via Vox, by Dylan Matthews, October 27, 2015

A new study suggests that programs like food stamps and housing vouchers cut poverty by almost twice as much as we thought they did.

According to standard census numbers, the poverty rate in New York from 2008 to 2011 was 13.6 percent, before taking these programs into account. The programs the study examines — food stamps (a.k.a. SNAP), welfare (a.k.a. TANF), state-level general assistance programs, and housing aid — dropped that down to 10.8 percent. But the study suggests the real number was even lower: a mere 8.3 percent. If that’s true, then the estimated poverty-fighting power of these programs has been dramatically understated for years.

People really don’t like telling the census they get government help

The official data on poverty comes from the Current Population Survey’s (CPS) Annual Social and Economic Supplement (ASEC), a yearly survey that reaches about 100,000 addresses and yields detailed information on household incomes, education levels, health insurance, and use of government assistance programs. In theory, it should tell us everything we need to know. But all surveys come with a risk of error, and ASEC, in particular, has beengetting worse in recent years. Fewer people in the sample fill it out, and fewer people who fill out some of it fill out the income portion. This means it misses a lot of money people are receiving from the government. “The underreporting of income from government programs is a problem that is well-known in the CPS, and which has grown over time,” Christopher Wimer, a poverty researcher at Columbia and lead author of a landmark 2013 paper on the war on poverty, writes in an email.

Luckily, there’s another source of data on how much money households are getting from the government: the government itself. So University of Chicago economist Bruce Meyer, who has produced a lot of the research identifying this problem, and CERGE-EI’s Nikolas Mittag got microdata from the New York State Office of Temporary and Disability Assistance and the federal Department of Housing and Urban Development to see how much various households in New York state were getting from food stamps, welfare, and housing assistance. They then matched that data with the ASEC survey data, so they could compare what respondents said they were getting in government assistance with what they were actually getting.

They found that more than a third of people getting housing assistance, 40 percent of people getting food stamps, and 60 percent of people getting TANF or state-based General Assistance didn’t say so when surveyed for ASEC. And even people who said they got assistance underestimated how much they were getting, by 6 percent for food stamps, 40 percent for TANF/General Assistance, and 74 percent for housing assistance. In other words: Our survey data on how many people are using these programs, and how much they’re getting, is really, really wrong.
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