Keeping Up with Inflation: How policy indexation can enhance poverty reduction
As families across the United States contend with record-high inflation, the values of several government benefits and tax credits are not keeping up. This paper, published by the Century Foundation, examines the antipoverty potential of one policy, the expanded Child Tax Credit, under different scenarios to shine a spotlight on the importance of inflation indexation for optimizing the antipoverty effects of government policies.
Inflation Inequality Leads to Three Million More People in Poverty
Recent research shows that prices have risen more quickly for people at the bottom of the income distribution than for those at the top—a phenomenon dubbed “inflation inequality.” In this brief, we utilize an adjusted inflation index that accounts for inflation inequality across the income distribution and re-estimate recent trends in poverty and income inequality from 2004 to 2018 and find that inflation inequality significantly accentuates both the incidence of poverty and income inequality.