Patterns of Public, Private, and Informal Safety Net Use By Working-Class Households during and after the Great Recession

Background/Purpose:

Little research has explored the trajectories of public and private safety net program and social support use among working class households (100% - 250% FPL) during and after the Great Recession. We focus on several key questions in particular: First, to what extent did households who were working-class in wave 1 receive different public assistance programs and help from formal charity and informal sources of support over the course of three waves? Second, how did subgroups within working-class households use the three types of support when experiencing different patterns of unemployment (episodic spells of four months or less, greater than 12 months at a stretch, only one spell of unemployment early in the recession, etc.)?

Methods:

We use data from three waves (2009, 2011, 2013) of the Michigan Recession and Recovery Study (MRRS) to examine benefit receipt from public programs, private charity, and informal monetary support among a representative sample of 751 households in the Detroit metropolitan Area.

We examine receipt of seven different public safety net programs, receipt of assistance from a nonprofit charity, and informal monetary support from family or friends. Household characteristics included are educational attainment, employment, work-limiting health condition, financial hardship, food insecurity, children in the household, marital status, gender, and religious attendance.

Variables to adjust for the complex sample design were included in all descriptive and regression analyses reported in this paper. Analyses utilize logistic, Poisson, and multivariate regressions.

Results:

Over the course of three waves, of working class households, 43% participated in no public programs, 25% used one public program, 18% used two, and 14% used 3 or more. Informal monetary support and charity were used by 39% and 11%, respectively. The proportion of households utilizing public programs increased significantly from wave 1 to wave 2, but did not decrease significantly by the wave 3 even though the recession had been over for several years.

Experiences of episodic unemployment spells or spells of 12 or more months were associated with a higher use of public programs and private charity, whereas one-time unemployment spells of 6 or fewer months saw a higher reliance on informal monetary support from family and friends. Black households and households with children were more likely to make use of charity and informal supports than nonblack households and those without children. Households reporting food insecurity and financial hardship were more likely to take advantage of all three types of support regardless of unemployment experience. Surprisingly, religious attendance was negatively associated with use of informal monetary support.

Conclusions and Implications: Within demographic subgroups there are significant differences in the use of each type of support. These findings can guide policy makers and nonprofit charities in understanding patterns of use and how to better target their programs. In addition, it can inform the direction of further research in the mixing of various types of supports for working-class households.