Hidden Hardship: Three Essays on Material Well-Being and Poverty in the United States

Abstract

Who is poor? For decades, the Official Poverty Measure largely answered this question. Using measures of material hardship in the Survey of Income and Program Participation, it is clear that concrete material hardships extend far above the federal poverty line. 18% of all households experience this hidden material hardship above the poverty line, largely ignored by policy makers, ineligible for social assistance programs, and obscured by conventional poverty measures themselves. The duration of spells of material hardship indicate that a far larger proportion of the population is at risk of hardship than is commonly thought. Over a third of households experience either chronic or episodic hardship, compared the fifth of households in chronic or episodic poverty.

Racial disparities in the experience of material hardship are stark. Even when taking other demographic factors and wealth into account, the risk of experiencing material hardship for a white household earning $50,000 a year is similar to a black household that earns $125,000. A white household with a head who has a high school diploma has the same predicted probability of experiencing material hardship as a black household with head who has a bachelor’s degree. The events and shocks that trigger entry into, and exit from, a spell of hardship display similar racial disparities.

The main implication of these findings is that the current social safety net does not address the vast majority of households in material hardship, nor is it capable of doing so in its current configuration.