This week we will be focusing on explanations of persistent poverty.
What is “persistent” poverty?
The description of persistent poverty is used to distinguish long-term poverty spells from those that are more transient in nature. In fact, most Americans will experience a poverty spell in their lifetime, so it is important to understand the difference between a relatively short incidence of poverty, due to job loss, sickness or some other life incident that results in a short term loss of income compared to a longer-term incidence of poverty that is not as easily recoverable. That being said, poverty can also be described as chronic or long-term within an individual’s life and not necessarily be “persistent” if their children grow up to earn a higher income as adults. Generally when people talk about the “persistently poor” they imagine poverty that persists from generation to generation. Of course, chronic and persistent poverty are related when the chronic poverty of a parent leads to lower outcomes for their children.
Persistent poverty is one primary concern of those who study inequality. The fear is that high inequality may in effect cause persistent poverty if class stratification becomes so divergent that it becomes extraordinarily difficult to enter from the “underclass” to the “upperclass.” Whether inequality causes this type of immobility will be explored later as we get into studies of intergenerational mobility.
Who experiences persistent poverty?
Policy discussions of ending poverty often focus on poor children, who can hardly be blamed for being born into a situation that places them at a significant disadvantage. In the long-term Panel Study of Income Dynamics (PSID), just under 10% of children had family incomes below the official poverty line for more than half of the period between 1979 and 1994. (The Economic Costs of Poverty in the United States: Subsequent Effects of Children Growing Up Poor, 12)
A study by Mark Rank and Thomas Hirschel of The Likelihood of Poverty across the American Adult Life Span found that by age 65 more than half of adult Americans will have experienced at least a year of poverty, and that most spells last for only a few years. They also found that the probability and average length of poverty is significantly different by race:
“One quarter of white Americans experienced poverty at some point during the 13-year [study] period compared with two-thirds of black Americans. Furthermore, 67 percent of white Americans who experienced poverty were poor for three years or less, whereas the figure for black Americans was only 30 percent. Consequently, black Americans were more likely to be touched by poverty and more likely to be exposed to poverty for substantially longer periods” (Rank, Hirschel 202)
Even more striking, they found that by age 75, Black Americans had over a 90% chance of experiencing poverty, while for White Americans that probability was just over 50%. This extreme gap can be seen clearly in the graph below.
[IMAGE SOURCE: Rank and Hirschl, 211]
Unsurprisingly, another study by a researcher at the Census Bureau found that people who experience chronic poverty (defined in her study as people who experienced one or two spells of poverty totalling 90% of a four year period) are more likely to be “Black, Hispanic, under the age of 18 or over the age of 65, and without a college education.” They are also more likely to be female and live with a female head of household. In addition, approximately one third had a disability that limited work. (Edwards, 9)
Geography also plays a role in persistent poverty. The Economic Research Service at the US Department of Agriculture defines persistent poverty at the county level, with those counties who have 20% or higher poverty for 30 years as persistent poverty counties. The vast majority of these 353 counties are located in the south and 85% are nonmetro areas, as you can see on this map:
[IMAGE SOURCE: USDA, Economic Research Service]
Why does poverty persist?
This question is really the heart of the matter, because any effort to reduce poverty or its persistence requires answering “why” first. There are a number of theories posited to explain poverty, and recent research on neighborhoods and child brain development has added significantly to the knowledge base. Here I will outline a few of the major theories.
Cultural explanations are popular for explaining poverty because people who are poor seem to operate differently than people who are not poor. While of course the experience of poverty will affect people’s behavior, this explanation sometimes stems from harmful stereotypes that poor people are lazy, entitled, and morally bankrupt.
In “Culture” and the Intergenerational Transmission of Poverty: The Prevention Paradox, Ludwig and Mayer explore the notion that a traditional family structure, parental work and religion could reduce poverty, an idea sometimes perpetuated by policymakers. They first remind readers than many adults who experience poverty were actually raised in this “ideal” type of situation that policymakers promote as the cure to poverty and emphasize the limitations of cultural change as policy. Then, even accepting this as truth, they find that “If eighth graders lived with their biological parents, at least one parent worked, and the child attended religious services, poverty in their generation would fall by 22 percent, assuming that the effects of these indicators of culture on children’s poverty status are entirely causal.” (187) Hardly a silver bullet.
There is merit however in explanations that revolve around the concept of social exclusion and networking gaps. In Understanding Persistent Poverty: Social Class Context in Rural Communities, Sociologist Cynthia Duncan explains how class cultural divides can cause challenges when people who grew up poor try entering the working world. She emphasizes research by others that demonstrate how “participation requires talking, thinking, and acting like those who manage America’s institutions,” and how when poor people do not have the same cultural ‘toolkit’ as those who grew up nonpoor, they find it more difficult to enter mainstream society and network for opportunities. (108)
Political Economy or Institutional Explanations
Institutional explanations are often seen as the opposite of cultural explanations, because while the impetus for change under cultural theories rests largely on the poor themselves, the impetus for change under institutional explanations rests on the state. Institutional explanations do not mean easy solutions however, as they include the likes of institutional racism and historical and political power differentials. Considering the racial and geographic dynamics described above, historical explanations are more than appropriate to consider.
Cynthia Duncan did research in rural Texas, Mississippi and Appalachia and illustrates in her paper how the political economy of these communities is structured in a way that maintains stratification:
“Accounts of rural life in the deep South describe rigidly stratified communities. The poor are completely dependent on the wealthy, who maintain their privilege through control over labor and most social institutions that affect the poor… Given this social structure, the poor have no opportunities to improve their status, and their limited prospects engender a kind of fatalism that eschews achievement and individual mobility. The ‘cultural tool kits’ they develop do not equip them for mobility, and everyday interaction reminds them of their place at the bottom.” (Understanding Persistent Poverty: Social Class Context in Rural Communities, 112)
Neighborhood or “Place” Explanations
Institutional and historical explanations also tie in with neighborhood explanations that have become more dominant recently thanks to work by Harvard economist Raj Chetty. (If you are interested, you can watch a recording of a presentation by him at a Center on Budget and Policy Priorities event here: The Role of Neighborhoods in Persistent Poverty).
The idea is that the place in which one grows up has a significant impact on future potential. Presumably, areas with higher densities of poverty have less social capital and opportunities than areas with lower poverty.
An experiment called Moving to Opportunity in the US studied the effect of neighborhoods by moving poor people out of high poverty neighborhoods and into low poverty neighborhoods using randomized housing vouchers. It was only fairly recently that the longer term impacts of the study were evaluated by Chetty and others, who found that those who moved to a low poverty area before 13 years of age earned on average $3,477 more per year in their mid-twenties compared to those who did not. (The Effects of Exposure to Better Neighborhoods on Children: New Evidence from the Moving to Opportunity Experiment, 1)
“We estimate that moving a child out of public housing to a low-poverty area when young (at age 8 on average) using an MTO-type experimental voucher will increase the child’s total lifetime earnings by about $302,000.” (Chetty et al, 5)
In Understanding Persistent Poverty: Social Class Context in Rural Communities, Cynthia Duncan describes how a community with a large middle class may be less stratified and so more inclusive, with better opportunities for networking and increased social capital. However, the MTO experiment found negative effects on those who moved after the age of 13 and no effect on the adults who moved. This indicates that neighborhood has significant effects on development, which brings us to the final explanation.
How poverty affects the brain has been a sensitive research subject for many years and is conducted delicately so as not to cause policymakers to get the wrong idea about the correlation between poverty and cognition. However, there is new evidence to suggest that poverty has a significant impact on brain development in early childhood, especially among children under 5 years of age. (The Long Reach of Early Childhood Poverty, 25).
In The Long Reach of Early Childhood Poverty, Greg Duncan and Katherine Magnuson outline the long term effects of child poverty, including the completion of schooling, income and work hours, while also highlighting that poverty during adolescence may also have future effects on health and birth outside of marriage. To illustrate these effects, the authors presented the following charts:
[SOURCE: Duncan and Magnuson, 27]
Recent research has led to some major breakthroughs, especially about the importance of targeting poverty assistance at young children. The Moving to Opportunity experiment has demonstrated positive neighborhood effects on young children while scientists have discovered a link between brain development and poverty that has similar implications.
The persistence of poverty is an issue that we will continue to explore from the angle of intergenerational mobility. Knowing that many Americans experience poverty firsthand is important when considering downward mobility, while understanding some of the causes of intergenerational and persistent poverty will help explain some of the immobility at the bottom.
Next week we will explore the top one percent as a contrast to the description of persistent poverty, before we begin a four week segment on intergenerational mobility.
As always, you can leave me a message through the Contact Me page, and you can find the reading list here:inequality-social-mobility-and-public-policy-readings-schedule