The Impact of Unemployment on Alternative Poverty Measures

Abstract

The analysis uses data from the March Current Population Survey to estimate state-level cross-section/time-series models of the effects of unemployment on alternative poverty indexes. The indexes include the official headcount rate and alternatives based on improved identification and aggregation procedures. The estimated effects turn critically on the measurement approaches, both for the total sample population and for selected sub-groups. For some broader, distribution-sensitive indexes, the declines in unemployment of the last decade had no significant impact on poverty. The findings thus provide important lessons for researchers exploring the links between economic conditions and poverty and for policymakers developing strategies to reduce poverty.