Project:
Public Assistance and Working Poor Families: Has the Nation Become More Like the Rural South?

Year: 2003

Investigator: Mills, Bradford, Brian Whitacre, and Christiana Hilmer

Institution: Virginia Polytechnic Institute and State University

Project Contact:
Bradford Mills
Department of Agricultural and Applied Economics
Virginia Polytechnic Institute and State University
314 Hutcheson Hall
Blacksburg, VA 24061
Phone: 540-231-6461
bfmills@vt.edu

The last two decades have brought profound changes in U.S. social welfare policies. The changes were driven in part by the idea that able-bodied adults should work to support their families, and that their families should be able to escape poverty by earnings from work perhaps supplemented by Federal programs, such as the Earned Income Tax Credit. In 2002, 36 percent of persons below the national poverty line were in families where adult members worked on average more than 1,000 hours per year. This represents a substantial increase from 28 percent of persons in poor families with the same level of attachment to the workforce in 1982. The rural South, historically the poorest region of the country, shows different trends from the nation as a whole, with the share of the poor in working families essentially constant at about 36 percent in 1982 and 2002.

This study provided a comprehensive portrait of working poor families and their use of food stamps and cash assistance nationally, in rural America, and in the rural South. The authors used Current Population Survey data at 4-year intervals from 1982 to 2002. The study found that the share of working poor families headed by a person who was Hispanic, a single parent, or who had some education beyond high school, was higher in 2002 than in 1982. In 2002, the characteristics of working poor families in the rural South appear to be much more similar to those seen in the Nation as a whole than in 1982. This similarity suggests that a comparable set of policies to address family characteristics that perpetuate poverty in the Nation may be employed in the rural South.

Families headed by a person with no more than a high school degree were more likely to be poor in 2002 than in 1982, which offset decreases in the poverty rate that resulted from the average increase in education levels. Thus families, particularly in the rural South, increasingly need a member with some college education to substantially increase income and reduce the risk of being a working poor family. However, the rural South appears to have experienced less severe erosion in economic well-being among families headed by a person with a low level of education. This regional difference is largely because the levels of economic well-being associated with a high school degree or less were initially lower in the rural South than in the Nation as a whole in 1982.

The authors also identified factors associated with food stamp and cash assistance use among the working poor. While overall rates of food stamp use by working poor families were similar in 1982 and 2002, there has been a significant structural change in the relationship between food stamp use and family characteristics. The differential propensity for African Americans to use food stamps has diminished. Hispanic-headed families are more unlikely to use the FSP relative to non-Hispanic families.

The study also found a decrease in the probability that working poor families used cash assistance and food stamps. The authors suggest that part of the decline in food stamp use may be linked to the increased requirements for households to periodically certify their eligibility for food stamps. Efforts have been undertaken in some States to streamline program reauthorization procedures and establish office hours that accommodate working family heads.