- Mark Levitan and Daniel Scheer
- January 2012
- Link to dp139812 (PDF)
The official poverty measure, which relies solely on pre-tax cash income, provides a limited view of the impact of government policy on the poverty rate. By taking taxation and in-kind benefits such as Food Stamps into account, poverty measures based on the National Academy of Science’s recommendations are suited to capture the effect of a wider range of anti-poverty policies. Over the past several years, the New York City Center for Economic Opportunity (CEO) has developed such a measure for New York City. This study utilizes CEO’s approach to assess the impact of Food Stamps on the New York City poverty rate from 2007û2009. We find that the Food Stamp program plays an important role in anti-poverty policy for the City as a whole, as well as for specific sub-groups. Because benefits are not conditioned on employment, Food Stamps offset some of the income loss associated with the economic downturn. We also develop counterfactual scenarios in order to identify the role of efforts to expand the program’s participation rate in 2008 and 2009, and the increase in benefit levels in 2009. We find that these additional efforts had relatively small and statistically insignificant effects on the City poverty rate. We conclude that policymakers should focus on maintaining the program’s relative flexibility, bolstering its level of benefits and continuing work to increase the participation rate among eligible individuals.