Presence and Persistence of Poverty in U.S. Tax Data

42 Pages Posted: 13 Apr 2020 Last revised: 8 Mar 2023

See all articles by Jeff Larrimore

Jeff Larrimore

Board of Governors of the Federal Reserve System

Jacob Mortenson

Joint Committee on Taxation, US Congress

David Splinter

Joint Committee on Taxation

Date Written: April 2020

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.

Suggested Citation

Larrimore, Jeff and Mortenson, Jacob and Splinter, David, Presence and Persistence of Poverty in U.S. Tax Data (April 2020). NBER Working Paper No. w26966, Available at SSRN: https://ssrn.com/abstract=3574431

Jeff Larrimore (Contact Author)

Board of Governors of the Federal Reserve System ( email )

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Jacob Mortenson

Joint Committee on Taxation, US Congress ( email )

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David Splinter

Joint Committee on Taxation ( email )

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202-225-3621 (Phone)

HOME PAGE: http://wwww.davidsplinter.com

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