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The US economy is the largest in the world, and at least among the large-population countries of the world (setting aside smaller economies strongly influenced by international capital flows like Monaco, Cayman Islands, and Ireland or by oil resources), it also has the highest per capita GDP. But at the same time, acccording to the US Census Bureau, 10.6% of the US population–that is, 35.9 million people–had incomes below the official US poverty rate 2024. Melissa S. Kearney and James Sullivan tackle the big questions of US anti-poverty policy in “Beyond the Myths: A Clearer Path to Poverty Alleviation in America” (forthcoming as a chapter in the book In Advancing America’s Prosperity, edited by Melissa S. Kearney and Luke Pardue, for the Aspen Economic Strategy Group).

Kearney and Sullivan start by reviewing well-known shortcomings of the standard poverty line: for example, it does not include non-cash benefits like Medicaid and food stamps, and it focuses on level of income vs. consumption. When you use alternative measures of poverty that focus on these issues, the US poverty rate has diminished substantially.

Thus, the top gray dashed line in the figure shows the official poverty line. The red line shows the alternative Supplemental Poverty Measure calculated by the Census Bureau, which includes non-cash benefits, and the bottom line measures consumption levels rather than income levels. The last two measures are “anchored” to produce the same poverty rate as the official measure in 1980, but then diverge substantially from the official rate over time. It seems fair to say that genuine progress has been made in reducing poverty, much more than is shown by measurements that use the official poverty line. They also provide data that the poverty rates for children, and for families with an unmarried parent and children, have fallen more dramatically than the overall figures here.

This figure shows measurements of specific indicators of well-being: how many rooms, having a dishwasher, air conditioning, a car, and so on. The red lines show the measures for those in the middle-income quintile; the blue lines show the bottom income quintile. Most of these measures have risen substantially in the last four decades.

Kearney and Sullivan also review the evidence on how much existing antipoverty programs reduce poverty: Medicaid, the Children’s Health Insurance Program, the Earned Income Tax Credit, the Child Tax Credit, Temporary Assistance to Needy Families, the Supplemental Nutrition Assistance Program, the Housing Choice Voucher program, and others. There are of course ongoing controversies over how to design these programs. But the changes in these programs over time are also clearly connected–by the timing of poverty reductions and the groups most affected at each time–to the lower poverty rates reported above.

The question of how to reduce poverty further is a tricky one. The authors emphasize that for some people, poverty is a sort of trampoline: you fall into it, you need some one-time help, but then you bounce out. But for other people, poverty is an ongoing state of life, or even an intergenerational condition. Kearney and Sullivan are skeptical of proposals that a guaranteed income boost will help such people. They write:

[T]he best evidence to date on guaranteed-income programs suggests that the provision of monthly income assistance does not result in recipients using the provided cash to make investments in their education or personal situation in ways that catapult them to economic self-sufficiency. The most compelling causal evidence to date on the likely effects of a guaranteed basic income in the US come from a pair of studies written in 2024 by a research team consisting of academic economists from four different universities and researchers from OpenResearch (Vivalt et al. 2024; Miller et al. 2024). These studies analyze the results of a large-scale randomized controlled trial (RCT)—the OpenResearch Unconditional Income Study (ORUS)—that ran between 2020 and 2023. As part of this RCT, three thousand low-income adults ages 21 to 40 in Illinois and Texas were randomly assigned into a treatment group of a thousand adults who received $1,000 in unconditional cash per month for three years and a control group of two thousand participants who received a much more modest $50 per month for three years.

As these studies report, a common pattern was that recipients of additional cash (and their partners) worked fewer hours, and did not show an “increase in time spent taking care of family members, volunteering, or pursuing education or training.” The additional income did not improve physical or mental health, either. Another basic income program aimed at low-income mothers didn’t show positive effects on child development. Although there is again room to think about how to redesign these kinds of basic income programs in the hope of better results: “Just giving people income is not a sufficient response to the challenge of persistent poverty.”

As an alternative, Kearney and Sullivan argue: “We propose four specific areas of investment: advancing skills and educational attainment; building strong families; addressing individual barriers to flourishing; and boosting upward mobility among poor children through investments in their nutrition, health, early childhood education, and housing.” Unlike the results of studies on guaranteed basic income, they present an array of evidence on programs in these areas that have demonstrated a substantial payoff. Moving forward, the strategy for fighting persistent poverty should build on the success of the existing programs, but focus more closely on targeted programs with measurable outcomes.

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