Simulating Expansions of Individual Anti-Poverty Programs Using Urban Institute's TRIM3 Model

• In Event: 1-182 - Reducing Child Poverty by Half in 10 Years: A National Academies Report

Integrative Statement

The U.S. has many effective anti-poverty programs. Academic studies typically focus on individual programs and seek to determine empirically whether the program lifts people from poverty and whether it has effects on other outcomes. In order to answer the counter-factual question of what would happen were we to expand anti-poverty programs beyond their current levels or adopt programs that do not yet exist in the U.S., a different approach is needed. The Urban Institute's Transfer Income Model, Version 3 (TRIM3) offers one such approach, allowing investigators to capture interactions between programs, effects on work effort, and spillover effects (since benefits to one person in a household will likely benefit others in the same household). TRIM3 is a comprehensive microsimulation model that simulates the major governmental tax, transfer, and health programs that affect the U.S. population, and can produce results at the individual, family, state, and national levels. Since the first TRIM model was operational in 1973, the TRIM models have been used to understand the potential outcomes of public policy changes such as welfare reform, tax reform, and national health care reform. It is used heavily by both government agencies as well as private-sector organizations. The TRIM3 model also allowed the committee to consider the effects of policies at different points in the income distribution such as 50%, 100% and 150% of the federal poverty line.

In its report, the committee considered 10 different individual policies that can be grouped loosely into programs that target the labor market; existing anti-poverty programs; and program ideas from other countries. We find that these programs have varying effects in terms of reductions in the numbers of poor children at various points in the income distribution, behavioral effects, and social inclusion, and that they can vary substantially in terms of tax payer cost. This presentation will focus on the results from these analyses and present the committee’s conclusions and recommendations pertaining to individual anti-poverty programs.

Authors

• Janet Currie, Princeton University
  Presenting Author

• Robert Moffitt, Johns Hopkins University
  Non-Presenting Author