The Chronicity of Poverty: Evidence from the PSID, 1968–1987

An essential resultfrom the poverty research of the 1970s was an indication that much poverty was episodic, in contrast to then-conventional stereotypes about the poor. Houwever, recent treatments of poverty in the U.S. have emphasized the increase of chronic poverty. This study tests the hypothesis of increasing intragenerational chronicity by using a series of multiyear windows that track income experiences of households from the Panel Study of Income Dynamics (PSID) from 1968 to 1987. Results show an increase in the incidence of chronic poverty after 1973, with an acceleration in the early 1980s. Thereafter, as the annual poverty rate begins to decline, chronicity levels off at rates consistent with the heightened chronicity observed during the late 1970s. As expected, the trends are sharper among blacks and women than among whites and men, and are sharpest of all among blackfemale-headed households. More than a quarter of a century ago, Lyndon Johnson declared a national War on Poverty. Considerable progress was made in the 1960s, especially in reducing poverty among the elderly, but in the two decades since, the situation has worsened. In 1987, the poverty rate was as high as it was in 1968, and in general, the poverty rate has been higher throughout the 1980s than in the previous decade (U.S. Bureau of the Census 1988). Since the early 1970s, offsetting demographic and market-based structural forces have countered posttransfer payment tendencies toward the reduction of poverty by introducing new and expanded modes of inequality. Consequently, a number of researchers and commentators have observed that contemporary American society is characterized by an even greater degree of income inequality and polarization than has existed at any time since World War II (e.g., Haveman 1988a, 1988b; Mishel & Simon 1988). * We wish to thank Charlie Brody and two anonymous reviewersfor their comments on earlier drafts ofthis manuscript. Direct all correspondence to oelA. Devine, Department of Sociology, Newcomb Hall 220, Tulane University, New Orleans, LA 70118. ?i The University of North Carolina Press Social Forces, March 1992, 70(3):787-812 This content downloaded from 157.55.39.215 on Tue, 30 Aug 2016 06:04:42 UTC All use subject to http://about.jstor.org/terms 788 / Social Forces 70:3, March 1992 More troubling, there is a mounting body of evidence to suggest that many U.S. cities have experienced profound negative tansformations over the past two decades, with the inner city urban core frequently becoming a squalid locus of entrenched poverty, social disorganization, deviance, and welfare dependency -a qualitatively different form of poverty than that experienced in the past (see, e.g., Ellwood 1988; Harrington 1984; Murray 1984; Wilson 1987). What seems different about this "new American poverty" is its apparent destructiveness, intractability, and perhaps hopelessness. This is the so-called "underclass" problem about which so much has recently been written. Though often descriptively rich, the emerging literature on the underclass is plagued by competing and often irreconcilable conceptions of the phenomenon, its manifestations, determinants, context, and consequences. A review of the literature causes one to wonder whether the underclass should be considered as an economic, social, psychological, and ecological construct, or merely an ideological one or perhaps as the intersection of all these (Danziger 1989). Perhaps there is no single underclass, but several partially overlapping underclasses Uencks 1989). Does the underclass consist of positions, people, values, or behaviors? On close inspection the very meaning of the term seems to disappear into an ambiguous mist of causes, symptoms, social and demographic correlates, and behavioral manifestations. Thus, there is little agreement as to who or what the underclass even is, much less whether it is growing. The many definitional ambiguities notwithstanding, nearly all commentators agree that the poverty of the underclass is chronic poverty, poverty that persists across time, not episodic poverty of the sort that results from short-term fluctuations in household composition or finances. The fact that much poverty is episodic is one of the key findings from the research on poverty conducted in the 1970s (e.g., Duncan et al. 1984), and while this no doubt remains true, there is nonetheless reason to believe that the rate of chronic poverty may be increasing and that this increase lies at the very core of the underclass problem. Unfortunately, while the notion of chronic or persistent poverty transcends and thus unites otherwise disparate claims about contemporary poverty and the underclass, the concept of chronicity itself is not without ambiguity. This concept is clearly intended to separate the experience of the long-term poor from the more commonplace episodic forms of impoverishment that result from temporary economic dislocation, family dissolution, and similar problems; but no single standard or temporal benchmark of chronicity exists. How many years in a row must a family be poor before it can be considered chronically poor? A related ambiguity, not considered in depth in this article, is whether the notion of chronicity also implies an inter-generational component; here, we simply assume that it does not. Although various researchers and commentators have employed different conceptions and definitions of the chronicity of poverty, there is widespread agreement that during the post-War-on-Poverty period, chronicity has increased. Upon examination, however, this thesis of increasing chronicity often rests upon indirect, extremely limited, or often dated empirical evidence. More often than not, researchers infer increased chronicity from (1) the allegedly more intractable nature of poverty over the past 15 or more years as evidenced by the This content downloaded from 157.55.39.215 on Tue, 30 Aug 2016 06:04:42 UTC All use subject to http://about.jstor.org/terms The Chronicity of Poverty / 789 tendency for the post-1973 incidence of poverty to remain high, especially among minorities (e.g., Glasgow 1980; Haveman 1988a);1 (2) the now welldocumented trend toward an increasingly skewed distribution of income during the 1980s (Levy 1988; Mishel & Simon 1988; U.S. Bureau of the Census 1988); or (3) the equally well-documented fact that a relatively large number of the census tracts in nearly all the nation's large urban centers experienced an increasingly concentrated poverty population between 1970 and 1980 (Danziger & Gottschalk 1987; Ricketts & Mincy 1988; Ricketts & Sawhill 1986). Despite the consistency of these claims, there is little direct evidence on the chronicity of poverty or on its apparent increase. While Duncan (1984) and his associates' seminal work on the persistence of poverty clearly established the fact of chronicity in a way that Hunter (1904), Harrington (1962, 1984), Liebow (1967), Caudill's (1963) treatment of Appalachia, and others previously could not, it is also true that this much-cited work dealt with the 1968-1978 period.2 As such, this particular research does not bear directly on the widespread notion of increasing chronicity in the late 1970s and 1980s. Here, we expand the period of analysis and examine the empirical efficacy of the increasing chronicity hypothesis using data from the Panel Study of Income Dynamics (PSID, 1968-1987, waves I-XX, cross-year merged familyindividual file). Specifically, we operationalize several alternative quantitative definitions of intragenerational chronicity of poverty by creating a series of rolling multiyear windows to track PSID households' income experiences over the 1968-1987 period.3 Thus, we assess the patterns of chronic poverty across time and ascertain whether the incidence of chronicity has or has not increased during the period under study. We also assess the 19-year record of chronic poverty among demographic subgroups.