Working Paper: NBER ID: w1567
Authors: Rebecca M. Blank; Alan S. Blinder
Abstract: This paper investigates the impacts of macroeconomic activity and policy on the poverty population. It is shown that both the poverty count and the income share of the lowest quintile of income recipients move significantly with the business cycle. The differential impact of inflation versus unemployment on low income groups is analyzed at length.The evidence indicates that unemployment has very large and negative effects on the poor, while inflation appears to have few effects at all. In addition, changes in tax policy since 1950 have led to decreasing progressivity in the overall tax structure. Special attention is given to changes in the poverty rate over the past decade and to prospective changes in the remainder of the 1980s.
Keywords: Macroeconomics; Poverty; Income Distribution
JEL Codes: I32; E24
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| economic downturns (F44) | poverty rates (I32) |
| economic expansions (E32) | poverty rates (I32) |
| tax policy changes (H29) | progressivity of tax structure (H20) |
| unemployment (J64) | poverty (I32) |
| unemployment (J64) | income share of the lowest quintile (D33) |
| inflation (E31) | income share of the lowest quintile (D33) |