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Filling the poverty gap : Then and now
J. P. Ziliak,
National Poverty Center, Ann Arbor, National poverty center working
paper series, n° 03-8, November, 85 p.,
(2003).
Résumé-Summary
The extent to which means-tested transfers, social
insurance, and tax credits fill the gap between a family’s private resources and
the poverty threshold is a periodic barometer of the social safety net. Using
data on families from the Current Population Survey I examine how the level and
composition of before- and after-tax and after-transfer poverty gaps changed in
response to changes in the policy and economic landscapes over the past two
decades. The estimates presented here indicate not only dramatic changes in the
level and sources of income maintenance programs filling the poverty gap, but
also dramatic changes in which demographic groups successfully fill the gap.
From the peak-to-peak business-cycle years of 1979 to 1999, the fraction of the
gap left unfilled among non-elderly families in poverty has expanded by 25
percent, while the unfilled gap has increased by 50 percent among single
female-headed families, families headed by non-whites, and families residing in
the Northeast. In a given year the poor in the South fill considerably less of
the poverty gap with cash assistance, but make up for much of the shortfall with
higher payments of food stamps, SSI, and SSDI. Over time the poor in all regions
of the country have substituted SSI, SSDI, and the EITC for cash welfare. Indeed,
by 1999 the unfilled gap for families with related children present would be
one-fifth larger without the EITC. With the exception of married-couple families,
this apparent rate of replacement of disability payments and tax credits for
cash assistance is less than one for one, leaving most poor families, especially
non-white families and single female-headed families, financially more
vulnerable today than in previous decades.