Work Hours Instability and Child Poverty: Response of the Safety-Net Programs

This paper uses data from the Survey of Income and Program Participation to investigate how intra-year caregiver work-hours volatility is related to child poverty, measured through both the official poverty measure (OPM) and the supplemental poverty measure (SPM). I further assess varying degrees of buffering effects of cash benefits, in-kind benefits, and tax transfers on income in the context of work-hours volatility. Results indicate that Black and Hispanic children, as well as those living with unpartnered single mothers, faced substantially higher variability in household market hours worked. Hispanic children experienced not only greater volatility in their caregivers’ work hours, but also higher poverty levels, even after taking government programs into account. I find that a 10 percent increase in intra-year hours volatility is linked to roughly a 2 percent and 1.6 percent increase in OPM and SPM child poverty, respectively. In-kind benefits are more effective in buffering household income declines resulting from unstable caregiver work hours, followed by tax transfers and cash benefits, which each offer somewhat less of a buffering effect. The effectiveness of near-cash benefits is particularly salient among Black children and children of unpartnered single mothers. Hispanic children also benefited from these transfers’ compensating effects, but to a lesser degree. These results provide new evidence to inform public policy discussions surrounding the best ways to help socioeconomically disadvantaged families to retain benefits and smooth their income in the face of frequent variation in work hours and, thus, earnings.