The impact of human capital and income supports in alleviating material hardships among low-income households

Cory Robert Wessman

ISU General Staff Papers from Iowa State University, Department of Economics

Abstract: This paper examines the differences in material hardships that exist among low-income households. The analysis draws on evidence from a recent survey of Iowa's Food Stamp households. The approach to measuring material hardships does not rely on income or other means testing, but on survey questions that quantify the degree of household material hardship. Three indexed measures of material hardship assess different aspects of hardship: food security, housing insecurity and economic insecurity. To understand the causes of material hardship, these indexes are used as dependent variables in ordinary least-squares regressions with three sets of explanatory variables: demographic variables, asset variables, and resource constraint/human capital variables. In this way, it is possible to determine how current demographic, asset, and resource constraint/human capital characteristics affect levels of well-being. The analysis reveals that the intuitively plausible relationships hold: levels of human capital, assets, and other resources are inversely related to levels of material hardship, although many of these variables are not statistically significant. In contrast, one demographic variable, being female, is shown to be a significant indicator of the prevalence of material hardships in a household. The results are shown to be useful in understanding the reasons for why different types of low-income households face different kinds of material hardships.

Date: 2001-01-01
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