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Trickling Down the Rising Tide: New Estimates of the Link between Poverty and the Macroeconomy

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  • Donald G. Freeman

Abstract

This paper uses pooled time‐series regressions of regional data to reexamine the link between poverty and the macroeconomy. The use of disaggregated data provides additional degrees of freedom and permits the inclusion of controls for demographic changes and increased income inequality. The results indicate a stronger relationship between poverty rates and the macroeconomy in the 1980s than that found in prior research and confirm that the dramatic reduction in unemployment during the late 1990s was instrumental in reducing poverty rates. The estimated results for the 1990s imply a 0.4‐0.9% increase in the poverty rate for each 1% increase in the unemployment rate.

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  • Donald G. Freeman, 2003. "Trickling Down the Rising Tide: New Estimates of the Link between Poverty and the Macroeconomy," Southern Economic Journal, John Wiley & Sons, vol. 70(2), pages 359-373, October.
    • Handle: RePEc:wly:soecon:v:70:y:2003:i:2:p:359-373
    DOI: 10.1002/j.2325-8012.2003.tb00575.x
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    1. Maria J. Hanratty & Rebecca M. Blank, 1992. "Down and Out in North America: Recent Trends in Poverty Rates in the United States and Canada," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(1), pages 233-254.
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    3. Donald G. Freeman, 2003. "Poverty and the Macroeconomy: Estimates from U.S. Regional Data," Contemporary Economic Policy, Western Economic Association International, vol. 21(3), pages 358-371, July.
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