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Poverty and the Incidence of Material Hardship, Revisited

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Working Paper Number SEHSD-WP2020-11

Introduction

The last twenty years have seen little decline in the incidence of poverty in the United States. In fact, after a decline in poverty during the strong economy of the 1990s, poverty increased in the wake of two recessions. Much less is known about trends in material hardships, such as food insufficiency and housing problems, which are intrinsically important outcomes. Using data from the 1992-2011 Survey of Income and Program Participation, we examine trends in seven types of material hardship (food, housing, neighborhood, bill paying, health, fear of crime, and lack of consumer durables) and how their incidence by poverty status changed over the period. We find declines in four of the seven hardships, with little change or moderate increases for the others. Declines were larger for hardship more dependent on longer-term income flows, while those more sensitive to short-term income fluctuations declined by less (or increased), suggesting that income volatility imposes important challenges for many households. Of key interest, declines in hardship were evident across all measures among the lowest-income groups over the period. This may result from a greater under-reporting of income over time and/or that family resources are not comprehensively counted in the official poverty measure.

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