The Great Recession and the Social Safety Net

Area of Science:

• Social Policy
• Economics
• Public Health

Background:

• The Great Recession (2007-2009) posed significant economic challenges.
• Social safety net programs are crucial for mitigating economic hardship during downturns.

Purpose of the Study:

• To analyze the response of the social safety net during the Great Recession.
• To examine the distributional effects of increased transfer payments across demographic and income groups.

Main Methods:

• Analysis of aggregate per capita expenditures on key social safety net programs.
• Examination of transfer distribution across various demographic categories (e.g., family structure, employment status).
• Assessment of distributional impacts across income classes within the low-income population.

Main Results:

• Significant growth in per capita spending for programs like SNAP, EITC, UI, and Medicaid.
• Increased transfer payments were broadly shared across diverse demographic groups.
• The increase in transfer amounts showed limited progressivity within the low-income population, with EITC benefiting those with higher earnings more.

Conclusions:

• The social safety net demonstrated a robust and favorable response to the Great Recession.
• While broadly beneficial, the distributional impact varied, with certain programs like SNAP and UI offering greater support to those at the lower end of the income spectrum.