Measuring Income and Poverty in the United States

Asia-pacific Social Science Review, 2002

1977

Journal of European Social Policy, 2006

Research Papers in Economics, 2017

Questions about the adequacy of the official poverty measure led to the development of the Supplemental Poverty Measure, designed to be released concurrently with the official poverty measure. We raise two concerns with the Supplemental Poverty Measure: a discontinuity in the economies of scale implied by the equivalence scale and the adjustment for local prices using only housing costs. We propose corrections for both issues that can be applied by anyone using the public use files of the Current Population Survey. The changes we propose would have the greatest effect on poverty rates for the elderly and would reduce the difference in poverty rates by metro status.

2009

Social Service Review, 2002

Journal of Marriage and Family, 2005

Policy Review, 2006

FOR WELL OVER a century, with ever-expanding scale and scope, the United States government has been generating statistics that might illuminate the plight of society's poorest and most vulnerable elements. From the beginning, the express objective of such efforts has always been to abet purposeful action to protect the weak, better the condition of the needy, and progressively enhance the general weal. America's official quest to describe the circumstances of the disadvantaged in quantitative terms began in the 1870s and the 1880s, with the Massachusetts Bureau of Statistics of Labor and the U.S. Bureau of Labor Statistics, and the initial efforts to compile systematic information on cost-of-living, wages, and employment conditions for urban working households in the United States. 1 U.S. statistical capabilities for describing the material well-being of the nation's population through numbers have developed greatly since then. Today the United States government regularly compiles hundreds upon hundreds of social and economic indicators that bear on poverty or progress on the domestic scene. Within that now-vast compendium, however, one number on deprivation and need in modern America is unquestionably more important than any of the others-and has been so regarded for the past four decades. This is what is commonly known as the "poverty rate" (the informal locution for the much more technical mouthful "the incidence of poverty as estimated against the federal poverty measure.") First unveiled in early 1965, shortly after the launch of the Johnson administration's "War on Poverty," the poverty rate is a measure identifying households with incomes falling below an official "poverty threshold" (levels based on that household's size and composition, devised to be fixed and unchanging over time). Almost immediately, this calculated federal poverty measure was accorded a special significance in the national conversation on the U.S. poverty situation and in policymakers' responses to the problem. Just months after its debut-in May 1965-the War on Poverty's new Office of Economic Opportunity (OEO) designated the measure as its unofficial "working definition" of poverty. By August 1969, the Bureau of the Budget had stipulated that the poverty thresholds used in calculating American poverty rates would constitute the federal government's official statistical definition for poverty. It has remained so ever since. 2 The authority and credibility that the official poverty rate (OPR) enjoys as a specially telling indicator of American domestic want is revealed in its unique official treatment. The OPR is regularly calculated not only for the country as a whole, but for every locality down to the county level and beyond-on to the level of the school district. (It is even available at the level of the census tract: enumerative designations that demarcate the nation into subdivisions of as few as one thousand residents.) Furthermore, U.S. government antipoverty spending has come to be calibrated against, and made contingent upon, this particular measure. Everywhere in America today, eligibility for means-tested public benefits depends on the relationship between a household's income and the apposite poverty threshold. In Fiscal Year 2002 (the latest period for which such figures are readily available), perhaps $300 billion in public funds were allocated directly against the criterion of the "poverty guideline" (the Department of Health and Human Services' version of poverty thresholds). 3 The poverty rate currently also conditions many billions of dollars of additional public spending not directly earmarked for anti-poverty programs: for example, as a component in the complex formulae through which community grants (what used to be called "revenue sharing") dispense funds to local communities.

Journal of Policy Analysis and Management, 2008

This paper discusses the reasons why the current official U.S. poverty measure is outdated and nonresponsive to many anti-poverty initiatives. A variety of efforts to update and improve the statistic have failed, for political, technical, and institutional reasons. Meanwhile, the European Union is taking a very different approach to poverty measurement. The paper ends with four recommended steps that would allow the U.S. to improve its measurement of poverty and economic need." 1 For a more extended discussion of all of these issues (and others), see Citro and Michael (1995) or Ruggles (1990); Haveman (2007) provides a recent overview of these issues.

This article makes a contribution to the ongoing debate on the most appropriate method of measuring poverty for interventionist purposes in rural areas. It is informed by the Zimbabwe experience that income-based measures may not always adequately target those most in need of social support. A new approach is proposed that focuses on the non-income component of poverty. The aim is to assist 'technocrats' to better target the poor in need of a social safety net in crisis situations. The search is for a 'credible' measure that will be acceptable to various interest groups including the poor. Thus the proposed measure derived by means of a consensual approach meets this objective. The article describes and discusses the weaknesses of conventional poverty measures, divided into two broad categories of those pre-and post-dating Sen's introduction of the capability concept. It then uses these to explore the conventional approaches (the dominant income measures) and flag their operational deficiencies, and then postulates an asset threshold model, the minimally adequate asset level (MAAL), which is contextspecific and is based on the consensual approach. Using such a threshold as a basis for intervention makes the intervention direct, for example, asset for asset. An asset-threshold brings out particular specific and peculiar circumstances of the poor as well as providing a fresh perspective and framework for measuring poverty. Thus an asset-threshold can be useful for purposes of allocating resources and setting and monitoring targets. However, the asset threshold is not transferable to other places if typicality cannot be established.

JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact [email protected]. ABSTRACT Both poverty research and social policy employ a variety of poverty definitions. The choice of one specific definition has major consequences for the resulting poverty population. This paper uses eight different definitions of poverty to determine who is poor, using a 1983 Dutch sample of more than 12,000 households. Poverty according to each of these definitions is compared over different subgroups. The relevance of the choice between definitions for social policy is shown by the presentation of poverty percentages according to the various definitions, which vary widely.

European Journal of Political Economy, 2002

The aim of this paper is twofold. The first is to illustrate that a poverty index can be derived from a decomposition of an appropriate inequality index. The advantage of decomposing an inequality index is that the decomposition supplies additional information that is useful for poverty measurement. The second purpose is to illustrate the kind of policy analysis that can be performed with a decomposed inequality index by decomposing the Gini coefficient into Sen's poverty index and other components. The methodology suggests an answer to the following question: Assume that a tax has been imposed on an expenditure item or an income source, what will be the impact on the components of the inequality index? The analysis is performed with data from Romania. D 2002 Published by Elsevier Science B.V.

Social Indicators Research, 2013

1 Here we refer to income in a general way. It may actually be income, or consumption, or expenditure.

1996

The aim of this paper is twofold. The first is to illustrate that a poverty index can be derived from a decomposition of an appropriate inequality index. The advantage of decomposing an inequality index is that the decomposition supplies additional information that is useful for poverty measurement. The second purpose is to illustrate the kind of policy analysis that can be performed with a decomposed inequality index by decomposing the Gini coefficient into Sen's poverty index and other components. The methodology suggests an answer to the following question: Assume that a tax has been imposed on an expenditure item or an income source, what will be the impact on the components of the inequality index? The analysis is performed with data from Romania. D 2002 Published by Elsevier Science B.V. 0176-2680/02/$ -see front matter D 2002 Published by Elsevier Science B.V. PII: S 0 1 7 6 -2 6 8 0 ( 0 1 ) 0 0 0 6 9 -6 www.elsevier.com/locate/econbase *