens tend to have the highest rates of poverty. Initial poverty rates are found to be important in that states with higher initial poverty levels are capable of generating a larger reduction in poverty than states with lower initial rates. With the exception of limited evidence on sanctions, none of the PRWORA–based policies were found to have any effect on poverty rates.     

THE WAR ON POVERTY: MEASUREMENT,TRENDS, AND POLICY

We present a 50‐year historical perspective of the nation's antipoverty efforts, describing the evolution of policy during four key periods since 1965. Over this half‐century, the initial heavy reliance on cash income support to poor families has eroded; increases in public support came largely in the form of in‐kind (e.g., Food Stamps) and tax‐related (e.g., the Earned Income Tax Credit) benefits. Work support and the supplementation of earnings substituted for direct support. These shifts eroded the safety net for the most disadvantaged in American society. Three poverty‐related analytical developments are also described. The rise of the Supplemental Poverty Measure (SPM)—taking account of noncash and tax‐related benefits—has corrected some of the serious weaknesses of the official poverty measure (OPM). The SPM measure indicates that the poverty rate has declined over time, rather than being essentially flat as the OPM implies. We also present snapshots of the composition of the poor population in the United States using both the OPM and the SPM, showing progress in reducing poverty overall and among specific socioeconomic subgroups since the beginning of the War on Poverty. Finally, we document the expenditure levels of numerous antipoverty programs that have accompanied the several phases of poverty policy and describe the effect of these efforts on the level of poverty. Although the effectiveness of government antipoverty transfers is debated, our findings indicate that the growth of antipoverty policies has reduced the overall level of poverty, with substantial reductions among the elderly, disabled, and blacks. However, the poverty rates for children, especially those living in single‐parent families, and families headed by a low‐skill, low‐education person, have increased. Rates of deep poverty (families living with less than one‐half of the poverty line) for the nonelderly population have not decreased, reflecting both the increasing labor market difficulties faced by the low‐skill population and the tilt of means‐tested benefits away from the poorest of the poor.     

Social Security as Poverty's Guardian

Although social security programs were originally introduced as measures to reduce the poverty of needy groups, factors such as coverage, vestedness, administrative regulations and the so-called "wage stop" effectively prevent millions of people throughout the world from living decently when their only source of income is from social security. In the overwhelming majority of social security programs worldwide, including old-age pensions, illness and maternity programs, workers compensation, and family or children's allowances, coverage is open only to workers and usually excludes housewives, transient workers, agricultural laborers, new immigrants and part-time workers. Similarly, vestedness requirements effectively prevent many people from receiving benefits. Administrative regulations, including waiting times and proof of status, add to the difficulties many people have in getting social security benefits. Most importantly, the stipulation in almost every program that no one should be able to get from welfare programs that which he or she could get from wages or salaries keeps the level of payments far below the poverty line. This paper will document and demonstrate the influence of social security programs throughout the world in contributing to the maintenance of poverty and will propose some radical solutions for overcoming the problem.     

Innovative approaches to reforming public services in Tanzania

Against the background of growing convergence amongst countries with regard to the focus on their public service reforms, the forces driving the same and communalities amongst approaches being adopted, the article assesses the various phases of Tanzania's public service reforms over 20 years. It concludes by posing two questions: first, how are the reforms contributing to improvements in poverty reduction and in service delivery? Second, why should ‘reform’ be treated as a priority in the allocation of budgetary resources by development partners? The answer is that direct links between Public Service Reform Programme (PSRP) interventions and poverty reduction remains elusive, and the challenge is how best to manage that situation. Copyright © 2004 John Wiley & Sons, Ltd.