Racial Disparities in Entering and Exiting a Spell of Material Hardship: New Evidence from the Survey of Income and Program Participation

Background: Since the mid-20^th century quantitative turn in poverty research, much has been discovered about spells of income poverty. In contrast, little is known about how households enter in to and exit from a spell of material hardship. Measures of material hardships—the concrete deprivations such as food insecurity, difficulty paying essential expenses, housing insecurity, utility shutoffs and the like, that are often associated with income poverty—are only sporadically included in national surveys. Using the only repeated measures of material hardship in a nationally representative survey, we assess which events and shocks are associated with entry into a spell of material hardship, and what forms of assistance are associated with an exit from a spell of hardship.

Methods:

Data and Sample:The Survey of Income and Program Participation (SIPP) is a longitudinal survey and representative of the non-institutionalized civilian population of the United States. This paper uses waves 6 and 9 of the 2008 panel of the SIPP, a sample size of over 65,000 households.

Methods: Descriptive statistics and multinomial logistic regressions are used to understand the role that external shocks and forms of assistance play in the transitions into and out of a spell of material hardship.

Results: Significant racial disparities exist in how likely households are to enter a spell of hardship based on the type of shock or event experienced by the household. For example, a white household that experiences some unemployment between wave 6 and wave 9 has the same predicted probability of entering a spell of material hardship as black households in which workers are continuously employed. Similarly, white households with unstable incomes have similar predicted probabilities of entering a spell of hardship as black households with stable incomes.

Conclusions and Implications: Poverty as often discussed, and particularly as measured by the Federal poverty line, often obscures the breadth and depth of material hardship experienced by American households. Over a two-year period of time, 45% of households report income poverty, some type of material hardship, or both. Previous cross sectional analyses and non-representative samples have obscured the level of churning in and out of material hardship experienced by households. Furthermore, even when controlling for income, wealth, and other forms of support, households do not appear to react similarly to shocks and events. In general, non-white households are more likely to enter a spell of material hardship, but not necessarily more likely to exit a spell of hardship. This implies that race neutral policies and interventions aimed at preventing spells of hardship could in fact reinforce existing racial hierarchies.