In this interview, Stone Center Affiliated Scholar Zachary Parolin discusses his new book, “Poverty in the Pandemic: Policy Lessons from Covid-19,” and assesses an array of policies that would improve economic well-being in the long term.

Zach Parolin and cover of his book Poverty in the Pandemic

Earlier this month the Census Bureau reported that the percentage of U.S. children who are living in poverty more than doubled in 2022, increasing from the record low of 5.2 percent in 2021 to 12.4 percent. The previous year’s low poverty rate was largely attributed to the expanded child tax credit, which Congress did not include in its 2022 spending bill.

The tremendous reduction in the child poverty rate, followed by the quick rebound to pre-pandemic levels, reflects one of the many ways that the pandemic gave researchers and policymakers new evidence on effective strategies for reducing poverty. In his new book, Poverty in the Pandemic: Policy Lessons from Covid-19, Stone Center Affiliated Scholar Zachary Parolin offers a new framework that presents three perspectives for understanding poverty during the Covid-19 pandemic, and assesses an array of policies that would improve economic well-being in the long term.

Parolin, who is an assistant professor at Bocconi University and a senior fellow at Columbia University’s Center on Poverty and Social Policy, will appear in a panel discussion at the Graduate Center on November 14 in an event cosponsored by the Stone Center. He discussed his new book in a recent interview.

What led you to write this book, and what do you hope readers will take away from it?

Parolin: I believe that the events of 2020 through 2022 have profound consequences for the ways we think about poverty — how we think about the consequences of poverty and the measurements of poverty, and also for policy strategies designed to reduce poverty. What I hope this book achieves, by explicating very specific policy solutions that are informed by evidence throughout the Covid-19 pandemic, is documenting which specific policy changes can improve well-being and reduce poverty well after the pandemic subsides.

The federal government unleashed a number of policy experiments in a short time during the pandemic. While of course we need to be careful in extrapolating lessons from a context as peculiar as the Covid-19 pandemic, I believe that there are lessons to be learned, and some lessons already have been learned, in what the country can do to, put simply, make life better for low-income families moving forward. For all of these reasons, I produced this book and I hope that’s what people take away from it.

The book presents a framework with three different perspectives on poverty. How did that framework help you to “reconcile the contradictions and the economic social and health outcomes of U.S. households during the pandemic”?

Parolin: Typically the way researchers like me think about poverty, we would try to quantify it through a point-in-time lens — this idea of “We can measure the poverty rate right now,” and that is our primary conceptualization of poverty. That perspective on poverty is useful, and it’s the backbone of empirical research in our field right now. But just looking at the poverty rate, or poverty as a point-in-time measure of resources, is incomplete in understanding poverty in a context like Covid-19. If I wrote a book that only focused on the massive poverty reduction that the federal government achieved in 2020 and 2021, people would rightfully be a little skeptical and concerned that there are some perspectives missing here.

Those perspectives, as I write about them in the book, are how poverty serves as a preexisting risk factor, and how poverty also serves as a stratifying feature — in addition to poverty as a measure of current resources — and they provide a more complete accounting for the consequences of poverty in a context like Covid-19. A brief example: the idea that poverty can act as a risk factor is really about how exposure to poverty throughout one’s life, even before the pandemic started, can increase the likelihood that a person faces a life disruption in the context of the pandemic. I talk about how early exposure to poverty is directly linked to a higher likelihood of Covid-related fatalities, a higher likelihood of job loss, and more.

As for poverty as a stratifying feature: it’s not always that exposure to poverty makes you more likely to face some of these life disruptions, but when a life disruption like school closures occurs, it is the lowest-income families that nonetheless struggle the most to cope with that likelihood. It’s not that being poor prior to that pandemic made you more likely to be in a school that turned to distance learning, but it affects how you can adapt and exacerbates the consequences of experiencing the life disruption. That’s why I talk primarily about school closures from this perspective, documenting the evidence that low-income families exposed to distance learning suffered the greatest learning loss as a result.

You propose a monthly measure for poverty. How is that better than the standard annual measure from the Census Bureau, and what are its limitations? Also, are you hoping that the monthly measure will become widely adopted in the U.S.?

Parolin: The standard annual measure of poverty that the Census Bureau offers is useful, but especially in the context of rapid economic change like we had in 2020 and 2021, it’s not useful enough to be able to inform real-time policymaking decisions. What I propose that we need, and what I introduced with colleagues from Columbia, is a measure of poverty that doesn’t capture income over the prior twelve months, but, number one, captures income in the prior month. Number two, it doesn’t produce just one poverty measure per year, but one poverty measure every single month. And number three, it can be released in close to real time, unlike the Census Bureau’s annual poverty estimates.

On September 12, 2023, for example, we finally had a poverty estimate from the Census Bureau for 2022. We’re about to release the monthly poverty rate for August 2023 in about a week, using our methods. We’re able to get a close-to-real-time accounting of monthly poverty in the U.S. and also of how government transfers can reduce poverty on a monthly basis. That’s the primary value added of the monthly poverty measure that I’ve introduced.

One example in the book: in April 2020, when the unemployment rate spiked to around 19 percent in the U.S., we knew back then with our monthly poverty measure that, before accounting for taxes and transfers, the monthly poverty rate was going up. But when you took into account the government stimulus checks and unemployment benefits, the monthly poverty rate was actually lower than it was before the start of the crisis. So we could see with our measure — a year and a half before the Census announced it — that poverty was actually declining, despite the massive labor market turmoil that the country was undergoing.

That’s why we introduced it. But there are limitations to it. First, let’s look at an example of more normal times: 2019. The monthly poverty measure’s value added is a little bit less relative to the annual measure simply because there’s less month-to-month volatility. That said, one fact our monthly measure shows is that even in normal times, families with children especially experience a lot of month-to-month volatility in poverty outcomes. We give a lot of our transfers in the U.S. through refundable tax credits, like the earned income tax credit and the child tax credit. Families with children receive about one third of their annual government income support at one time per year, after filing taxes, as a result of the way this is structured. Nonetheless, it’s certainly the case that the monthly poverty measure is a greater supplement to the annual poverty measure during times of greater volatility.

In terms of what I hope for the monthly poverty measure going forward — with my colleagues at Columbia, we are keeping it updated. And what’s wonderful is that the Census Bureau is actually working to institutionalize our monthly poverty measure and basically take it in-house. If all goes well, the Census Bureau will be producing this monthly poverty measure going forward. That’s one of the major research achievements of the recent work I’ve been a part of, I would say.

The book argues that the most appropriate lens through which to understand employment disparities during the pandemic is not demographic differences but pre-pandemic exposure to poverty. That seems very different from what we often saw in the media and in research. Why did you come to such a different conclusion?

Parolin: In broad terms, research and media attention related to job loss, especially in 2020, was focused on demographic-based differences. These are clearly important to study. It’s important to know if women more so than men are facing the brunt of the crisis, if mothers more than fathers, if Black individuals more so than white individuals. I don’t want to downplay the importance of these demographic-based differences.

But my argument is that this focus overlooks what was really the dominant dividing line in terms of who lost a job and who didn’t, and that is the economic situation that one carried into the start of the pandemic. First I show that if you started the pandemic in or near poverty, you were much, much more likely to lose your job in the first four months of the pandemic relative to someone well above the poverty line. In fact, the unemployment rate of those who entered the pandemic in poverty went above 30 percent by April 2020 — just massively high.

This focus on poverty does overlap some with those demographic differences. We know, for example, that Black individuals were more likely to enter the pandemic in poverty. And that helps to explain why, in part, why Black individuals were more likely to lose their jobs, on average, before white individuals. We can look specifically at mothers and fathers, and the lowest-income mothers are much more likely to lose their jobs in the pandemic than higher-income mothers.

This speaks to the long-lasting consequences of exposure to poverty throughout one’s life, and exposure to poverty that stems back to one’s own childhood. There are disadvantages that people carried with them into the start of the pandemic that magnified the challenges they faced during the pandemic. I think it’s important to recognize that, especially when we think about the importance of reducing poverty moving forward.

What are the most important policy lessons from the book?

Parolin: I think the most important set of policy lessons to take away from the pandemic is that when the government wants to and has the political will, it can make massive reductions in poverty and food hardship and massively increase economic well-being among families who otherwise would be going through tough times. One of these central policy lessons related to that is returning to the expanded child tax credit that we saw in 2021. That expanded child tax credit cut the monthly child poverty rate by around a third. It cut food hardship. It had the U.S. child poverty rate temporarily in line with Germany’s, instead of being twice as high as Germany’s, as it was before the pandemic. It increased families’ consumption at childcare centers and grocery stores. And it was massively successful, in the year that it was implemented, in making life better for low-income families with children.

When the Census Bureau announced its 2022 poverty estimates, we saw the flip side of this story. The child tax credit was gone in 2022, and to no one’s surprise, the child poverty rate went from a record low to back where it was before the pandemic began, which results in more than a doubling of child poverty from 2021 to 2022. There’s a lot more to talk about in the book about how to make this policy better, and about what other policies should be considered, but the expanded Child Tax Credit is a clear one — if we’re interested in reducing early exposure to poverty moving forward, this universal payment to families with children is a policy that most other high income countries already have. We had it for one year, and it worked, and we should probably consider bringing that back in the future.

We spent trillions in the pandemic, and this program was only a minor part of that spending. It’s affordable with respect to other social programs that we have. And if Congress needs to find cost offsets, in the book I talk about a couple of ways that it can make sure it has the resources to fund the program without increasing overall government spending.

You dedicated the book to the Rainbows House Homeless Youth Program in Columbia, Missouri. Is that how you first became interested in inequality research?

Parolin: I did my undergraduate work at the University of Missouri. And when I was there, I became more exposed to the issue of youth homelessness. I learned about the Rainbow House, a center that supports youth and children who were experiencing homelessness, and was struck by the contrast of this center existing next door to a university where 30,000 students were paying a lot of money for tuition and living pretty good lives.

So early on when I was in Columbia, I started working with this organization and got to know a lot of the residents there, got to know the staff, got to hear the wide array of reasons of why people who haven’t even become adults yet are entering homelessness and need shelter and support. Working with the youth experiencing homelessness, in large part, is what motivated me to study the topics of poverty, inequality, and homelessness, and definitely affected the trajectory of my academic work when I entered the research world. My experience there as a volunteer and as someone who actively supported the organization sticks with me today.

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