Government surveys significantly overstate the prevalence and depths of poverty in the U.S., new academic research has found.
The results will challenge the assumptions of both conservatives, who often argue that government programs have failed to alleviate poverty, and liberals, who claim that poverty has worsened because of conservative reforms to welfare programs.
Economists Bruce Meyer and Nikolas Mittag wrote in a working paper published Monday by the National Bureau for Economic Research that the census survey used to calculate poverty and the poverty rate is affected by widespread underreporting of use of government anti-poverty programs.
As a result, they write, the official poverty measure “severely understates income of those in deep poverty and thereby makes poverty look more severe and inequality look worse than it truly is.”
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They conclude that people responding to the ensus often do not respond to key questions or understate their participation in programs such as cash welfare, food stamps and housing assistance. Very poor people are more likely than others to misreport their use of such programs.
When those benefits are taken into consideration, poverty is not as bad as it appears from the official statistics. Nearly 15 percent of Americans were counted as impoverished in 2014, hardly different from what it was when the War on Poverty began in the 1960s.
As one example of how poverty is overstated, the study notes that households led by single mothers in deep poverty have $2,000 per person more than the official government survey statistics would indicate from just four programs: Temporary Assistance for Needy Families, food stamps, housing assistance and state welfare programs. That $2,000 is a lot when considered that the poverty line for a family of a single mother and two children was just over $19,000 for 2014 and “deep poverty” is defined by income less than half the poverty line.
The fact that people misreport their use of government anti-poverty programs not only makes it appear that they get fewer benefits than they do, but “also causes the poverty-reducing effect of government transfer programs to be greatly understated,” the study’s authors note.
They say the poverty-reducing effects of the four government programs they studied is almost twice as large as the government surveys suggest.
Far fewer single mothers were left behind by the 1996 welfare reform than is sometimes claimed, they conclude. That overhaul mandated work requirements for welfare programs, and it was subsequently thought that many single-mother families stopped receiving benefits but failed to find work. The authors of the working paper write that the share of those single mothers is overstated by 50 percent or more.
They arrived at their results by comparing the statistics drawn from the census’ Current Population Survey to administrative data for welfare programs in New York.
They got figures on food stamps and welfare use from the New York State Office of Temporary and Disability Assistance, data taken from records of actual payments rather than survey responses. They pulled statistics on housing assistance from Department of Housing and Urban Development data that include address, family information and rent. They then linked those data sources to the Current Population Survey to get a comparison.
