1 U.S. Census Bureau, Current Population Survey, 2014 Annual Social and Economic Supplement, Table POV13 “Related Children by
Number of Working Family Members and Family Structure”, http://www.census.gov/hhes/www/cpstables/032014/pov/pov13_100_1.xls.
2 Center on Budget and Policy Priorities. October 17, 2014. “New Poverty Figures Show Impact of Working-Family Tax Credits,” http://www.offthechartsblog.org/new-poverty-figures-show-impact-of-working-family-tax-credits/.
3 Fischer, Will and Barbara Sard. 2013. “Chart Book: Federal Housing Spending is Poorly Matched to Need.” Washington, DC: Center for Budget and Policy Priorities.
4 Center on Budget and Policy Priorities, October 17, 2014, op. cit.
5 Center for Budget and Policy Priorities. 2014. “Policy Basics: The Earned Income Tax Credit.” Washington DC, http://www.cbpp.org/cms/?fa=view&id=2505.
6 The Urban Institute assumed a roughly $1,000 increase in the maximum credit would encourage enough single family heads to begin to work to lead to a 3.6 percentage point increase in the employment to population ratio for single family heads, following the empirical results from Grogger, Jeffrey. 2003. “The Effects of Time Limits, the EITC, and Other Policy Changes on Welfare Use, Work, and Income among Female-Headed Families.” The Review of Economics and Statistics 85(2): 394-408. Individuals simulated to take new jobs were assigned full-year jobs at the minimum wage, with work hours based on the characteristics of jobs held by workers in SPM poverty in the 2010 baseline
7 Technically this is based on tax units, however, tax units are similar enough to families that we use the term families throughout the report when discussing the impact of tax policy changes.
8 A large share of the shortfall is attributable to the fact that TRIM3 does not model noncompliance with EITC rules. The Department of Treasury estimates that $15.3–$18.4 billion in EITC payments were issued improperly in 2010, representing a large share of the $22.3 billion TRIM3 shortfall. Other possible explanations are that the model does not allocate children within complex households so as to maximize tax benefits and does not capture the fact that some survey-reported earnings are non-taxable (thereby lowering earnings sufficiently for a tax unit to be eligible for the EITC).
9 Cost estimates in this report are net costs (or revenues) to the federal and state governments based on changes in SSI, TANF, SNAP, UI, public/subsidized housing, LIHEAP, WIC, CCDF benefits paid to recipient and changes in tax liabilities and credits. The majority of costs are federal; however, state costs for UI, SSI, TANF, and CCDF are also included, as well as state tax liabilities and credits. Costs do not include any administrative costs and are in 2010 dollars.
10 U.S. Census Bureau, op. cit.
11 Cooper, David. Oct 2014. “Raising the Federal Minimum Wage to $10.10 Would Save Safety Net Programs Billions and Help Ensure Businesses Are Doing Their Fair Share.” Washington, DC: Economic Policy Institute Issue Brief #387. http://www.epi.org/publication/safety-net-savings-from-raising-minimum-wage/.
13 Congressional Budget Office. 2014. “The Effects of a Minimum-Wage Increase on Employment and Family Income.” Washington, DC: Congressional Budget Office.
14 Workers with wages as low as one dollar below the old minimum ($6.25) and as high as one dollar above the new minimum ($10.30) were assumed to receive proportional wage adjustments, with those closest to $7.25 and $9.30 receiving the largest adjustments.
15 The probability of a worker losing her or his job was estimated to be six percent of the change in wages.
16 This ensures that the earnings of a full-time, year-round minimum-wage worker are at approximately the same percentage of poverty in the 2010-based analysis as would be the case if the $10.10/$7.07 minimum wage was implemented in 2014.
17 Among all workers (with and without children) 27.6 million would experience increases in earnings of $1,644 on average and 255,000 would lose their jobs.
18 In aggregate, 31 percent of new earnings would be offset by increased taxes and 3 percent by decreased benefits.
19 This estimate is based only on earnings, taxes and benefits changes for those who received a wage increase or lost their job as a result of the minimum wage increase. It does not include any cost/revenue changes resulting from secondary impacts of the minimum wage such as changes to business revenues that could impact corporate tax revenues.
20 LaDonna Pavetti. 2014 “Subsidized Jobs: Providing Paid Employment Opportunities When the Labor Market Fails.” Washington, DC: Center of Budget and Policy Priorities. http://www.pathtofullemployment.org/wp-content/uploads/2014/04/pavetti.pdf.
22 For simplicity, the analysis assumed that all participants renewed after the 4 weeks searching for employment although that is unlikely to be the case. This resulted in a total of 48 weeks of subsidized employment for the year for those selected to participate in the program.
23 This is higher than take-up rates seen for prior transitional and subsidized job programs, which ranged from seven to 15 percent. However, take-up rates in prior programs were constrained by limited funding. Further, given that the simulated program would be a national program that might be able to gain wide visibility, at take-up rate of 25 percent seems attainable.
24 Child Care Aware of America. 2014. “Parents and the High Cost of Child Care 2014 Report”, http://www.usa.childcareaware.org/costofcare.
25 Hannah Matthews and Schmit, Stephanie. February 2014. “Child Care Assistance Spending and Participation in 2012.” Washington DC: Center for Law and Social Policy.
26 Office of the Assistant Secretary of Planning and Evaluation. 2012. “ASPE Issue Brief: Estimates of Child Care Eligibility and Receipt for Fiscal Year 2009” Washington DC: Department of Health and Human Services.
27 A 10 percent decrease in the cost of child care was estimated to increase employment by 3 percent based on Blau, David. 2003. “Child Care Subsidy Programs.” In Means-Tested Transfer Programs in the United States, Robert A. Moffitt, ed. Chicago: University of Chicago Press. http://www.nber.org/chapters/ c10260; Ziliak, James, Charles Hokayem, and Bradley Hardy. 2008. “Child Care Subsidies and the Economic Well-Being of Recipient Families: A Survey and Implications for Kentucky.” University of Kentucky Center for Poverty Research. http://www.ukcpr.org/Publications/ChildCareSubsidies.pdf. Families who began work were assigned jobs at minimum wage with hours based on the characteristics of jobs held by workers in SPM poverty in the 2010 baseline data.
28 This could have led to an underestimate in the number of families who would actually avail themselves of a subsidy if it were available since some families currently using unpaid care might opt for paid care if a subsidy were available. To estimate the amount that families would pay for new subsidies (the family’s co-payment) and the total value of the subsidy, families were assigned a type of child care based on family characteristics and were assumed to find care at the maximum rate paid by their state. Costs could therefore have been overestimated.
29Urban Institute and Brookings Institution Tax Policy Center. “Quick Facts: Child and Dependent Care Tax Credit (CDCTC)”, http://www.taxpolicycenter.org/press/quickfacts_cdctc.cfm
31 A parent’s probability of taking a job was assumed to be 0.3 times the percentage reduction in the cost of child care. Since these are parents who are not currently working (and not currently using child care), the Urban Institute used imputation equations to estimate if they would pay for child care and if so, how much. They also assumed that there would be no increase in funding for CCDF subsidies to accompany the CDCTC increase, meaning no new families would receive child care subsidies.
32 United States Department of Agriculture, Food and Nutrition Service. 2014. “Characteristics of Supplemental Nutrition Assistance Program Households: Fiscal Year 2012.” Table 3.4. http://www.fns.usda.gov/sites/ default/files/2012Characteristics.pdf; and Children’s Defense Fund calculations based on Short, Kathleen. 2014. “The Supplemental Poverty Measure: 2013.” Washington, DC: U.S. Census Bureau, Current Population Reports. http://www.census.gov/content/dam/Census/library/publications/2014/demo/p60-251.pdf.
33 Center on Budget and Policy Priorities. “Policy Basics: Introduction to the Supplemental Nutrition Assistance Program (SNAP),” updated June 4, 2014, http://www.cbpp.org/cms/index.cfm?fa=view&id=2226; and Institute of Medicine. Jan 2013. “Supplemental Nutrition Assistance Program – Examing the Evidence to Define Benefit Adequacy;” and Hartline-Grafton, Heather and James Weill. 2012. “Replacing the Thrifty Food Plan in Order to Provide Adequate Allotments for SNAP Beneficiaries.” Washington, DC: Food Research and Action Center.
34 Coleman-Jensen, Alisha, Christian Gregory, and Anita Singh. Household Food Security in the United States in 2013, ERR-173, U.S. Department of Agriculture, Economic Research Service, September 2014, Table 8, http://www.ers.usda.gov/media/1565415/err173.pdf.
35 Because households that receive less than the maximum benefit received the same fixed dollar increase, the increase to average benefits was larger in percentage terms and equal to approximately 20 percent, according to the Center of Budget and Policy Priorities (Stacy Dean and Dottie Rosenbaum, Aug 2013, “SNAP Benefits Will Be Cut for Neatly All Participants in November 2013”, http://www.cbpp.org/cms/?fa=view&id=3899.)
36 The Urban Institute simulated the SNAP benefit increase by increasing the 2010 maximum allotments (including the ARRA increase) by the percentage by which the Low-Cost Food Plan exceeds the Thrifty Food Plan for a reference family type. This resulted in benefit levels that are somewhat higher than would be paid under the Low-Cost Food Plan without the ARRA boost but that reflect a 30 percent increase over the actual values in 2010.
37 Center on Budget and Policy Priorities, October 17, 2014, op. cit.
38 $16,333 - $3,000 = $3,333; 15 percent of $3,333 = $2,000.
39 Urban Institute and Brookings Institution Tax Policy Center. “Taxation and the Family: What is the child tax credit,” http://www.taxpolicycenter.org/briefing-book/key-elements/family/ctc.cfm.
40 National Center for Homeless Education. 2014. “Education for Homeless Children and Youth: Consolidated State Performance Report Data” http://center.serve.org/nche/downloads/data-comp-1011-1213.pdf.
41 United States Department of Housing and Urban Development. 2013. “Worst Case Housing Needs 2011: Report to Congress.” http://www.huduser.org/portal//Publications/pdf/HUD-506_WorstCase2011.pdf. Worst case housing needs are renters with incomes below half the local median receiving no housing assistance and either paying more than half of their income for rent and utilities or living in severely substandard housing or both.
42 Marci McCoy-Roth, Bonnie B. Mackintosh and David Murphey, Feb 2012, “When the Bough Breaks: The Effects of Homelessness on Young Children,” Child Trends, Early Childhood Highlights, Volume 3, Issue 1. http://www.childtrends.org/?publications=when-the-bough-breaks-the-effects-of-homelessness-on-young-children. National Center on Family Homelessness. 2011. “America’s Youngest Outcasts 2010.” http://www.homelesschildrenamerica.org/media/NCFH_AmericaOutcast2010_web.pdf.
43 Fischer, Will and Barbara Sard. 2013. Op. cit.
45 This differs in two ways from current housing voucher program policies. Under current policies, households are eligible if their income is less than or equal to half of the area median income (AMI). Since the AMI varies across the country, the income limit for the proposed expansion could be higher or lower than the regular program’s income limit depending on the area of the country. In addition, the analysis included a rent burden test, requiring that the fair market rent exceed 50 percent of families’ income, in order to target vouchers to families with the highest need. Most Public Housing Authorities do not use such a test.
46 Finkel, Meryl and Larry Buron. 2001. “Study on Section 8 Voucher Success Rates: Volume I Quantitative Study of Success Rates in Metropolitan Areas.” Washington, DC: U.S. Department of Housing and Urban Development, Office of Policy Development and Research.
47 National Conference of State Legislatures. “Child Support Homepage” http://www.ncsl.org/issues-research/human-services/child-support-homepage.aspx; Short, Kathleen S. 2013. “The Research Supplemental Poverty Measure: 2012.” Washington, DC: U.S. Census Bureau.
48 Huber, Erika, David Kassabian, and Elissa Cohen. Sept 2014. “Welfare Rules Databook: State TANF Policies as of July 2013.” OPRE Report 2014-52. Washington, DC: Office of Planning, Research and Evaluation, Administration for Children and Families, U.S. Department of Health and Human Services. http://www.acf.hhs.gov/programs/opre/resource/welfare-rules-databook-state-tanf-policies-as-of-july-2013, Table IV.A.2. “Treatment of Child Support Income for Recipients, July 2013.”
49 The geographic adjustments can have substantial impacts on the SPM thresholds. For example, the threshold for a four-person, two-child family that rents its home is $21,730 in Fort Wayne, Indiana and $30,925 in Los Angeles, California.
50 The maintenance of TRIM3 is funded by the Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation (HHS/ASPE). HHS/ASPE holds the copyright. TRIM3 requires users to input assumptions and/or interpretations about economic behavior and the rules governing federal programs. Therefore, the conclusions drawn from the simulations are attributable only to the authors of the report.
51 U.S. Census Bureau, Current Population Survey, 2014 and 2013 Annual Social and Economic Supplements, Table POV01.
52 The Making Work Pay Credit provided $400 to virtually all lower and middle-income employed individual taxpayers ($800 to couples). Removing this temporary credit increased the child SPM by 0.7 percentage points (from 13.9 to 14.6 percent).
53 Linda Giannarelli, Kye Lippold, Sarah Minton, and Laura Wheaton. Jan. 2015. “Reducing Child Poverty in the US: Costs and Impacts of Policies Proposed by the Children’s Defense Fund.” Washington, DC: Urban Institute.