October 17, 2008

The Heartland Alliance Mid-America Institute on Poverty released a study entitled Causes of Poverty: Findings from Recent Research. This deeper look at causes of poverty provides a solid jumping off point for policy and systems planning. By understanding the specific triggers that increase the likelihood that someone will experience poverty, we can better target our interventions and investments. Some highlights from the study are outlined below.

What events are more likely to push people into poverty?

• Loss of a job: nearly 20% of people enter poverty when the head of household loses a job.
• Decline in earnings: half of poverty spells begin with the household experiences a decline in earnings.
• No high school degree: households headed by someone without a high school degree have a high likelihood of entering poverty.
• Female-headed household: When a two-adult household becomes a female-headed household 20.1% entered poverty.
• Having children: 8.6% of poverty entries happen when a child is born into a household.
• Disability: when a head of household becomes disabled, 6.5% of households enter poverty.

What contributes to these events happening?

Forces largely seen as outside of the control of individuals have dramatic impacts on income, earnings, and poverty. Recessions, high unemployment, the decline in the manufacturing sector and growth in the service sector, and declining unionization depress earnings and increase poverty, particularly for disadvantaged workers. A healthy economy alone, while integral to preventing poverty, does not prevent all entries into poverty.

Many people at risk of poverty have circumstances that prevent them from entering the labor market or that limits their wages or the hours they work, including: the growth in low-wage work, discrimination, wage declines for dropouts, teen births, not having full time work, increased incarceration, having experienced violence, and living in high poverty neighborhoods. 

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