Supplemental Poverty Measure Research Articles

Including health insurance in poverty measurement: The impact of Massachusetts health reform on poverty

We develop and implement what we believe is the first conceptually valid health-inclusive poverty measure (HIPM) – a measure that includes health care or insurance in the poverty needs threshold and health insurance benefits in family resources – and we discuss its limitations. Building on the Census Bureau's Supplemental Poverty Measure, we construct a pilot HIPM for the under-65 population under ACA-like health reform in Massachusetts. This pilot demonstrates the practicality, face validity and value of a HIPM. Results suggest that public health insurance benefits and premium subsidies accounted for a substantial, one-third reduction in the health inclusive poverty rate.

Progress on Poverty? New Estimates of Historical Trends Using an Anchored Supplemental Poverty Measure.

This study examines historical trends in poverty using an anchored version of the U.S. Census Bureau's recently developed Research Supplemental Poverty Measure (SPM) estimated back to 1967. Although the SPM is estimated each year using a quasi-relative poverty threshold that varies over time with changes in families' expenditures on a core basket of goods and services, this study explores trends in poverty using an absolute, or anchored, SPM threshold. We believe the anchored measure offers two advantages. First, setting the threshold at the SPM's 2012 levels and estimating it back to 1967, adjusted only for changes in prices, is more directly comparable to the approach taken in official poverty statistics. Second, it allows for a better accounting of the roles that social policy, the labor market, and changing demographics play in trends in poverty rates over time, given that changes in the threshold are held constant. Results indicate that unlike official statistics that have shown poverty rates to be fairly flat since the 1960s, poverty rates have dropped by 40 % when measured using a historical anchored SPM over the same period. Results obtained from comparing poverty rates using a pretax/pretransfer measure of resources versus a post-tax/post-transfer measure of resources further show that government policies, not market incomes, are driving the declines observed over time.

Multi-Dimensional Deprivation in the U.S.

This paper presents a comprehensive analysis of multidimensional deprivation in the U.S. since the Great Recession, from 2008 to 2013. We estimate a Multidimensional Deprivation Index by compiling individual level data on several well-being dimensions from the American Community Survey. Our results indicate that the proportion of the population that is multidimensional deprived averages about 15 percent, which exceeds the prevalence of official income poverty. Lack of education, severe housing burden and lack of health insurance were some of the dimensions in which Americans were most deprived in. Though deprivation increased during the recession, it trended towards a decline between 2010 and 2013. Unlike the official and the supplemental poverty measure which did not show any decline, the deprivation index better reflects the economic recovery since the recession. Overall, the prevalence of deprivation was higher in the southern and the western states and among the Asian and the Hispanic population. Importantly, there was not much overlap between individuals who were income poor and those who were multidimensional deprived. In fact, almost 30 % of individuals with incomes slightly above the poverty threshold experienced multiple deprivations. Our analysis underscores the need to look beyond income based poverty statistics in order to fully realize the impact of the recession on individuals’ well-being.

Measuring poverty using the Supplemental Poverty Measure in the Panel Study of Income Dynamics, 1998 to 2010

The Supplemental Poverty Measure (SPM) was recently introduced by the U.S. Census Bureau as an alternative measure of poverty that addresses many shortcomings of the official poverty measure (OPM) to better reflect the resources households have available to meet their basic needs. The Census SPM is available only in the Current Population Survey (CPS). This paper describes a method for constructing SPM poverty estimates in the Panel Study of Income Dynamics (PSID), for the biennial years 1998 through 2010. A public-use dataset of individual-level SPM status produced in this analysis will be available for download on the PSID website. Annual SPM poverty estimates from the PSID are presented for the years 1998, 2000, 2002, 2004, 2006, 2008, and 2010 and compared to SPM estimates for the same years derived from CPS data by the Census Bureau and independent researchers. We find that SPM poverty rates in the PSID are somewhat lower than those found in the CPS, though trends over time and impact of specific SPM components are similar across the two datasets.

Child Poverty: Definition and Measurement

This article provides a discussion of what we mean when we refer to ‘child poverty.’ Many images come to mind when we discuss child poverty, but when we try to measure and quantify the extent of child poverty, we often use a very narrow concept. In this article a variety of poverty measures that are used in the United States are described and some of the differences between those measures are illustrated. In this article 3 measures are explored in detail: a relative measure of poverty that is used more often in an international context, the official US poverty measure, and a new supplemental poverty measure (SPM). The new measure differs from the other 2 because it takes into account noncash benefits that are provided to poor families. These include nutrition assistance such as food stamps, subsidized housing, and home energy assistance. The SPM also takes account of necessary expenses that families face, such as taxes and expenses related to work and health care. Comparing estimates for 2012, the SPM showed lower poverty rates for children than the other 2 measures. Because noncash benefits help those in extreme poverty, there were also lower percentages of children in extreme poverty with resources below half the SPM threshold. These results suggest that 2 important measures of poverty, the relative measure used in international comparisons, and the official poverty measure, are not able to gauge the effect of government programs on the alleviation of poverty, and the SPM illustrates that noncash benefits do help families meet their basic needs.

Trends in Child Poverty Using an Improved Measure of Poverty

The official measure of poverty has been used to assess trends in children's poverty rates for many decades. But because of flaws in official poverty statistics, these basic trends have the potential to be misleading. We use an augmented Current Population Survey data set that calculates an improved measure of poverty to reexamine child poverty rates between 1967 and 2012. This measure, the Anchored Supplemental Poverty Measure, is based partially on the US Census Bureau and Bureau of Labor Statistics' new Supplemental Poverty Measure. We focus on 3 age groups of children, those aged 0 to 5, 6 to 11, and 12 to 17 years. Young children have the highest poverty rates, both historically and today. However, among all age groups, long-term poverty trends have been more favorable than official statistics would suggest. This is entirely due to the effect of counting resources from government policies and programs, which have reduced poverty rates substantially for children of all ages. However, despite this progress, considerable disparities in the risk of poverty continue to exist by education level and family structure.

Child Poverty: The United Kingdom Experience

The United States has long struggled with high levels of child poverty. In 2014, 2 of 5 (42.9%) of all American children lived in economically insecure households and just over 1 in 5 children lived below the official absolute poverty line. These rates are high, but not intractable. Evidence from the US Census Bureau's Supplemental Poverty Measure, among other sources, shows the effect that public investments in cash and noncash transfers can have in reducing child poverty and improving child well-being. However, with significant disparities in services and supports for children across states and the projected decline of current federal spending on children, the United States is an international outlier in terms of public investments in children, particularly compared with other high-income nations. One such country, the United Kingdom (UK), faced similar child poverty challenges in recent decades. At the end of the 20th century, the British Prime Minister pledged to halve child poverty in a decade and eradicate it ‘within a generation.’ The Labour Government then set targets and dedicated resources in the form of income supplements, employment, child care, and education support. Child poverty levels nearly halved against an absolute measure by the end of the first decade. Subsequent changes in government and the economy slowed progress and have resulted in a very different approach. However, the UK child poverty target experience, 15 years in and spanning multiple changes in government, still offers a useful comparative example for US social policy moving forward.

Beyond Income Poverty: Measuring Disadvantage in Terms of Material Hardship and Health

The New York City (NYC) Longitudinal Study of Wellbeing, or “Poverty Tracker,” is a survey of approximately 2300 NYC residents. Its purpose is to provide a multidimensional and dynamic understanding of economic disadvantage in NYC. Measures of disadvantage were collected at baseline and a 12-month follow-up, and include 3 types of disadvantage: 1) income poverty, using a measure on the basis of the new Supplemental Poverty Measure; 2) material hardship, including indicators of food insecurity, housing hardship, unmet medical needs, utility cutoffs, and financial insecurity; and 3) adult health problems, which can drain family time and resources. In this article initial results for NYC families with children younger than the age of 18 years are presented. At baseline, 56% of families with children had 1 or more type of disadvantage, including 28% with income poverty, 39% with material hardship, and 17% with an adult health problem. Even among nonpoor families, 33% experienced material hardship and 14% reported an adult health problem. Two-thirds of all families faced disadvantage at either baseline or follow-up, with 46% experiencing some kind of disadvantage at both time points. Respondents with a college education were much less likely to face disadvantage. Even after adjusting for educational attainment and family characteristics, the families of black and Hispanic respondents had increased rates of disadvantage. Considering income poverty alone the extent of disadvantage among families with children in NYC is greatly understated. These results suggest that in addition to addressing income poverty, policymakers should give priority to efforts to reduce material hardship and help families cope with chronic physical or mental illness. The need for these resources extends far above the poverty line.

Exploring long-term economic well-being and child outcomes with the Supplemental Poverty Measure: evidence from the Panel Study of Income Dynamics

ABSTRACTThis study is the first to use the Supplemental Poverty Measure (SPM) to reexamine the relationships between long-term economic well-being and child outcomes. We decompose the differences between the Official Poverty Measure (OPM) and the SPM and examine such relationships with 15 cognitive, physical, and social–emotional outcomes for 754 ten- to nineteen-year-olds as reported in the Panel Study of Income Dynamics (PSID) 2007 Child Development Supplement. Using PSID data from 1998 to 2006, we measure long-term economic well-being using the average natural logarithm of the ratio of family resources to the poverty threshold with a series of models, beginning with the OPM and converting it step-by-step into the SPM. We find that some steps in constructing the SPM, especially including in-kind benefits and using the SPM thresholds, weaken the relationships between our economic well-being measure and the cognitive outcomes, although including in-kind benefits strengthens the relationships with many of ...

Elderly Poverty in the United States in the 21st Century: Exploring the Role of Assets in the Supplemental Poverty Measure

Official estimates of elderly poverty do not take into account either the medical needs of the elderly, which can be quite extensive, or the assets at their disposal, which may also be extensive. The new Supplemental Poverty Measure (SPM) explicitly takes into account medical needs but has been criticized for not concomitantly taking into account asset portfolios. In this paper we consider both jointly, using an approach adapted from a recent National Academy of Sciences report recommending methods for measuring poverty and medical risk while taking account of assets. We use longitudinal data from the Health and Retirement Study (HRS). The paper found that: Confirming previously published research, the elderly have considerably higher poverty rates under the SPM than under the official measure, and this disparity is driven by the SPM’s treatment of medical out-of-pocket expenditures. SPM poverty rates are considerably lower than actual SPM rates when an annuitized portion of liquid assets is incorporated into the measure of resources. When both liquid and near-liquid assets are considered, trends and levels of SPM poverty rates are extremely close to official poverty rates. SPM poverty rates would be even lower than official rates if all assets, including reverse mortgages on homes, were considered, though this might be considered a less “reasonable” approach by some observers. Incorporating assets has differing effects on pre-existing disparities in poverty rates: it exacerbates inequalities by race and marital status but reduces inequalities by age and has little effect on inequalities by gender. The policy implications of the findings are: Government agencies should consider examining the role of assets when assessing the trends and levels of poverty rates among older Americans. Promoting savings and asset ownership among younger Americans is likely to pay substantial dividends with respect to the economic well-being of older Americans in the future.

Family Structure and Children’s Economic Well-Being: Incorporating Same-Sex Cohabiting Mother Families

Research on family structure and child well-being rarely includes children in same-sex parent families, a notable omission since 28 % of female–female couple households contain children. Using the 2010–2013 pooled current population survey (CPS), we examined children’s economic well-being by family structure. These data were ideal for this study because they included a sizeable number of children in same-sex cohabiting mother families and the CPS measured both official and supplemental poverty, incorporating the cohabiting partner. Using the official poverty measure, children in same-sex cohabiting mother families were more likely to be poor than their counterparts in either different-sex cohabiting or married parent families. Using the supplemental poverty measure, children in same-sex mother families were no more likely to be poor than children in all other types of different-sex two-parent families.

New Measures of Economic Security and Development: Savings Goals for Short‐ and Long‐Term Economic Needs

The long‐term economic security and development of a family depend largely upon saving and asset accumulation, yet most measures of economic well‐being focus on short‐term consumption needs. In this study, we take a broader view by specifying four types of savings goals for US families: precautionary, retirement, homeownership, and education goals. This study develops methods of calculating these savings goals for different types of families under various assumptions, using information from various sources. Our calculations also consider investment gains and differences in dollar values over time. We show that families should save between $155 and $572 every month to address all four savings goals. We find that the number of children in a family affects total monthly savings goals considerably but that the number of adults has limited impact. Savings goals can assist families in making financial plans and provide savings targets useful in development of policy.

The War on Poverty: Measurement, Trends, and Policy.

AbstractWe present a 50‐year historical perspective of the nation's antipoverty efforts, describing the evolution of policy during four key periods since 1965. Over this half‐century, the initial heavy reliance on cash income support to poor families has eroded; increases in public support came largely in the form of in‐kind (e.g., Food Stamps) and tax‐related (e.g., the Earned Income Tax Credit) benefits. Work support and the supplementation of earnings substituted for direct support. These shifts eroded the safety net for the most disadvantaged in American society. Three poverty‐related analytical developments are also described. The rise of the Supplemental Poverty Measure (SPM)—taking account of noncash and tax‐related benefits—has corrected some of the serious weaknesses of the official poverty measure (OPM). The SPM measure indicates that the poverty rate has declined over time, rather than being essentially flat as the OPM implies. We also present snapshots of the composition of the poor population in the United States using both the OPM and the SPM, showing progress in reducing poverty overall and among specific socioeconomic subgroups since the beginning of the War on Poverty. Finally, we document the expenditure levels of numerous antipoverty programs that have accompanied the several phases of poverty policy and describe the effect of these efforts on the level of poverty. Although the effectiveness of government antipoverty transfers is debated, our findings indicate that the growth of antipoverty policies has reduced the overall level of poverty, with substantial reductions among the elderly, disabled, and blacks. However, the poverty rates for children, especially those living in single‐parent families, and families headed by a low‐skill, low‐education person, have increased. Rates of deep poverty (families living with less than one‐half of the poverty line) for the nonelderly population have not decreased, reflecting both the increasing labor market difficulties faced by the low‐skill population and the tilt of means‐tested benefits away from the poorest of the poor.

Catastrophic out-of-pocket payments for health and poverty nexus: evidence from Senegal.

Out-of-pocket payments are the primary source through which health expenditure is met in Senegal. However, these payments are financial burdens that lead to impoverishment when they become catastrophic. The purpose of this study is to cast light on the determinants of catastrophic household out-of-pocket health expenditures and to assess their implications on poverty. The 2011 poverty monitoring survey is used in this study. This survey aims to draw poverty profiles and to highlight the socio-economic characteristics of different social groups. In line with the concerns raised by the new Supplemental Poverty Measure, poverty statistics are adjusted to take into account household health expenditures and to estimate their impoverishing effects. To identify the determinants of the magnitude of catastrophic health expenditure, we implement a seemingly unrelated equations system of Tobit regressions to take into account censoring through a conditional mixed-process estimator procedure. We identify major causes of catastrophic expenditures, such as the level of overall health spending, the expensiveness of health goods and services, the characteristics of health facilities, the health stock shocks, the lack of insurance, etc. Results show evidence that catastrophic health expenditures jeopardize household welfare for some people that fall into poverty as a result of negative effects on disposable income and disruption of the material living standards of households. Our findings warrant further policy improvements to minimize the financial risks of out-of-pocket health expenditures and increase the efficiency of health care system for more effective poverty reduction strategies.

Waging War on Poverty: Poverty Trends Using a Historical Supplemental Poverty Measure.

Using data from the Consumer Expenditure Survey and the March Current Population Survey, we provide poverty estimates for 1967 to 2012 based on a historical Supplemental Poverty Measure (SPM). During this period, poverty, as officially measured, has stagnated. However, the official poverty measure (OPM) does not account for the effect of near-cash transfers on the financial resources available to families, an important omission since such transfers have become an increasingly important part of government anti-poverty policy. Applying the historical SPM, which does count such transfers, we find that trends in poverty have been more favorable than the OPM suggests and that government policies have played an important and growing role in reducing poverty-a role that is not evident when the OPM is used to assess poverty. We also find that government programs have played a particularly important role in alleviating child poverty and deep poverty, especially during economic downturns.

Trends in Deep Poverty from 1968 to 2011: The Influence of Family Structure, Employment Patterns, and the Safety Net

This paper examines the changing face of deep poverty in the United States over the past fifty years and the role of family structure, employment patterns, and governmental taxes and transfers in explaining these trends. Using a newly developed historical measure of poverty based on the Census Bureau's supplemental poverty measure, we find that deep poverty rates have been fairly constant over the past fifty years, both overall and for families with children. In view of changes in family structure and government policy over this period, the intransigence of deep poverty is surprising. However, this overall stability obscures changes in the demographics of individuals and families in deep poverty, as well as the role of government policy. Governmental transfers reduce the risk of deep poverty for all subgroups examined, but the significance and the role of these programs have changed over time.

More Likely to Be Poor Whatever the Measure: Working‐Age Persons with Disabilities in the United States*

ObjectiveThis article examines whether disability is a correlate of poverty when poverty is measured using (1) the official poverty measure; (2) the supplemental poverty measure (SPM); and (3) two multidimensional poverty measures created by the authors.MethodsData from the Current Population Survey are used to explore the relationship between poverty and disability for each measure. Differences across disability status were tested for statistical significance.ResultsDisability is associated with poverty, irrespective of the poverty measure under use. The gap in poverty rates between persons with and without disabilities is smaller when using the SPM as compared to the official poverty measure. The gap in poverty rates between persons with and without disabilities is highest when using multidimensional poverty measures.ConclusionWorking‐age persons with disabilities are more likely to be poor whatever the measure under use. They are a disadvantaged group in the United States.

More Likely to Be Poor Whatever the Measure: Persons with Disabilities in the U.S.

Objective: This paper examines whether disability is a correlate of poverty when poverty is measured using (1) the official poverty measure; (2) the supplemental poverty measure (SPM); and (3) two newly created multidimensional poverty measures. Methods: Data from the Current Population Survey is used to explore the relationship between poverty and disability for each measure. Differences across disability status were tested for statistical significance. Results: Disability is associated with poverty, irrespective of the poverty measure under use. The gap in poverty rates between persons with and without disabilities is smaller when using the SPM as compared to the official poverty measure. The gap in poverty rates between persons with and without disabilities is highest when using multidimensional poverty measures. Conclusion: Working age persons with disabilities are more likely to be poor whatever the measure under use. They are a disadvantaged group in the U.S.

Understanding the Link between Poverty and Food Insecurity among Children: Does the Definition of Poverty Matter?

This paper examines the association between poverty and food insecurity among children, using two different definitions of poverty-the official poverty measure (OPM) and the new supplemental poverty measure (SPM) of the Census Bureau, which is based on a more inclusive definition of family resources and needs. Our analysis is based on data from the 2001-11 Current Population Survey and shows that food insecurity and very low food security among children decline as income-to-needs ratio increases. The point estimates show that the associations are stronger as measured by the new supplemental measure of income-to-needs ratio than when estimated through the official measure. Statistical tests reject the hypothesis that poor households' odds of experiencing low food security are the same whether the SPM or OPM measure is used; but the tests do not reject the hypothesis when very low food security is the outcome.

Living on the edge: Assessing the economic impacts of potential disability benefit reductions for Social Security disability beneficiaries

BACKGROUND: Although Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) benefits are an important source of support to many people with disabilities, modifications to programs are under consideration given current and projected governmental fiscal constraints. OBJECTIVE:To provide data about levels of safety net cross-participation among working age SSDI and SSI program participants and to estimate how changes to disability benefit levels might influence the economic security of beneficiaries. METHODS: Data from the 2012 Current Population Survey is used to describe income and resources, program participation, and the share of family income and supplemental poverty measure resources received through public disability benefits. Hypothetical benefit reductions are estimated to assess economic impacts on the beneficiary population. RESULTS:Cross-participation is high among beneficiaries. Reductions in disability benefit income would have the largest impact on those beneficiaries who are participating in other safety net programs, but may also influence the movement of a portion of the remaining beneficiaries onto additional programs. CONCLUSION: Any modification of SSA disability programs will require careful consideration of how other public programs and services, including those provided within the field of vocational rehabilitation, can best support the economic security of persons with disabilities.