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Understanding Poverty

In 1964, President Johnson declared a War on Poverty. Fifty years later, there are still 46.5 million poor Americans. Just as poverty rates vary significantly by age, race, and location, the effectiveness of policies and programs differ by place and population. Urban Institute researchers rigorously study poverty and help to advance our understanding of effective anti-poverty policy. Below is a collection of our most relevant resources.

Who Is Poor?
In 2012, over 15 percent of Americans were poor, and no higher rate has been seen since 1965 (though the current rate was matched in 1983 and 1993). More Americans were poor in 2012 than ever before, over 46.5 million people. And over a third of the poor—6.6 percent of the US population—is deeply poor, earning less than $6,000 a year (or raising a child on less than $7,600). Understanding the nature of poverty—its relationship to employment, the difference between asset and income poverty, and how various populations are affected by poverty—is crucial for developing effective, targeted policies.

Child Poverty
As with the overall poverty rate, the child poverty rate has grown in recent years, reaching 22 percent in 2011. The boom in child poverty not only harms these children’s present, it handicaps their future. Growing up in poverty can harm children’s well-being and development and limit their opportunities and academic success. However, safety net programs such as Medicaid, CHIP, and SNAP do mitigate some short-term challenges that impoverished children face.

Poverty and Place
The neighborhoods we live in shape our health, our prosperity, and our children’s educational success. Residents of high-poverty neighborhoods do worse on a variety of measures, even when they are not impoverished. Many attempts to address poverty, such as the Urban Institute’s HOST demonstration, focus on place. These programs seek to ensure that poor families live in neighborhoods of opportunity, not restraint.

Consequences of Poverty
Homelessness, poor health, hunger—poverty’s consequences can be severe. These are frequently long-term consequences that lead to families that are persistently poor across generations. Unemployment is an important cause and effect of poverty, as poverty rates nearly triple among families unemployed 6 months or more, rising from 12.0 to 35.3 percent. And poverty imposes huge costs on society through lost productivity and higher spending on health care and incarceration.

What Works?
As federal antipoverty programs burgeoned amidst the War on Poverty, President Johnson recognized that not all these programs would work, that problems would evolve over time, and that causality wasn’t yet well understood. So he chartered a commission of business and civic leaders to figure out how best to apply scientific evidence and analysis to the social and economic policy challenges of the day. The Urban Institute is the product of that commission’s deliberations. To this day, rigorous analysis and evaluation is at the core of Urban’s work, and our researchers evaluate the effects of anti-poverty efforts of all kinds: from massive federal programs, such as Social Security, which elevates so many seniors from poverty, to the effects of the tax code, to state and local programs.

Measuring Poverty
The same formula has been used to measure poverty for almost 50 years, and many agree that this official measure is flawed. The creation of the detailed American Community Survey in 2006 allows researchers to take a more nuanced approach to measuring poverty at the state, federal, and local level. Further, the Urban Institute’s microsimulation models help us to estimate the effects of various policy changes on poverty rates.

Poverty in the Great Recession
Millions of families with children have not yet regained ground lost during the recession. The amplification of the safety net in 2009 may have forestalled the worst effects on the poor, and while we’ve seen that poverty rates increased for both children and adults, we still don’t know how the economic downturn affected the most vulnerable in the long-term.