State-Level Safety Net Investments and Family Economic Well-Being Before, During and After the COVID-19 Pandemic

• In Event: State-Level Policymaking and Hardship among Families with Children

Abstract

The COVID-19 pandemic and its fallout had multiple and often harmful effects on the economic well-being of children and families, disproportionately among racial and ethnic minority and low-socioeconomic status (SES) households. A question key to research and policy is whether these negative consequences were buffered by public spending. State-level income supports, early childhood and K-12 education programming, and public health insurance promote educational and economic outcomes in the short- and long-term. Further, state-level public spending on programs targeted to families with children narrows SES and other disparities in child development. Existing research has not taken into account the dramatic, temporary increase in public spending during the pandemic funded by federal pandemic relief bills, over which states had considerable control. It is possible that families with children residing in states that invested more on robust child-related policies were buffered against some of the pandemic’s negative and unequal effects. To date, though, data limitations have prevented examining these associations empirically in a comprehensive way.

We use two data sources that offer comprehensive data on safety net expenditures and generosity at the state level. First, we use a recently extended version of the State-by-State Spending on Kids Dataset to capture the period prior to and including the COVID-19 pandemic. These data capture public spending in states from federal, state, and local sources between 1998 and 2022—recently extended from the previous end date of 2016. We will focus on the period between 2017-2022. The data include all 50 states and the District of Columbia, drawing on data from multiple sources. The data contain per-child spending at the state-year level in education, income support (cash/near cash that goes to families and supports spending on basic needs); health; and other spending (e.g., housing, libraries, parks). Our second data source is the State Safety Net Database produced by the Brookings Institution. These data contain estimated benefit amounts for several public programs generated using state and federal program rules for a simulated sample of non-disabled, non-immigrant, single-mother families with one or more children under age 18, averaged by state and year from 2001 to 2022 (we focus on the period between 2017-2022). A primary benefit of these simulated generosity measures is that, because they are based on a national sample, they provide estimates of program generosity that are separated from state-specific changes in economic or demographic characteristics, and thereby afford more causal estimates.

Linking these two sources of data on state investments to household-level data from the CPS-ASEC, we will use a combination of two-way fixed effects (FE) and simulated eligibility approaches to analyze how state spending is associated with family economic resources. We will test two hypotheses: 1) that state spending is associated with improved measures of family economic well-being (poverty; food insecurity as a measure of material hardship; income from particular transfer programs); and 2) increased state spending is more strongly associated with the economic well-being of less-educated and Black and Hispanic households as compared to their higher-educated and non-Hispanic White peers.

Authors

• Jiwan Lee, Brown University
  Presenting Author

• Margot Jackson, Brown University
  Non-Presenting Co-Author

• Taryn W. Morrissey, American University
  Non-Presenting Co-Author