Causes of Poverty

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CAUSES OF POVERTY:
Findings from Recent Research
By Amy Rynell

The Heartland Alliance
Mid-America Institute on Poverty

October 2008

Acknowledgements
Funder
This report was supported by a grant from the Chicago Community Trust. Editorial Support
Jim Lewis, Chicago Community Trust
Amy Terpstra, The Heartland Alliance Mid-America Institute on Poverty Research Team
The Heartland Alliance Mid-America Institute on Poverty provides dynamic research and analysis on today’s most pressing social issues and solutions to inform and equip those working toward a just global society. For more information call 773.336.6075, email maip@heartlandalliance.org, or visit www.heartlandalliance.org/maip/. This report as well as other publications on poverty are available for download from www.heartlandalliance.org/maip/.

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Table of Contents
1. Background on Methods

3

2. Poverty Overview: Scale and Dynamics in the United States

4

3. What is the Relationship of Macroeconomic Performance to Poverty?

6

4. What Aspects of Employment Trigger Entry into Poverty?

8

5. How Does Human Capital Development Impact Employment and Poverty Chances?

10

6. What Household Composition Factors Increase the Likelihood that a Family will Enter Poverty?

12

7. How Are Disability and Poor Health Linked to Poverty?

14

8. How Does the Rise in Men with Criminal Records Decrease Economic Chances for Themselves and Their Families?

16

9. Does Being an Immigrant Impact the Likelihood of Being Poor?

18

10. Does Having Experienced Violence Increase the Risk of Economic Insecurity for Women?

21

11. What are the Economic Consequences of Living in Disproportionately Poor Neighborhoods?

24

12. Summary of Findings

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13. References

29

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1. Background on Methods
Over the past 25 years significant structural changes have occurred in the United States that have influenced poverty, making current-day poverty different in some ways from poverty just a few decades ago. These structural changes include transformations in our economic structure such as the shift from manufacturing employment to service-sector employment; the deinstitutionalization of people with mental illnesses into community settings; welfare reform, which resulted in a an emphasis on work over welfare; changes in immigration patterns; and skyrocketing rates of incarceration. Given these considerable changes, the vast majority of the literature referenced in this summary is from the mid-1990s through 2007 to capture what has been learned about poverty within this new context. Studies prior to this time period are referenced when they are the most recent available and/or are landmark studies that are still applicable to the issue being addressed.

The majority of the literature referenced here on each specific poverty-related issue is primary research that used rigorous econometric or statistical methods and robust nationally representative data sets. Included are studies and findings that surface throughout high quality literature reviews on the specified issues. Most have been published in journals or at poverty institutes affiliated with universities. The assessment of the methods of analysis used in the referenced research was rooted in peer reviews, frequency of citations, and perceived quality; for the purposes of this summary the methods were not re-analyzed or tested. Though there is a large body of international research on issues related to poverty, the research addressed here is almost exclusively focused on findings within the context of the United States. What follows is an analysis of these characteristic causes of poverty as well as research on issues that impact income, earnings, and poverty, some of which can be considered proximate determinants of poverty. These issues include characteristics and life experiences that put people at risk of not working or not working enough to prevent entry into...
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