Working Paper: NBER ID: w21676
Authors: Bruce D. Meyer; Nikolas Mittag
Abstract: We examine the consequences of underreporting of transfer programs for prototypical analyses of low-income populations using the Current Population Survey (CPS), the source of official poverty and inequality statistics. We link administrative data for food stamps, TANF, General Assistance, and subsidized housing from New York State to the CPS at the individual level. Program receipt in the CPS is missed for over one-third of housing assistance recipients, 40 percent of food stamp recipients and 60 percent of TANF and General Assistance recipients. Dollars of benefits are also undercounted for reporting recipients, particularly for TANF, General Assistance and housing assistance. We find that the survey data sharply understate the income of poor households. Underreporting in the survey data also greatly understates the effects of anti-poverty programs and changes our understanding of program targeting. Using the combined data rather than survey data alone, the poverty reducing effect of all programs together is nearly doubled while the effect of housing assistance is tripled. We also re-examine the coverage of the safety net, specifically the share of people without work or program receipt. Using the administrative measures of program receipt rather than the survey ones often reduces the share of single mothers falling through the safety net by one-half or more.
Keywords: income measurement; poverty programs; administrative data; survey data; transfer programs
JEL Codes: C42; C81; I32; I38
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| survey errors (misreporting) (C83) | understatement of income for poor households (H31) |
| understatement of income for poor households (H31) | makes poverty appear more severe (I32) |
| data accuracy (Y10) | poverty measurement (I32) |
| housing assistance (using administrative data) (H53) | poverty-reducing effect (I32) |
| underreporting of transfer income (H24) | distorted view of program effectiveness (H43) |
| share of single mothers falling through the safety net (using administrative measures) (J12) | reduced by half (Y60) |
| underreporting of transfer income (H24) | makes government anti-poverty policies appear less effective (H53) |