Transiting to Work: The Role of Private Transportation for Low-Income Households

This study examines the role of reliable vehicles in facilitating employment, using a new data set, the Iowa Transportation and Employment Survey. The empirical results document significantly higher levels of transportation problems and human capital barriers among low-income households compared to other households and among low-income nonworking adults compared to their employed counterparts. The multivariate analysis of low-income households shows that employment and reliable transportation are related. Respondents without access to a reliable vehicle are less likely to be employed; those employed are more likely to have access to a reliable vehicle. Residence in an area adjacent to a metropolitan area has a positive effect on working. ********** The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) launched a major social experiment involving the nation's poor. PRWORA targeted families with children by replacing the Aid to Families with Dependent Children entitlement program with the Temporary Assistance to Needy Families (TANF) program, but the legislation "works toward a broader focus. As the emphasis on leaving welfare continues, and as more families attempt to gain self-sufficiency without welfare, attention tends to shift to those families off welfare who are still having difficulties and need assistance" (Moffitt and Ver Ploeg 2001, 37). Most studies in the postreform period have investigated the TANF population. Policy discussions, however, are now shifting toward the more general population of needy individuals and families, and the possible supports that they may require to help them access public assistance programs, move from welfare to work, or progress from poverty to higher-wage jobs (Blumenberg and Waller 2003; Grassley 2003). Transportation is a critical issue facing low-income persons making these transitions and often is overlooked by policy makers. The purpose of this paper is to examine the transportation-related barriers to employment faced by low-income households compared to other households and to investigate how these barriers among low-income households influence employment. The analysis uses a unique data set on a sample of Iowa households to answer the following questions: (1) What resources are available to households to meet their transportation needs, and do the resources vary by income? (2) Does the availability of private transportation predict employment outcomes for low-income households? In the next section of the paper, we review literature on low-income workers and transportation issues among low-income populations. The Data, Sample Design, and Methods section of the paper describes the data set, the sample design, and our conceptual and analytical approach. Analytic results are presented in the Results section. The paper concludes with a discussion of implications for the effective design of programs and policies to assist low-income consumers in better addressing transportation barriers to employment and achieving desired social and economic outcomes. LITERATURE REVIEW Research examining the low-income labor market has ranged from studies that look at low-wage workers--using absolute (Bernstein and Hartmann 2000; Carnevale and Rose 2001; Holzer et al. 2001; Mishel, Bernstein, and Schmitt 2001; Mitnik, Zeidenberg, and Dresser 2002; Ryscavage 1996; Schochet and Rangarajan 2004; Smith and Vavrichek 1992) or relative (Gladden and Taber 2000; Long and Martini 1990) measures of a low wage--to studies that defined low-income workers, using some multiple of the poverty threshold as a cutoff value against which the total annual income of the person's family was compared (Acs, Ross, and McKenzie 2001; Gardner and Herz 1992; Hale 1997; Klein and Roens 1989). For example, Schochet and Rangarajan used an absolute wage measure--the hourly wage at which a full-time worker would have annual earnings below poverty for a family of four. …