Wednesday, January 25, 2012

Who Receives Government Assistance?

Copyright, The New York Times Company

Thanks to the recession, and changes in program rules, a large fraction of households receive government assistance, especially those headed by people without a four-year college degree.

The three largest government safety net programs serving nonelderly households are Medicaid, unemployment insurance and the Supplemental Nutrition Assistance Program (SNAP). Together they paid out more than $600 billion in benefits during 2010 on behalf of program participants.

A large number of households received these benefits. Using the results of the Census Bureau’s annual demographic survey, I classified nonelderly households by the educational attainment of the household head (I omitted the small number of households headed by people younger than age 25, because their educations might still be in progress), and calculated the fraction of them that received Medicaid, unemployment insurance and/or SNAP sometime during the years 2007 and 2010.

Source: Census Bureau

A few households headed by people with a four-year college degree or more received at least one of these three forms of government assistance, but their recipiency rates were much less than the rates among less educated households. Less than 10 percent of households headed by someone with a doctorate or professional degree (like an M.D. or law degree) received government assistance.

Over a third of households with heads whose formal education was limited to a high school diploma — the most common type of household — received at least one of these types of assistance in 2010. A majority of households with heads who stopped their schooling before graduating from high school received government assistance in 2010.

All of the groups saw the likelihood of government assistance increase between 2007 and 2010. Some of this increase, especially with the Medicaid program, can be attributed to the recession because Medicaid eligibility rules hardly changed during that time. At the same time, a number of people, especially in the less educated categories, saw their incomes fall below the poverty line, which makes Medicaid eligibility much more likely.

But changes in the rules for taking part in unemployment insurance and SNAP changed significantly during this time, and explain a large part of the changes between 2007 and 2010 shown in the chart.

We can hope that an economic expansion will take incomes back to where they were before the recession began, and beyond. But government assistance will not return to prerecession levels until participation rules do, and that return depends on political factors as much as economic ones.


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