Measuring Poverty As Multidimensional Material Hardship

Background: Material hardship has emerged as a direct measure of deprivation in the United States and an important alternative to income as a measure of poverty. Material hardship measures capture experiences of unmet basic needs due to insufficient resources, a comparatively direct measure of poverty. This study examines five types of material hardship to identify latent classes of multidimensional material hardship. Building on this cross-sectional measure, the study further identifies longitudinal patterns of multidimensional material hardship experience.

Methods: The study uses data from the Fragile Families and Child Well-Being Study (FFCWS), which is a birth cohort study, representative of non-marital births in large US cities in 1998-2000. Fragile Families is the sole, large-scale, national areas dataset with longitudinal and comprehensive information on material hardship. Following prior work, this study uses measures of five discrete material hardships, namely food, housing, medical, utility, and essential bill-paying hardships. I use latent class analysis (LCA) to consider these five dimensions of hardship concurrently. This approach combines the intertwined and summative strengths of multidimensional measures with the specificity and qualitative nuance of singular dimension measures, producing a complex and interpretable multidimensional measure of material hardship. Further, I identify longitudinal patterns of multidimensional material hardship using latent transition analysis (LTA), which calculates the likelihood of movement between the cross-sectional multidimensional material hardship classes over multiple points in time.

Results: Results identify novel, data-driven groups of multidimensional material hardship and longitudinal patterns of material hardship in US data. Three multidimensional material hardship groups emerged: limited material hardship is characterized by low probability of bill-paying hardship and very low probability of all other hardships; moderate material hardship is characterized by high probability of bill-paying hardship, moderate probability of utility hardship, and lower probability of housing, food, and medical hardships; and severe material hardship is characterized by very high probability of bill-paying and utility hardships, high probability of food hardship, and moderate probability of housing and medical hardships. Patterns describing families’ movement between these three multidimensional material hardship groups over time fall into six identifiable groups, namely: mostly limited; mostly moderate; mostly severe; improves; worsens; and inconsistent. These longitudinal patterns differentiate families’ experiences of stability or movement and relative severity of multidimensional material hardship over time.

Conclusions: These novel empirical results are the first to identify data-driven, multidimensional groups describing material hardship experiences and further to examine longitudinal patterns of material hardship. These findings improve our understanding of material hardship as a complex and valuable measure of poverty. Such knowledge informs our measurement of poverty and wellbeing in the US and shapes our development and evaluation of policies to effectively respond to, mitigate, and prevent the negative consequences of material hardship.