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The first two decades of the twenty-first century have been marked by the Great Recession (GR), which was followed by the longest recovery in U.S. history, here termed the Long Recovery (LR). The LR lasted more than 10 years and ended with a pandemic bang in March 2020. This article introduces the eighteen articles that make up our review of the effects of the LR on the working class. What did more than a decade of economic expansion following the GR do for the working class and various groups of disadvantaged workers? We study this question through the lenses of economics, demography, sociology, and policy. The working class—lower-middle-income units, especially those whose adults have low education levels or other credentials—was hit hard by the GR. Did groups who are usually at a labor market disadvantage in fact make absolute and relative gains in incomes and living standards during the LR? Lessons from the LR will help to inform policy efforts to sustain the postpandemic economic expansion, which is still under way as of this writing.

The United States boasts the largest and arguably richest economy in the world, yet it leads high-income countries in the fraction of children living in poverty. Policy debates about child poverty are contentious in two important ways: 1) Although poverty itself is measured by comparing family income with a poverty threshold (currently around $28,000 for a family of four), whether income itself is the driving force behind the negative associations between poverty and child well-being is unclear. Some believe that other conditions associated with low income, such as single-parent family structure, matter the most. If income is immaterial, policies designed to boost family income are unlikely to help poor children. 2) Many policies designed to help families meet their basic needs carry with them a risk that recipients will either not seek work or, if they are already working, reduce effort and even drop out of the labor force altogether. Some fear that children growing up in families in which no adult is employed may themselves work less when they reach adulthood. Thus, even if these programs reduce short-run poverty, they may increase intergenerational poverty, suggesting a need for programs that simultaneously reduce poverty and increase paid employment. Both of these issues were at the heart of the deliberations of the National Academies of Sciences, Engineering, and Medicine’s Committee on Building an Agenda to Reduce the Number of Children in Poverty by Half in 10 Years. The committee was formed in 2016 when Congress directed the National Academies to conduct a comprehensive study of child poverty in the United States. The core of its Congressional charge was to review research on linkages between child poverty and child well-being and identify evidence-based programs and policies that could reduce the number of children living in poverty in the United States by half … [↵][1]1To whom correspondence may be addressed. Email: gduncan{at}uci.edu. [1]: #xref-corresp-1-1

The paper documents child poverty levels and trends using both relative (‘deep’) and absolute (‘extreme’) measures in two clusters: Anglo-Saxon high-income countries and upper middle-income countries. We also investigate the influence of different components of household income and other resources on child deep-poverty rates to examine the role of the market and the redistributive effects that materialize through private transfers, public benefits, and tax systems on generating poverty reduction. Overall, middle-income nations have witnessed continuous reductions in their extreme child poverty rates, while mild decreases or fluctuations have been observed in the five high-income nations, with the US highlighted by its relatively high rates of deep and extreme poverty regardless of absolute or relative measures and type of equivalence scale used. Private institutions play a larger role in poverty reduction in middle-income nations compared to its impact on developed nations. The degree of dependence on universal or assistance benefits varies among high-income nation. In the US, universal programs tend to be meager, while Australian social insurance and universal benefit are robust in their fight against deep poverty. Brazil stands out by its overwhelmingly large proportion of social insurance programs that contribute to improvements of its deep child poverty situation, and South Africa’s assistance benefit system performs better in lifting children out of deep poverty.

The American Opportunity Study is an ongoing initiative to build the country's capacity to access and analyze linked administrative data. It is best viewed as a population-level scaffolding on which other administrative data can then be hung. This scaffolding, if used as a stand-alone resource, will allow for long-run analyses of fundamental population and labor market processes. If combined with data from other sources, it will allow for long-run program evaluation and other experimental and quasi-experimental analyses. We discuss the current status of the American Opportunity Study, its potential to advance the field, remaining obstacles that must be overcome to build it, and how it can work within the guidelines suggested by the Commission on Evidence-Based Policymaking.

We review research on institutions of redistribution operating in high-income countries. Focusing on the nonelderly, we invoke the concept of the household income package, which includes income from labor, from related households, and from the state. Accordingly, we assess three institutional arenas: predistribution (rules and regulations that govern paid work), private redistribution (interhousehold transfers), and conventional public redistribution (operating via cash transfers and direct taxes). In each arena, we assess underlying policy logics, identify current policy controversies, summarize contemporary cross-national policy variation, and synthesize existing findings on policy effects. Our assessment of redistributional effects focuses on three core socioeconomic outcomes: low pay, child poverty, and income inequality. We close by assessing how the three institutional arenas perform collectively and by calling for further work on how these institutions change over time and how they affect subgroups differentially.

Refundable tax credits and food assistance are the largest transfer programs available to able-bodied working poor and near-poor families in the United States, and simultaneous participation in these programs has more than doubled since the early 2000s. To understand this growth, we construct a series of two-year panels from the 1981–2013 waves of the Current Population Survey Annual Social and Economic Supplement to estimate the effect of state labor-market conditions, federal and state transfer program policy choices, and household demographics governing joint participation in food and refundable tax credit programs. Overall, changing policy drives much of the increase in the simultaneous, biennial use of food assistance and refundable tax credits. This stands in stark contrast from the factors accounting for the growth in food assistance alone, where cyclical and structural labor market factors account for at least one-half of the growth, and demographics play a more prominent role. Moreover, since 2000, the business cycle factors as the leading determinant in biennial participation decisions in food programs and refundable tax credits, suggesting a recent strengthening in the relationship between economic conditions and transfer programs.

To reduce child poverty and income instability, and eliminate extreme poverty among families with children in the United States, we propose converting the Child Tax Credit and child tax exemption into a universal, monthly child allowance. Our proposal is based on principles we argue should undergird the design of such policies: universality, accessibility, adequate payment levels, and more generous support for young children. Whether benefits should decline with additional children to reflect economies of scale is a question policymakers should consider. Analyzing 2015 Current Population Survey data, we estimate our proposed child allowance would reduce child poverty by about 40 percent, deep child poverty by nearly half, and would effectively eliminate extreme child poverty. Annual net cost estimates range from $66 billion to $105 billion.

The PSID has remained a valuable vehicle for evidence-based policy research for decades and should remain so for many more. In this short review, I cover major policy-related strengths from PSID research in the areas of event history analysis; mobility and volatility; cross national comparisons; health and health insurance; mobility into and out of poverty; the effects of parental income on children; and the use of the child development sample to broaden the PSID policy focus in new and interesting ways. I also include the emerging study of longer term intergenerational patterns of mobility and transfer, including across three generations. Finally, I take up the question of how PSID data and methods could be further improved to make the survey more valuable to public policy, focusing on administrative data linkages.

Recent studies of economic inequality almost always separately examine income inequality, consumption inequality, and wealth inequality, and hence, these studies miss the important synergy between the three measures explicit in the life-cycle budget constraint. Using the Panel Study of Income Dynamics (PSID), we study inequality in three dimensions, focusing on the conjoint distributions of income, consumption, and wealth for the same individuals. We find that the trends in inequality in income, consumption, and wealth similarly increase between 1999 and 2013. We examine the pairwise distributions of our measures using the average propensity to consume and the wealth-income ratios. Using the longitudinal nature of the PSID, we follow people over this period and find mobility is similar using income, consumption and wealth. We conclude that while all three types of inequality are rising, wealth increasingly acts as a buffer to cushion income changes, which could reduce mobility - both intra- and inter-generational mobility.

Poverty during childhood raises a number of policy challenges. The earliest years are critical in terms of future cognitive and emotional development and early health outcomes, and have long-lasting consequences on future health. In this article child poverty in the United States is compared with a set of other developed countries. To the surprise of few, results show that child poverty is high in the United States. But why is poverty so much higher in the United States than in other rich nations? Among child poverty drivers, household composition and parent's labor market participation matter a great deal. But these are not insurmountable problems. Many of these disadvantages can be overcome by appropriate public policies. For example, single mothers have a very high probability of poverty in the United States, but this is not the case in other countries where the provision of work support increases mothers' labor earnings and together with strong public cash support effectively reduces child poverty. In this article we focus on the role and design of public expenditure to understand the functioning of the different national systems and highlight ways for improvements to reduce child poverty in the United States. We compare relative child poverty in the United States with poverty in a set of selected countries. The takeaway is that the United States underinvests in its children and their families and in so doing this leads to high child poverty and poor health and educational outcomes. If a nation like the United States wants to decrease poverty and improve health and life chances for poor children, it must support parental employment and incomes, and invest in children's futures as do other similar nations with less child poverty.

Studies of economic inequality almost always separately examine income, consumption, and wealth inequality, and hence, miss the important synergy amongst the three measures explicit in the life-cycle budget constraint. These joint distributions, however, are important in evaluating macroeconomic impacts of changes in income because the response may differ across the wealth distribution. This heterogeneity in the response to income changes can have significant impact on the effectiveness of government fiscal policy. Using the Panel Study of Income Dynamics from 1999–2013, we examine how the marginal propensity to consume (MPC) differs across the wealth distribution. We find that the MPC is lower at higher wealth quintiles, indicating that low wealth households cannot smooth consumption as much as other households. This implies that increasing wealth inequality likely reduces aggregate consumption, which, in turn, could limit economic growth.

This paper uses data from the key comparative sources available for the rich countries to examine how both real median incomes and income inequality have evolved from around 1980 through the Great Recession. There are striking differences across OECD countries in average real median income growth. Some increase in overall inequality has been common, but with wide variation in extent and timing. Top (pretax) income shares have generally been rising, but not always consistently with overall inequality from household surveys. A significant negative association between changes in Gini and median income is found across countries over time, and a significant negative relationship with changes in top shares only when controlling for economic growth. Economic growth and inequality trends together leave much of the variation in median incomes unaccounted for, so direct measures of how these incomes are evolving need to be central to monitoring progress towards inclusive growth.

By examining cross-nationally comparable measures of income and poverty, the author sheds some of that parochialism and come to appreciate how poverty compares to that of other nations, why we've embarked on the path we have, and where we might go in the future. Moreover, the author could do much better at reaching these goals if we made it a national priority to help those who try to escape poverty through their own work efforts. The official United States poverty line was 28 percent of this level in 2000, and 50 percent of this level in 1963 when it was first employed. The chapter defines poverty rates in the analyses that follow using this standard relative concept. The average rate of poverty is 10 percent across the twenty-one countries. If the nation is to be successful in reducing poverty, it will need to do a better job of combining work and benefits targeted to low-wage workers in low-income families.

In this paper, we review three data sets which summarize world-wide inequality across countries and years: World Development Indicators (‘WDI’)/‘PovcalNet’ and ‘All the Ginis’ (ATG), each of which has some origins at the World Bank. We hope to inform both experienced and novice users of the existence of these important data sets, provide a review of their benefits and drawbacks, suggest how to use them, and provide suggestions for future improvements. The review is grounded in the history of the development of such data sets, which also necessarily informs users of critical information and the types of choices one must make in order to understand how to measure and compare poverty and inequality over space and time.

We present a 50-year historical perspective of the nation's antipoverty efforts, describing the evolution of policy during four key periods since 1965. Over this half-century, the initial heavy reliance on cash income support to poor families has eroded; increases in public support came largely in the form of in-kind (e.g., Food Stamps) and tax-related (e.g., the Earned Income Tax Credit) benefits. Work support and the supplementation of earnings substituted for direct support. These shifts eroded the safety net for the most disadvantaged in American society. Three poverty-related analytical developments are also described. The rise of the Supplemental Poverty Measure (SPM)—taking account of noncash and tax-related benefits—has corrected some of the serious weaknesses of the official poverty measure (OPM). The SPM measure indicates that the poverty rate has declined over time, rather than being essentially flat as the OPM implies. We also present snapshots of the composition of the poor population in the United States using both the OPM and the SPM, showing progress in reducing poverty overall and among specific socioeconomic subgroups since the beginning of the War on Poverty. Finally, we document the expenditure levels of numerous antipoverty programs that have accompanied the several phases of poverty policy and describe the effect of these efforts on the level of poverty. Although the effectiveness of government antipoverty transfers is debated, our findings indicate that the growth of antipoverty policies has reduced the overall level of poverty, with substantial reductions among the elderly, disabled, and blacks. However, the poverty rates for children, especially those living in single-parent families, and families headed by a low-skill, low-education person, have increased. Rates of deep poverty (families living with less than one-half of the poverty line) for the nonelderly population have not decreased, reflecting both the increasing labor market difficulties faced by the low-skill population and the tilt of means-tested benefits away from the poorest of the poor.

We do not need to and should not have to choose amongst income, consumption, or wealth as the superior measure of well-being. All three individually and jointly determine well-being. We are the first to study inequality in three conjoint dimensions for the same households, using income, consumption, and wealth from the 1989-2016 Surveys of Consumer Finances (SCF). The paper focuses on two questions. What does inequality in two and three dimensions look like? Has inequality in multiple dimensions increased by less, by more, or by about the same as inequality in any one dimension? We find an increase in inequality in two dimensions and in three dimensions, with a faster increase in multi-dimensional inequality than in one-dimensional inequality. Viewing inequality through one dimension greatly understates the level and the growth in inequality in two and three dimensions. The U.S. is becoming more economically unequal than is generally understood.

Tony Atkinson is universally celebrated for his outstanding contributions to the measurement and analysis of inequality, but he never saw the study of inequality as a separate branch of economics. He was an economist in the classical sense, rejecting any sub-field labelling of his interests and expertise, and he made contributions right across economics. His death on 1 January 2017 deprived the world of both an intellectual giant and a deeply committed public servant in the broadest sense of the term. This collective tribute highlights the range, depth and importance of Tony’s enormous legacy, the product of over fifty years’ work. This is a discussion paper which subsequently has been published in The Review of Income and Wealth. © 2017 Wiley

The Great Recession (GR) was the most dramatic economic downturn the USA has experienced in more than six decades. But against this backdrop, the USA actually made some limited progress against child poverty over the Great Recession when one considers the new US Supplemental Poverty Measure which lies at about 40 per cent of median income. The main reason was the growth of a well-targeted near cash safety net, combined with earnings enhancements in the form of refundable tax credits. These enhancements helped the working poor, but not many parents of children who could not find jobs. However these improvements had little if any effect on relative poverty counted at a European or cross-national relative poverty standard set at 60 per cent of median income. Greater progress against child poverty in the US requires a continued strong job market coupled with a child allowance.

This article focuses on the complexities and idiosyncrasies of poverty measurement, from its origins to current practice. It first considers various concepts of poverty and their measurement and how economists, social statisticians, public policy scholars, sociologists, and other social scientists have contributed to this literature. It then discusses a few empirical estimates of poverty across and within nations, drawing primarily on data from the Luxembourg Income Study and the Organization for Economic Cooperation and Development (OECD) to highlight levels and trends in overall poverty, while also referring to the World Bank’s measures of global absolute poverty. In the empirical examinations, the article takes a look at rich and middle-income countries and some developing nations. It compares trends in relative poverty over different time periods and in relative and anchored poverty across the Great Recession.

The country’s capacity to monitor trends in social mobility has languished since the last major survey on U.S. social mobility was fielded in 1973. It is accordingly difficult to evaluate recent concerns that social mobility may be declining or to develop mobility policy that is adequately informed by evidence. This article presents a new initiative, dubbed the American Opportunity Study (AOS), that would allow the country to monitor social mobility efficiently and with great accuracy. The AOS entails developing the country’s capacity to link records across decennial censuses, the American Community Survey, and administrative sources. If an AOS of this sort were assembled, it would open up new fields of social science inquiry; increase opportunities for evidence-based policy on poverty, mobility, child development, and labor markets; and otherwise constitute a new social science resource with much reach and impact.

This paper examines the distribution of income and consumption in the U.S. using one dataset that obtains measures of both income and consumption from the same set of individuals. We develop a set of inequality measures that show the increase in inequality during the past 27 years using the 1984–2011 Consumer Expenditure Survey. We find that the trends in income and consumption inequality are similar between 1984 and 2006, and diverge during and after the Great Recession. For the entire 27-year period we find that consumption inequality increases almost as much as does income inequality.

This article estimates trends in the poverty rates in Wisconsin for the overall population, for children, and for the elderly between 2008 and 2010, using an alternative poverty measure. Our measure is similar to the federally implemented Supplemental Poverty Measure (SPM) but customized to reflect the place-specific needs and resources of Wisconsin. Unlike the official poverty measure, the Wisconsin Poverty Measure (WPM) considers tax credits and noncash benefits and adjusts for work-related and medical care expenses and relative living costs statewide and across substate regions. Using the American Community Survey and Wisconsin administrative data, the WPM shows essentially no change in state poverty rates between 2008 and 2009 and a decline between 2009 and 2010, although state poverty levels calculated via the official measure continued to increase between 2008 and 2010. We discuss the policy implications of results and how the WPM compares to the SPM and other local poverty measures.

We present evidence on the level of and trend in inequality from 1985-2010 in the United States, using disposable income and consumption for a sample of individuals from the Consumer Expenditure (CE) Survey. Differing from the findings in other recent research, we find that the trends in income and consumption inequality are broadly similar between 1985 and 2006, but diverge during the Great Recession with consumption inequality decreasing and income inequality increasing. Given the differences in the trends in inequality in the last four years, using both income and consumption provides useful information.

We build on cross-national research to examine the relationships underlying estimates of relative intergenerational mobility in the United States and Great Britain using harmonized longitudinal data and focusing on men. We examine several pathways by which parental status is related to offspring status, including education, labor market attachment, occupation, marital status, and health, and perform several sensitivity analyses to test the robustness of our results. We decompose differences between the two nations into that part attributable to the strength of the relationship between parental income and the child's characteristics and the labor market return to those child characteristics. We find that the relationships underlying these intergenerational linkages differ in systematic ways between the two nations. In the United States, primarily because of the higher returns to education and skills, the pathway through offspring education is relatively more important than it is in Great Britain; by contrast, in Great Britain the occupation pathway forms the primary channel of intergenerational persistence. © 2013 International Association for Research in Income and Wealth.

This paper explores trends in inequality and poverty using both market and after-tax and transfer income in the period during and after the Great Recession (through 2011). Using market income (or wages), inequality and poverty rose sharply between 2008 and 2010. The primary exception is measures for the top of the distribution annual wage and income shares of the top one percent dipped in 2008 and 2009. Including taxes and transfers, broad-based inequality measures also fell, and the poverty increase was muted. Tax and transfer policies lowered inequality and poverty, but those policies were not equal across the population. Poverty declined among the elderly, changed little among children, and rose sharply among the working-age. Inequality fell across the total population, but was unchanged among working-age households. Since 2009, as the economy has grown slowly, inequality has risen for all groups, and poverty remains high for the working-age.

Most empirical distributional studies of well-being in developed countries rely on distributions of disposable income. From a theoretical point of view this practice is contentious since a household’s command over resources is determined not only by its spending power over commodities it can buy in the market but also on resources available to the household members through non-market mechanisms such as the in-kind provisions of the welfare state and the value of private non-cash incomes. In developed market economies the most important private non-cash income component is imputed rent from owner-occupied or subsidized accommodation. Employing a wider definition of imputed rent that also allows the analyst to capture income advantages among tenants living in rent-subsidized accommodations of various sorts (including rent-free or reduced-rent households), the present paper examines the differential effects of including imputed rents in the concept of resources in five European countries (Belgium, Germany, Greece, Italy and the UK). The results suggest that in almost all cases, the inclusion of imputed rents in the concept of resources leads to a decline in measured levels of inequality and poverty. The main beneficiaries are outright homeowners and households living in rent-free (or heavily subsidized) accommodation—most often older persons. The inclusion of imputed rents in the concept of resources does not lead to substantial changes in the ranking of the countries according to their level of inequality, despite widespread differences in the rates of home ownership and subsidization across the countries studied here. This is the author’s version of a work that was accepted for publication in the Journal of Housing Economics. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in the document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of Housing Economics 19 (2010), 3, pp. 167-179 and is online available at http://dx.doi.org/10.1016/j.jhe.2010.06.002.

Poverty is generally defined as incom e or expenditure insufficiency, but the econom ic condition of a household also depends on its r eal and financial asset holdings. T his paper investigates measures of poverty that rely on indicators of household net worth. W e review and assess two m ain approaches followed in th e literature: incom e-net worth m easures and asset-poverty. We provide fresh cross-national evidence based on data from the Luxembourg Wealth Study.