Working Paper: NBER ID: w26966
Authors: Jeff Larrimore; Jacob Mortenson; David Splinter
Abstract: This paper presents new estimates of the level and persistence of poverty among U.S. households since the Great Recession. We build annual household data files using U.S. income tax filings between 2007 and 2018. These data allow us to track individuals over time and measure how tax policies affect poverty trends. Using an after-tax household income measure, we estimate that while roughly 1 in 10 people are in poverty in any given year, over 4 in 10 people spent at least one year in poverty between 2007 and 2018. This implies substantial mobility in and out of poverty—for example, 41 percent of those in poverty in 2007 were out of poverty in the following year. Others spend multiple years in poverty or escape poverty only to fall back into it. Of those in poverty in 2007, one-third were in poverty for at least half of the years through 2018.
Keywords: Poverty; Tax Data; Income Dynamics; Persistence of Poverty
JEL Codes: D31; H20; I32
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| tax policies (H29) | poverty trends (I32) |
| poverty trends (I32) | poverty levels (I32) |
| tax policies (H29) | poverty levels (I32) |
| poverty levels (I32) | poverty persistence (I32) |
| tax policies (H29) | poverty persistence (I32) |