Richard V. Burkhauser

Policy research institutes in the United States play an important role in the creation of evidence for evidence‐based policymaking. This is the case with respect to their advocacy for the gathering and broad dissemination of “Big Data” and in the publication of policy analysis in the academic literature using these data. But they play a much more significant role, via non‐refereed working papers, in predicting the possible behavioral and distributional consequences of currently proposed policies being considered by the executive and legislative branches of government. Historically, however, policy research institutes, both inside and outside the Beltway, have also played a less understood role. This role is the nurturing of those mostly academic‐based economists who, as members of the Council of Economic Advisers, eventually end up advising presidents of the United States and their staff on the state of economic knowledge regarding the economic problems these policymakers are called to solve via evidence‐based policymaking.

Although industrialized countries have long provided public protection to working-age people with disabilities, their specific policies and programs have evolved over time. The impetus for change has been multifaceted: rapid growth in program costs, greater awareness that people with impairments are able and willing to work, and increased recognition that protecting the economic security of people with disabilities might best be done by maintaining their connections with the labor market. This chapter describes the evolution of the Social Security Disability Insurance (SSDI) program in the United States and the importance that policy has played in its rapid growth. Based on the shared experiences of the Netherlands, Sweden, Great Britain, Germany, and Australia, this chapter outlines lessons for US policymakers as they consider reforms to more effectively control SSDI growth.

We evaluate progress in President's Johnson's War on Poverty. We do so relative to the scientifically arbitrary but policy relevant 20 percent baseline poverty rate he established for 1963. No existing poverty measure fully captures poverty reductions based on the standard that President Johnson set. To fill this gap, we develop a Full-income Poverty Measure with thresholds set to match the 1963 Official Poverty Rate. We include cash income, taxes, and major in-kind transfers and update poverty thresholds for inflation annually. While the Official Poverty Rate fell from 19.5 percent in 1963 to 12.3 percent in 2017, our Full-income Poverty Rate based on President Johnson's standards fell from 19.5 percent to 2.3 percent over that period. Today, almost all Americans have income above the inflation-adjusted thresholds established in the 1960s. Although expectations for minimum living standards evolve, this suggests substantial progress combatting absolute poverty since the War on Poverty began.

This chapter shows that cross-sectional and longitudinal comparisons of the economic well-being and income distribution of persons living in older households or in younger social assistance households in the 1980s yield dramatically different outcomes. It describes the cross-sectional data to compare the economic wellbeing and income distribution of groups in the population in 1979 with similarly defined groups in 1989, the two peak years of the 1980s business cycle. The chapter discusses the longitudinal data to identify members of these same groups in 1979 and follow them through 1989. The longitudinal sample is comprised of only those individuals who are in both the 1980 and 1990 waves of the Panel Study of Income Dynamics (PSID). In the longitudinal case, the sampling weights from 1989 are used in all estimations. For the longitudinal analysis using the PSID, a person's population subgroup assignment is defined by the household characteristic of the household in which the person lived in 1979.

This is the first study to examine the effect of increases in the tipped minimum cash wage—the wage employers must pay to tipped employees—on poverty. Using March Current Population Survey data (1988–2014), we find that tipped minimum cash wage increases are associated with declines in the risk of a tipped restaurant worker living in a poor family (elasticities around –0.2). However, we find little evidence of poverty‐alleviating effects when using the household rather than the family as the sharing unit. This result is consistent with evidence that a substantial share of tipped workers who live in a poor family live in a nonpoor household with persons unrelated by blood, marriage, or adoption who contribute to the household's income. Furthermore, we find that tipped minimum cash wage hikes are associated with increases in the risk of a younger, less‐educated individual living in a poor family or household. Adverse labor demand effects that redistribute income among low‐skilled individuals drive these results. We conclude that raising the tipped minimum cash wage is a poorly targeted policy to deliver income to poor restaurant workers.

In sharp contrast to single women with children, the employment rates of men and women stunningly declined over the 1990s business cycle after rising over the 1980s business cycle. United States policy-makers were successful in increasing the willingness of single mothers with children to seek employment by consistently shifting programme incentives to favour earnings from work over welfare benefits from not working. Although the relative importance of the improved economy versus changes in public policy remains uncertain, the combination of programmes aimed at increasing labour force participation of single mothers via carrots and as sticks had an important impact on the real outcomes. The consequences of the mixed signals of social policy are evident in the programme participation and employment rates of working-age people with disabilities over the 1990s. Historically, the federal government's approach to providing economic security for people with disabilities has been dominated by a caretaker approach, reflecting the outdated view that disability is solely a medical issue.

Survey under‐coverage of top incomes leads to bias in survey‐based estimates of overall income inequality. Using income tax record data in combination with survey data is a potential approach to address the problem; we consider here the UK's pioneering ‘SPI adjustment’ method that implements this idea. Since 1992, the principal income distribution series (reported annually inHouseholds Below Average Income) has been based on household survey data in which the incomes of a small number of ‘very rich’ individuals are adjusted using information from ‘very rich’ individuals in personal income tax return data. We explain what the procedure involves, reveal the extent to which it addresses survey under‐coverage of top incomes and show how it affects estimates of overall income inequality. More generally, we assess whether the SPI adjustment is fit for purpose and consider whether variants of it could be employed by other countries.