Recession and the Social Economy

Abstract

Recessions often see an increase in unmet needs for food, shelter, and health care. For many households, a spell of unemployment entails economic hardship, but they can cover basic spending on groceries, utilities, the rent or mortgage, medications, and so forth, using the income of a second earner, accumulated savings, and/or unemployment insurance. But other households, especially those who are economically vulnerable to begin with, tip more easily into difficulties paying for basics of everyday life. In principle, various government programs can help cover basic consumption needs, including food stamps, Medicaid health insurance, unemployment insurance, housing vouchers, and welfare payments. Yet especially in recessions, when people who lose their jobs do not know how long they will be unemployed, it may be awhile before they apply for benefits and begin to receive support, if they are eligible. Moreover, government benefits usually only partially cover spending on basics; thus, for example, many recipients report that their food stamps run out before the end of the month. Additionally, some people with unmet basic needs may not be eligible for government programs (e.g., immigrants with problematic status), while others prefer not to rely on public support.