The Unseen Poverty Driving Homelessness

A short time ago, Bruce D. Meyer, the McCormick Foundation Professor at the University of Chicago Harris School of Public Policy, walked a man who was experiencing homelessness out from a neighbor’s apartment vestibule to avoid a call to the police. The two men later struck up what Meyer described as “quite an interesting discussion” for about a half hour.

It was a poignant moment for Meyer, one of the nation’s foremost academic authorities on issues such as poverty, inequality, government safety net programs, and similar topics. He was about to release a pathbreaking research paper on factors that lead people to experience homelessness.

“He was in exactly the kind of situation that we found in the research,” Meyer recalled, “and said that he has been basically living like he does, barely getting by, since he was 16–and now, he’s 55.”

The first national survey on homelessness since 1996, the research that Meyer coordinated is considered the most detailed and accurate portrait of income, employment, and safety net participation for a cross-section of the U.S. homeless population. “Homelessness and the Persistence of Deprivation: Income, Employment, and Safety Net Participation” was released by UChicago’s Becker Friedman Institute for Economics and includes a main sample of nearly 140,000 homeless adults across the country, including in Chicago.

Using confidential personal identification information that has been anonymized, researchers linked the individuals to data from the IRS and a wide variety of state and federal safety net programs, examining the lives of those living in homelessness in the decade surrounding the year 2010.

The exhaustive, detailed research concludes—among other revelations—that a modest disruption in the lives of people who experience long-term, severe deprivation is sufficient to  push individuals into homelessness. That conclusion contradicts in part conventional wisdom that a large and sudden loss of income is a key trigger.

“What we find is that this population is, in summary, is not having a bad week or a bad month,” Meyer said. “It’s a population that’s been deprived for a very long time—experiencing things like very low income, and very high receipt of government benefits. It looks like it doesn’t take much to precipitate a homelessness spell for this population because they’re suffering such long-term disadvantage.”

Added Harris PhD student Angela Wyse, who worked with Meyer and two other researchers on the project: “When you’re living on the edge, it doesn’t take a large shock to lead to homelessness.”

Employed, connected, and homeless

Another surprising finding from the research is that people experiencing homelessness often are employed and receiving support services from government agencies, including Supplemental Security Income and Disability Insurance, Medicare, or Medicaid.

Ninety-seven percent of sheltered homeless adults and 93 percent of unsheltered homeless adults were formally employed or enrolled in at least one safety net program during the year they were observed, the research showed. Median yearly earnings of people in the study totaled about $8,300.

“A main takeaway is that people are experiencing homelessness not because they’re disconnected to formal employment and these safety net programs,” Wyse said. “But rather that they experience homelessness despite these connections. Formal work and the existing safety net don’t appear to be sufficient for preventing homelessness.”

Researchers did find that over time, employment among people experiencing homelessness seems to decline while disability benefits rise. Also, the analysis revealed that while program receipt tends to rise over time, there is evidence that some people have trouble consistently receiving benefits over time. Beyond employment, the analysis gleaned insight into whether the straightforward approach of providing housing to the homeless is an answer to the problem.

“I think the message is that housing is one possible component, but it’s not the full solution,” Meyer said. “You can certainly improve individuals’ lives by getting them housing, but this population faces a lot of other problems and they’re not likely to be able to support themselves even with housing.”

Those problems can include poor physical and mental health, hunger, substance abuse, and low levels of educational attainment.

The research suggests a more effective, short-term strategy may be providing emergency payments—$1,000 to $2,000—to people at risk of homelessness..

But even that approach does not appear to prevent the long-term deprivation that leaves people vulnerable to homelessness, Meyer said.

Those are among numerous insights throughout the 67-page report distilling the research. Other conclusions include:

• Black individuals who are homeless tend to have higher incomes and employment than white homeless people. And mortality among white homeless men and women is higher than those for Black individuals who are homeless. “We suspect that’s because whites on average have more of a safety net in terms of family and friends,” Meyer said. “So, when they do become homeless, it’s more from drug addiction and mental illness rather than strictly economic circumstances.”
• Policies aimed at reducing or eliminating homelessness have left out a significant segment of the homeless population. “We tend to focus policy on poverty among the elderly or families with kids or single parents with kids,” Meyer said. “But there’s this other segment—a large segment of the homeless population that are mostly single men who are very long-term deprived—that we don’t have many programs for. They’re largely ignored in terms of government benefits.”

Poverty less visible than homelessness

The main sample of the data, which consists of 139,000 adults recorded as homeless in the 2010 Census, is by far the largest and most representative sample used to study the questions around what leads people to homelessness. A total of 89,500 in the sample were residing in homeless shelters; 49,500 were unsheltered.

In addition to Meyer and Wyse, the research team included Gillian Meyer, an applied economics doctoral student from University of Pennsylvania; Alexa Grunwaldt, PhD student in economics at Yale University; and Derek Wu, assistant professor of public policy and economics at University of Virginia.

As comprehensive as their research was, Meyer and his colleagues note two limitations in the analysis.

“We do not examine individual dynamics in these outcomes,” the research report states. “This approach yields useful summary measures of the level of deprivation… and how this level changes on average across years, but it does not allow us to describe individual-level variability in these outcomes.”

The authors also state that the study is limited by not observing the duration of homelessness spells for individuals in the data’s Census samples.

“In other words, we expect most people in our Census sample to have been housed for much of the decade surrounding 2010,” the report states. “Yet our findings do not suggest that 2010 was [a] major aberration in these individuals’ long-term economic trajectories; they face similar levels of material deprivation even in years where we expect most of these individuals to have been housed.”

In the future, the researchers state, they plan to examine individual income dynamics to better understand income volatility associated with homelessness. Although data on Chicago homelessness was included in the national survey, Meyer also would like to conduct more Chicago-specific research on homelessness.

All the work is aimed at gaining a deeper, clearer, and broader understanding of a seemingly intractable problem with the goal of developing policies that might solve it.

“Literal homelessness is a severe hardship that rightly draws widespread concern,” Meyer and his team write in the report’s conclusion, “but the context of persistent, extreme poverty within which homelessness arises—poverty that is less visible than literal homelessness, and hence less likely to capture the attention of policymakers—may be nearly as alarming and deserving of our concern.”