The Great Society Worked in Reducing Poverty

Alan Krueger, Princeton economist, writing in the NYT (Jan. 8, 2004):

''THIS administration today, here and now, declares unconditional war on poverty in America.'' With those words, Lyndon B. Johnson began the war on poverty 40 years ago today, in his first State of the Union address.

To fight poverty, Congress started Head Start, Job Corps, Medicare and Medicaid programs, and increased the generosity of other programs, including Social Security and Aid to Families With Dependent Children. Here are some of the main results and lessons from this ''40 Years War'' on poverty.

Progress has been uneven, with some clear early successes followed by backsliding and then another period of progress, which has so far stalled under the Bush administration. The official poverty rate fell from 19.5 percent in 1963 to 11.1 percent in 1973. Since 1973 it has remained stubbornly stable, rising in the 1970's and 1980's and falling in the 1990's. By 2000, the poverty rate returned to 11.3 percent; last year, it inched up to 12.1 percent.

The trend is not the same for all groups. For the aged, the poverty rate fell from close to 30 percent in 1963 to 16.3 percent in 1973, then to 10.4 percent in 2002. The share of children in poverty fell from 23.1 to 14.4 percent in the first decade of the war on poverty, but increased to 16.7 percent over the next three decades. For blacks, the rate fell from more than 40 percent before the war on poverty to 31 percent in 1973, and was 24 percent in 2002, still disturbingly high but much lower than it had been....

Immigration also matters. Immigrants have a higher poverty rate, and the gap has been growing. Additionally, the rate of immigration has increased. As a consequence, the percentage of all those in poverty who are immigrants increased from 10 percent in 1979 to 20 percent in 1998....

Antipoverty policy has evolved as political winds shifted and as social science knowledge advanced. Bill Clinton ran on a platform to ''make work pay'' and ''end welfare as we know it'' -- and managed to do both. Although it is tempting to conclude that the United States became less generous to the poor in the 1990's, the story is more complicated. Even as time limits restricted welfare participation, more benefits became available for those who work. Increases in the minimum wage and the earned-income tax credit, and legislation requiring states to provide Medicaid to children in poor families even if they went off public assistance, all increased the value of work. The decline in poverty in the 1990's was a result of more than a strong economy, although the boom certainly helped and its effect was probably amplified by these policy changes.