What is at risk in federal efforts to shift priorities away from the safety net? This study evaluates the effects of key income-tested programs on material hardship in the United States. It is the first study we are aware of to measure the effects of multiple program receipt on unmet medical or dental need and the total number of hardships experienced.
These are our key findings:
- Participating in Temporary Assistance for Needy Families, the Supplemental Nutrition Assistance Program, or Medicaid or the State Children’s Health Insurance Program reduced material hardship 48 percent among low-income households with children. This large reduction points to the risk posed by cutting safety net programs. Families might not be able to meet their basic needs should these safety net programs be cut.
- Safety net programs are not just good for families in tough times; they can also be good for the economy. When program spending increases during a recession and puts money in the hands of low-income families, people with low incomes are more likely to spend money and stimulate the economy.
- Increases in the regular minimum wage had no effect on material hardship, but our results suggest that increasing the subminimum wage to the regular minimum wage would reduce the number of hardships and the unmet medical or dental need families experience.
Although many commentators point to the persistence of poverty and hardship as evidence that safety net programs do not work and are a waste of taxpayer dollars, our analysis suggests that hardship would be even more prevalent without such programs.