In 1964, President Lyndon Johnson declared the War on Poverty. This set in motion the creation of the modern social safety net, including a major expansion of food stamps (now the Supplemental Nutrition Assistance Program), the introduction of Medicaid and Medicare, and later anti-poverty policies such as refundable tax credits. Despite these programs, the official poverty rate has remained largely stagnant for the past half century. This has led some to argue that the War on Poverty has failed. President Ronald Reagan famously declared in his 1988 State of the Union address: “My friends, some years ago, the federal government declared a war on poverty, and poverty won.”

However, researchers have long recognized that the official poverty measure is an unreliable marker of progress because it fails to account for taxes, excludes non-cash benefits, and overstates inflation when adjusting thresholds over time. Research that attempts to address these shortcomings has found that poverty has fallen since the 1960s, but it is unclear whether the modern social safety net was necessary to reduce poverty. While anti-poverty programs provide substantial resources to low-income households, recipients might reduce their earnings and alter family-formation decisions, which could offset the income gains.

Our research provides the first comparison of poverty trends before and after the War on Poverty began using a comprehensive and consistently defined measure of income from 1939 to 2023. We produced these measures by imputing cash and non-cash benefits and health insurance information to census data from 1940, 1950, and 1960. We also built on recent research aimed at improving the accuracy of market income estimates for these years. We measured trends from 1963 to 2023 using the Current Population Survey Annual Social and Economic Supplement to create a post-tax, post-transfer income measure (i.e., a measure that accounts for all taxes and government benefits). We anchored our poverty measure to the official poverty rate in 1963 (19.5 percent), marking the beginning of the War on Poverty. We adjusted income thresholds for inflation and the size of each person’s household.

From 1939 to 1963, the overall poverty rate—using our post-tax, post-transfer income measure (excluding health insurance)—fell from 48.5 percent to 19.5 percent, a 29.0 percentage point reduction in just under a quarter century. This decline in poverty was accompanied by a 76 percent increase in real median income over the same period, reflecting the United States’ strong economic growth following the Great Depression in the 1940s and the post-war boom in the 1950s. Between 1963 and 2023, the poverty rate fell by another 15.7 percentage points to 3.7 percent. However, the pace of poverty reduction was no faster after the War on Poverty began than before, even when applying a consistent initial poverty rate (19.5 percent) to compare trends in each period. Under this approach, poverty fell to 5.8 percent between 1939 and 1963 but only fell to 7.8 percent between 1963 and 1987.

These poverty reductions varied across groups. Between 1939 and 1963, poverty fell from 84.1 percent to 50.6 percent among black people (a 33.4 percentage point decline) and from 62.0 percent to 21.9 percent among children of any race (a 40.1 percentage point decline). These groups continued to experience declines in poverty thereafter, and by 2023, poverty rates fell to 6.0 percent for black people and 3.4 percent for children. Including the full market value of health insurance in our income measure only slightly changes the reduction in poverty prior to the War on Poverty, reflecting the lack of Medicaid and Medicare coverage during that period. However, including health insurance has a larger effect on reducing poverty afterward, with the overall poverty rate falling to 1.6 percent by 2023.

Our findings above involve measures of absolute poverty, meaning we adjusted income thresholds over time only for inflation. Measuring relative poverty requires adjusting income thresholds over time in proportion to changes in nominal median income, which grew more quickly than inflation during this period. Although absolute poverty fell substantially from 1939 to 2023, progress in reducing relative poverty was much slower. Relative poverty fell from 25.4 percent in 1939 to 19.5 percent in 1963 before rising to 20.8 percent in 2023.

Our research also examines whether increases in market income alone (rather than government transfers) were sufficient to lift each person above the same thresholds used to assess post-tax, post-transfer poverty. From 1939 to 1959, market income poverty fell by 39.1 percentage points among all children and 23.5 percentage points among all working-age adults, accounting for the entire decline in post-tax, post-transfer poverty for these groups over the same period. These declines in market income poverty were even larger for black children (32.0 percentage points) and black working-age adults (36.1 percentage points). In contrast, between 1967 and 1993, market income poverty was mostly stagnant for children and working-age adults, regardless of race, before declining sharply during the welfare reforms of the 1990s. Black children experienced the largest decline in market income poverty during this time: an 18.4 percentage point decline from 1993 to 2000. Market income poverty among children and working-age adults fell again during the recovery from the Great Recession, though by a smaller amount than during the 1990s.

Our study also measures dependency over time, defined as the percentage of people receiving more than half their household income from the government. Among working-age adults, dependency ranged from 1.6 to 2.9 percent between 1939 and 1959. In contrast, dependency in this group increased substantially following the declaration of the War on Poverty and ranged from 6.8 percent to 11.3 percent between 1972 and 2023, except in 2020 and 2021, when it reached 15.2 percent. Dependency among black working-age adults peaked at 5.7 percent prior to the War on Poverty and 21.9 percent afterward, excluding 2020 and 2021, when it reached 26.6 percent.

Our findings show that poverty fell substantially prior to the War on Poverty, primarily due to increases in market income, without a substantial rise in the dependency of working-age adults and their children on government transfers for most of their income. Poverty continued to decline after the War on Poverty began, but this progress was sustained only by the increasing generosity of transfers, as market income poverty rose and dependency increased. It was not until the welfare reforms of the 1990s and the recovery from the Great Recession that poverty and dependency fell simultaneously. These trends were particularly stark for black people, who experienced a steep decline in poverty before the War on Poverty, primarily driven by an increase in their market income, and a large rise in dependency after it began.

Our research cannot establish whether poverty would have fallen after 1963 if the War on Poverty had not begun. Growth in market incomes could have stagnated from the late 1960s through the early 1990s due to slower economic growth than the stronger post-war growth of the 1940s and 1950s. Our findings nonetheless provide important historical context for evaluating the War on Poverty—poverty was already falling substantially without the modern social safety net.

Note
This research brief is based on Richard V. Burkhauser and Kevin Corinth, “Poverty and Dependency in the United States, 1939–2023,” National Bureau of Economic Research Working Paper no. 34759, January 2026.