Winning the War: Poverty from the Great Society to the Great Recession
This paper considers the long-run patterns of poverty in the United States from the early 1960s to 2010. Our results contradict previous studies that have argued that poverty has shown little improvement over time or that anti-poverty efforts have been ineffective. We find that moving from traditional income-based measures of poverty to a consumption-based measure (which we argue is superior on both theoretical and practical grounds) and, crucially, adjusting for bias in price indices leads to the conclusion that the poverty rate declined by 26.4 percentage points between 1960 and 2010, with 8.5 percentage points of that decline occurring since 1980. Consumption poverty suggests considerably greater improvement than income poverty for single parent families and the aged, but relatively less improvement for married parent families. Our analyses of the proximate causes of these patterns indicate that changes in tax policy explain a substantial part of the decline in poverty and that social security has been important, but that the roles of other transfer programs have been small. Changes in education have contributed to the decline, while other demographic trends have played a small role. Measurement error in income is likely to explain some of the most noticeable differences between changes in income and consumption poverty, but saving and dissaving do not appear to play a large role for most demographic groups.
We would like to thank the Annie E. Casey Foundation, the Earhart Foundation, and the National Poverty Center for support and Cristobal Gacitua, Matt Gunden, Tom Murray, Vladimir Sokolov, Laura Wherry, and April Wu for excellent research assistance. We have also benefited from the comments of Steven Haider, Hilary Hoynes, Erik Hurst, Christopher Jencks, Steve Landefeld, Kathleen McGarry, Doug McKee, David Romer, Tim Smeeding, Justin Wolfers, and seminar participants at the Brookings Institution, Colby College, Harvard University, the Higher School of Economics, the Institute for Research on Poverty at the University of Wisconsin, the National Bureau of Economic Research, the University of California, Davis, the University of California, Los Angeles, the University of California, Santa Cruz, the University of Chicago, the University of Florida, the University of Notre Dame, and the W.E. Upjohn Institute for Employment Research. This paper supercedes earlier papers titled "Dimensions of Progress: Poverty from the Great Society to the Great Recession," "Five Decades of Consumption and Income Poverty" and "Three Decades of Consumption and Income Poverty". The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
- The combination of targeted economic policies and policies that support growth has had a significant impact on poverty. In Winning...
Bruce D. Meyer & James X. Sullivan, 2012. "Winning the War: Poverty from the Great Society to the Great Recession," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 45(2 (Fall)), pages 133-200. citation courtesy of