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General Research on Income and Poverty
General Research on Income and Poverty
According to the US Census Bureau, the official poverty rate in 2012 was 15.0– down slightly from 15.1 percent in 2010. After an increase of 2.6 percentage points between 2007 and 2010 (from 12.5 percent to 15.1 percent), the poverty rate has stagnated, decreasing only 0.1 percentage point between 2010 and 2012. The official poverty threshold is based on the costs of food for different types of families. Other measures of poverty are based on different thresholds of need, definitions of income, or regional adjustments and may show different trends.
The number of people in poverty in 2012 (46.5 million) is the largest number in the 54 years for which poverty estimates have been published. Numerous studies have examined the effects of programs and policies on poverty and other economic self-sufficiency outcomes, such as income, earnings, and employment. The General Research on Income and Poverty section will explore theories, trends, measures, and predictors and outcomes as they relate to income and poverty for low-income individuals and families.
View recommendations from the SSRC Librarian on General Research on Income and Poverty and relevant federal laws and regulations below.
Poverty measures establish the income level which is used to determine whether a family/individual lives in poverty. Poverty measures also provide a framework for understanding the number and demographics of people living in poverty. Alternative measures have been developed at the federal, state, and local levels to supplement the official poverty measure, which the U.S. Census Bureau reports on annually. Researchers, practitioners, and policymakers are using the official poverty measure, supplemental poverty measure (also reported on annually by the U.S. Census), and other measures to capture poverty and income trends and data. Click the phrase below to view selected research and resources on poverty measures.
Below are selections from the SSRC Library on poverty measures. Click the titles to learn more about the research and resources.
Poverty measures set a poverty line or threshold and then evaluate resources against that threshold. The official poverty measure (OPM) is flawed on both counts. Because of these (and other) failings, statistics using the official poverty measure do not provide an accurate picture of poverty or the role of government policies in combating poverty. To address these well-known limitations, the Census Bureau recently implemented a supplemental poverty measure (SPM). In recent work, we have produced SPM-like estimates for the period 1967 to 2012, using historical data on incomes from the 1968 to 2013 Annual Social and Economic Supplement to the Current Population Survey (March CPS) and historical data on expenditures from the 1961, 1972/73, and 1980 to 2012 Consumer Expenditure Survey (CEX). One possible limitation of our historical SPM estimates is that they rely on annual calculations of thresholds even in years where we have incomplete CEX data. For these reasons, in this report we apply an alternative poverty measure that differs from the SPM in only one respect. Instead of having a threshold that is re-calculated over time, we use today's threshold and carry it back historically by adjusting it for inflation using the CPI-U-RS. (author abstract)
This fact sheet presents a rather different picture of poverty in the United States for the various demographic groups based on the Supplemental Poverty Measure and compares this new picture to the understanding of poverty based on the official measure, using data for the 2010 calendar year. (author abstract)
This paper aims at following previous comparisons between the official measure and budget standards to gain insight into the relationship between the SPM and a budget-based standard. Specifically the authors address the question; should the population below 200 percent of the SPM threshold be equated to the population below 200 percent of the official threshold and therefore below the family-budget needs standard? To do this the authors examine in detail the construction of a particular budget standard and compare that to the construction of the SPM. In this process, the authors characterize a specific percentage of the SPM thresholds as being at a level of ‘low income’. (author abstract)
For decades, the official poverty rate has been criticized by economists, policymakers, and activists from both the left and the right. A variety of incremental improvements and wholesale changes have been proposed by both federal and private sector researchers. What these research efforts show, however, is not that one definition of poverty is unequivocally correct, but rather how challenging poverty is to define. (author abstract)
Since the onset of the Great Recession, the nation has been focused on a steady stream of mostly discouraging unemployment, poverty and housing foreclosure numbers. While this data is important, it tells us only about those suffering the most severe of financial crises. It does not help identify the millions within the United States who live above the poverty line and yet struggle to pay ever-increasing housing, food, health care and other expenses.
Wider Opportunities for Women (WOW) has compared working-age adults’ earnings and household incomes to The Basic Economic Security Tables (BEST) for the United States, a measure of the basic needs and assets workers and their households require for economic security. Living Below the Line: Economic Insecurity and America’s Families compares pre-tax incomes from 2007 through 2011 to BEST basic needs budgets for more than 400 family types, and finds that approximately 45% of Americans live on incomes that fail to provide basic economic security.2 This report identifies who, specifically, within the United States is living below the BEST Indexes. It tells an important story about the contemporary value of work and the relationship between economic security and gender, race/ethnicity, family structure and education. (author abstract)
In 2006, New York City Mayor Michael R. Bloomberg convened a Commission on Economic Opportunity, directing it to craft innovative approaches to reducing poverty in the City. The Commission members took a broad view of their mandate. What, they asked, are we trying to reduce? How do we know if we are succeeding? To answer questions like these, policymakers need broad social indicators. The Commissioners soon learned what social scientists have known for decades: the nation’s fifty-year-old measure of poverty no longer provides useful information. In the 1960s, the poverty measure was a focal point for the nation’s growing concern about poverty. Over the decades, society evolved and policies have shifted, but the official poverty measure remains frozen in time. As a result, it has steadily lost credibility and usefulness. The Commissioners concluded that, along with new programs, the City needed to develop a new measure of poverty. Mayor Bloomberg embraced the Commission’s recommendation and the development of an improved measure of poverty became a project of the organization he created to implement the Commission’s recommendations, the New York City Center for Economic Opportunity (CEO).
There has been no shortage of proposals for improving the way America counts its poor. The most influential of these was developed, at the request of Congress, by the National Academy of Sciences (NAS). Although the NAS’s proposal was issued in 1995, neither the Federal nor any other branch of government had adopted this approach until 2008 when CEO released its first working paper on poverty in New York City. This study – our fifth – continues our practice of issuing annual updates of our measure. (author abstract)
This is the third report describing research on the Supplemental Poverty Measure (SPM) released by the U.S. Census Bureau, with support from the Bureau of Labor Statistics (BLS). The SPM extends the official poverty measure by taking account of many of the government programs designed to assist low-income families and individuals that are not included in the current official poverty measure. The current official poverty measure was developed in the early 1960s, and only a few minor changes have been implemented since it was first adopted in 1969 (Orshansky, 1963, 1965a, 1965b; Fisher, 1992). The official measure consists of a set of thresholds for families of different sizes and compositions that are compared with before-tax cash income to determine a family’s poverty status. At the time they were developed, the official poverty thresholds represented the cost of a minimum diet multiplied by three (to allow for expenditures on other goods and services).
This report presents updated estimates of the prevalence of poverty in the United States, overall and for selected demographic groups, using the official measure and the SPM. Section one presents differences between the official poverty measure and the SPM. Comparing the two measures sheds light on the effects of noncash benefits, taxes, and other nondiscretionary expenses on measured economic wellbeing. The composition of the poverty populations using the two measures is examined across subgroups to better understand the incidence and receipt of benefits and taxes that are missed in the official statistics. The distribution of income-to-poverty threshold ratios and poverty rates by state are estimated and compared for the two measures. The second section of the report examines the SPM itself. Effects of benefits and expenses on SPM rates are explicitly examined, and SPM estimates for 2012 are compared with the 2011 figures to assess changes in SPM rates from the previous year. (author abstract)
Federal Laws and Regulations serve as the building blocks of policy and practice on General Research on Income and Poverty. The impact of these laws and regulations are a focus of research. Click the first link below to view legislative resources related to income and poverty. Click the second link to browse additional self-sufficiency legislation and policy in the SSRC library.