Research by Author & Topic

Publications by Signe-Mary McKernan on Poverty and Safety Net

Slightly more than half of the U.S. population experiences poverty at some time before age 65. Roughly half of those who get out of poverty will become poor again within five years. Who is more likely to enter poverty? How long are people poor? And what events are associated with falling into and climbing out of poverty? This fact sheet summarizes key findings from the poverty dynamics literature to describe how, why, and when people move in and out of poverty.

The Census Bureau released its annual report on income, poverty, and health insurance coverage for the U.S. population on August 26, 2008. According to the report, median household income increased by 1.3 percent in 2007, while the overall poverty rate dipped slightly and the number and percentage of people without health insurance decreased. While the overall numbers were positive, not everyone shared in the economic gains. The number and percentage of children in poverty increased, and households in the lowest 40 percent of the income distribution had no significant income gains.

Low-wage jobs can be unstable, leaving families struggling to cope with employment gaps and financial emergencies that can strike without warning. About four in five low-income families are "asset poor," lacking enough liquid savings to live for three months at the federal poverty level without earnings. In this essay, McKernan and Ratcliffe suggest a cluster of policies that would improve financial markets and savings opportunities for low-income families across the life cycle.

Low-wage jobs can be unstable, leaving families struggling to cope with employment gaps and financial emergencies that can strike without warning. About four in five low-income families are "asset-poor," lacking enough liquid savings to live for three months at the federal poverty level without earnings. In this summary, McKernan and Ratcliffe suggest a cluster of policies that would improve financial markets and savings opportunities for low-income families across the life cycle.

This brief presents an empirical analysis of how asset tests affect families’ asset holdings. The findings suggest that more lenient asset tests and more generous IDA program rules can lead families to increase their asset holdings. Relaxed vehicle asset limits, for example, are associated with increased vehicle ownership. Since people often need a reliable car to get to work, this finding suggests that exempting at least one vehicle in all states may increase employment and job stability among low-income families. The findings also suggest that restrictions on withdrawals and incentives built into restricted asset accounts and IDA programs may provide families with motivation to build assets.

This report synthesizes current research and other available information on the assets and liabilities of low-income households into a variety of portraits. These data allow practitioners and researchers to begin to form a comprehensive representation of the balance sheets of low-income households and sets the stage for future research and policy discussion around the finances of low-income households.

This report examines the effects of a comprehensive set of 13 welfare, Food Stamp, individual development account (IDA), earned income tax credit (EITC), and minimum wage program rules on the asset holdings of low-education single mothers and families. This report finds empirical evidence that more lenient asset limits in means-tested programs and more generous IDA program rules may have positive effects on asset holdings of low-education single mothers and families.

Cash welfare and food stamps are means tested: assets and income must fall below set limits for families to qualify. While this ensures that benefits go to the neediest families, asset limits may also discourage asset building. This Opportunity and Ownership fact sheet examines allowance changes for restricted and unrestricted accounts at the federal and state level. It tracks the different allowances for IDAs, food stamps, and welfare programs from 1992 to 2003.

This paper uses monthly SIPP data from 1996 through 2003 and state-level policy data to measure the effects of specific food stamp and welfare policies, as well as the minimum wage and EITC, on the food stamp receipt of the low-income population. We find strong evidence that more lenient vehicle exemption policies, longer recertification periods, and expanded categorical eligibility increase food stamp receipt and that the use of biometric technology reduces food stamp receipt. We also find some evidence that more lenient immigrant eligibility rules, simplified reporting, implementation of the EBT program, and outreach spending increase food stamp receipt.

Signe-Mary McKernan and Caroline Ratcliffe, both senior research associates in the Urban Institute's Center on Labor, Human Services, and Population, study the intersection between welfare policy changes and poverty trends. Their recent report, The Effect of Specific Welfare Policies on Poverty, shows how some welfare policies boosted families' economic well-being-while others pushed mothers and children deeper into poverty.