How Geography Affects Low-Income Americans
In the United States, geography affects everything from economic mobility to lifespan.
In a paper published earlier this year, the economist Raj Chetty and a number of co-authors explored the life expectancies of the rich and poor. They found not only a staggering rich-poor life expectancy gap, but also that the life expectancies of the poor vary greatly depending on location, with low-income people in certain cities living approximately five years longer than those in other cities.
The researchers determined that living in a wealthy city with a well-educated population, a higher proportion of immigrants, and larger government expenditures produced the longest life expectancies for low-income people. In other words, the local social safety net matters.
Unfortunately, the robustness of the safety net is increasingly dependent on geography, as a new discussion paper from the University of Wisconsin’s Institute for Research on Poverty makes clear. Thanks to our country’s fascination with federalism, and especially the welfare reforms of 1996, the majority of safety-net programs for the poor today are administered, and at least partially financed, by state governments. Even programs that are entirely funded by the federal government (and therefore theoretically less vulnerable to the budgetary shortfalls or whims of state government) are often administered at the state level, and are thus dependent on a robust outreach and enrollment effort by state and local governments. And not every state prioritizes outreach and enrollment, a reality that results in stark inequalities across states in the access to the social safety net that’s provided to low-income folks. As Institute for Research on Poverty researchers Sarah Bruch, Marcia K. Meyers, and Janet Gornick point out, “the saying ‘pick your parents well’ can now be expanded to ‘and hope they live in a state with a robust safety net.”
Bruch, Meyers, and Gornick use a unique data set, the State Safety Net Policy data set, which allows them to measure state-level variation in both benefit levels and inclusiveness, or how many needy families are actually reached by safety net programs. Across 11 different kinds of assistance — cash assistance, food assistance, health insurance, child support, childcare, early education, unemployment insurance, state income taxes, cash assistance-based employment services, housing assistance, and child disability assistance — the researchers found significant state-level variations in benefit levels. The highest variation occurred in the programs for which states bear more responsibility to fund and administer, such as early education, targeted work assistance, cash assistance, and childcare. According to Bruch’s research, a low-income family on welfare in a state around the 10th percentile (with respect to benefit levels) receives an average benefit of $1,957. A similarly situated family in a state near the 90th percentile, meanwhile, gets an average benefit of $5,811.
Bruch and her co-authors also found that program inclusiveness varies more widely, and even the most inclusive states don’t do a great job of reaching everyone, serving less than two-thirds of those in need. The inclusiveness numbers for Temporary Assistance for Needy Families are particularly grim: States at the 90th percentile reach approximately one-in-three families; those around the 10th percentile provide benefits to less than one-in-10 needy families.
The researchers claim their work illustrates the important, often underappreciated and under-researched role, of state-level administration. “Are states either doing outreach with food stamps, or are they doing things that are more diversionary?” Bruch says. “These things really impact the degree to which, even though there’s a policy on the books that’s supposed to support low-income families, many low-income families aren’t getting these benefits.”
These differences, across both state benefit levels and inclusiveness, are not insignificant. Bruch and her co-authors conclude that state-level variations in benefits are actually similar to, or greater than, variations across European countries. “The fact that we see just as much as variation here as there is across other welfare countries…. I mean these are countries with completely different welfare regimes,” Bruch says. “We think of them as just so different. It’s pretty shocking to find that these countries are more similar than our states are.”
Taken together, Bruch and her colleagues’ findings suggests that the consequences of decentralization have been significant, and not fully understood, for many poor Americans. “As a sociologist, I’m interested in the difference in the social contract of what we give to people who just by happenstance happen to live in different states in the country,” Bruch says. “I think most people are unaware of how different the social safety net is, so that a similarly situated family in one state receives a really different level of assistance than a family in a different state.”