Multiple 'Shocks' Reinforce Persistent Poverty, Hardship, Study Finds

Frequent household "shocks" such as loss of income, health, or property both contribute to and are exacerbated by persistent hardship, a report from the Robin Hood/Columbia University Poverty Tracker finds.

Based on surveys of the same twenty-three hundred New York City residents conducted over three years, the report, The Persistence of Disadvantage in New York City (18 pages, PDF), found that between 2012 and 2014, 73 percent of respondents experienced poverty (income below the Supplemental Poverty Measure), severe material hardship, and/or poor health, while 37 percent suffered at least one of those disadvantages in all three years. According to the study, 47 percent experienced income poverty at least once, while 5 percent did so consistently throughout the three-year period; 54 percent suffered severe material hardship at least once, 18 percent consistently; and 34 percent reported poor health or a health condition that limited their ability to work, 14 percent consistently. Latinos (61 percent), African Americans (57 percent), immigrants (56 percent), young adults (58 percent), and those with less than a high school education (76 percent) were more likely than others to experience poverty at least once.

The fourth in a series produced by the Columbia University Population Research Center in partnership with the Robin Hood Foundation, the study also found a correlation between the frequency of "shocks" from ­­­financial loss, relationship dissolution, crime victimization or loss of property, injury or illness, or police stops or arrests and the persistence of income poverty, material hardship, and poor health. For example, 67 percent of those who were consistently poor, 86 percent of those who suffered persistent hardship, and 67 percent of those in chronic poor health during the three-year period also suffered multiple financial shocks. The analysis found that exposure to multiple shocks increases the likelihood of subsequent hardship, and greater hardship at any given point leads to a higher probability of more shocks later. But while poor health was likely to lead to negative shocks later, multiple shocks were not found to lead to poor health.

"These new results suggest that the most persistently disadvantaged New Yorkers are the same New Yorkers beset by repeated shocks to their finances and well-being," said Michael Weinstein, chief program officer at the Robin Hood Foundation. "The question we'll now tackle is to what extent multiple shocks — like divorce or eviction — trigger hardship versus hardships triggering shocks."

"Robin Hood's Panel Study Documents Pervasive Deprivation and Opens Inquiry About the Role of 'Shocks'." Robin Hood Foundation Press Release 10/17/2016. "The Persistence of Disadvantage in New York City." Robin Hood/Columbia University Poverty Tracker Report 10/17/2016.