Progress and Stagnation: U.S. Poverty, Deep Poverty, and the Safety Net, 1967–2023

• In Event: New Research on Long-term Trends in Income Poverty in the United States

Abstract

The United States has seen significant shifts in its safety net over the last six decades. While studies often examine changes in poverty rates, less attention is paid to the depth of poverty. Understanding not just what percentage of people are poor but how poor they are, is important for assessing the impact of government taxes and transfers.This research asks: How have the level and depth of U.S. poverty changed from 1967 to 2023, and what role have changes in government safety-net programs played in these trends?

The paper investigates the historical trajectory of poverty rates, the poverty gap, deep poverty rates (below 50 percent of the poverty line) and deep poverty gaps, exploring how policy expansions and retrenchments have affected different demographic groups.The study utilizes the Census Bureau’s Current Population Survey (CPS) data as well as historical Supplemental Poverty Measure (SPM) data produced by Columbia University’s Center on Poverty and Social Policy. We measure changes in poverty and deep poverty using both the "historical" SPM and an "anchored" SPM (tied to 2023 living standards and adjusted for inflation) to establish upper and lower bounds for long-term poverty trends. We employ the Poverty Gap Index (PGI) to quantify the size of the poverty gap as a proportion of the poverty line, capturing changes in the intensity of economic deprivation.

Between 1967 and 2023, both the overall poverty rate and the overall poverty gap declined markedly. Under the anchored SPM, the poverty rate fell by 54 percent and the PGI dropped 48 percent; the historical SPM shows declines of 26 percent and 20 percent, respectively. These improvements were predominantly driven by the expansion of social programs. Yet progress on deep poverty, and especially on the deep poverty gap, was considerably more modest, with the deep poverty gap showing little meaningful improvement. Benefits were unevenly distributed: the safety net strengthened for the elderly and working families with children but has weakened since the late 1980s for adults aged 18–64 not living with children. For this group, the deep poverty rate and deep poverty gap were noticeably higher in 2023 than in the late 1980s.

The paper demonstrates that expansion of the U.S. safety net has contributed strongly to substantial declines in both the rate and depth of overall poverty but sharp cuts in basic cash assistance for non-elderly, non-disabled adults who have little or no earnings and don’t live with children have contributed to a stalling of progress on deep poverty for this group. The paper’s data also indicate that cuts since the 1990s for single-parent families with little or no earnings and cuts to the eligibility of various groups of immigrants for certain benefits have lessened progress for those groups as well. These findings emphasize the need for policies that aid people in deep poverty, indicating that while the strengthening of the safety net has reduced poverty substantially overall, safety-net gaps leave some vulnerable populations behind.

Author

• Danilo Leandro Trisi, Georgetown University
  Presenting Author