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Social Safety Net Support After the Great Recession

April 10, 2018

Stanford’s Center on Poverty and Inequality (CPI) has released a new report by RSF grantee Robert Moffitt (Johns Hopkins University) and Gwyn Pauley (University of Wisconsin­–Madison) on trends in the distribution of social safety net benefits during and after the Great Recession. As the worst economic downturn in the U.S. since the Great Depression, the Great Recession prompted an increase in enrollment in safety net programs such as the Supplemental Nutrition Assistance Program (SNAP), Unemployment Insurance (UI), Medicaid, and more. In response to rising demand, the federal government expanded eligibility or allocated temporary additional funding for several of these programs. This increased spending, Moffitt and Pauley write, “was widely distributed across all demographic and economic groups within the low-income population—to single-parent families and two-parent families, the elderly and non- elderly, the disabled and nondisabled, and to the poorest families with the lowest private incomes as well as those with higher (but still low) levels of private income.” 

Prior to the recession, increases in social safety net spending disproportionately benefited the disabled and elderly. In their study, Moffitt and Pauley investigate whether these pre-recession trends have resumed now that the recession has officially ended and the temporary additional federal funding is expiring. Some of their key findings include:

  • Preliminary evidence on social safety net spending after the recession suggests that trends in support for the disabled and elderly families no longer differ to any substantial degree from those for nonelderly and nondisabled families, nor are the differences in trends in support for married-parent and single- parent families significant.
  • However, the poorest have seen marked declines in support since the peak of the recession, returning close to pre-recession levels. Those with the lowest incomes continue to experience declines in Temporary Assistance for Needy Families (TANF) receipt since the recession as well as declines in receipt of housing benefits. 
  • At the same time, transfers for those with incomes just above and below the poverty line have declined little since the recession peak and in some cases have not declined at all, leaving their post-recession support far above pre-recession levels. The increase in Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) transfers has benefited families with incomes near the poverty line much more than it has benefited families living in deep poverty.
  • SNAP receipt has continued to grow for families of all types and at all income levels since the recession.

“The work-based safety net, which has evolved over the last several decades, provides significant support for those with earnings from employment,” the authors write. “Challenges remain, however, with work incentives impeded by low skills, low wages, and, for many, insufficient sources of child care and transportation.”

Download the full report from Stanford Center on Poverty and Inequality.

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