The Changing Safety Net for Low-Income Parents and Their Children: Structural or Cyclical Changes in Income Support...

Area of Science:

• Social Sciences
• Economics
• Public Policy

Background:

• Refundable tax credits and food assistance are key U.S. transfer programs for low-income working families.
• Simultaneous participation in these programs has more than doubled since the early 2000s, indicating a significant trend.

Purpose of the Study:

• To analyze the factors driving the growth in joint participation in food assistance and refundable tax credit programs.
• To differentiate the drivers of joint participation from those of food assistance alone.

Main Methods:

• Utilized two-year panels from the 1981-2013 Current Population Survey Annual Social and Economic Supplement.
• Estimated the impact of state labor-market conditions, federal/state policy choices, and household demographics on joint program participation.

Main Results:

• Policy changes were the primary driver of increased simultaneous use of food assistance and refundable tax credits.
• Labor market factors (cyclical and structural) and demographics were more significant drivers for food assistance alone.
• Since 2000, business cycle factors have become the leading determinant for joint participation, showing a stronger link to economic conditions.

Conclusions:

• Policy evolution is the main reason for the rise in dual enrollment in these essential support programs.
• Economic conditions have a growing influence on the uptake of both food assistance and tax credits.
• Understanding these drivers is crucial for effective social safety net policy.