Search
Browse By Day
Browse By Time
Browse By Person
Browse By Policy Area
Browse By Session Type
Browse By Keyword
Program Calendar
Personal Schedule
Sign In
Search Tips
Each September, the U.S. Census Bureau releases two indicators of economic well-being: the official poverty rate and the Supplemental Poverty Rate (SPM). The official poverty methodology defines poverty by comparing a family’s pre-tax money income against a poverty threshold that was defined in the 1960s and adjusted for annual changes in cost of living. Meanwhile, the SPM expands the definition of resources to include non-cash benefits and tax credits received while deducting necessary expenses. These resources are compared to a poverty threshold that is based on recent food, clothing, shelter, and utility expenditures and is adjusted for housing tenure and for changes in cost of living throughout the United States. Taken together, the two poverty measures present slightly different pictures of economic well-being in the United States. On one hand, the official poverty measure is a measure of absolute poverty and provides a historical look at economic well-being based on cash earnings and government assistance. On the other, the SPM is a quasi-relative measure of poverty that shows how a wider swath of government assistance compares to a threshold that reflects the expenditures of families in the United States.
Both poverty measures have come under various criticisms based on their definition of resources a family has and how the thresholds are defined and adjusted over time. This paper serves to address some of these criticisms by reporting multiple historical series of income and poverty statistics using alternative definitions for each of these characteristics. For resources, we will estimate and compare three different measures: market income (defined as earnings from labor market activities), the Census definition of money income which includes earnings and government cash assistance programs (like Social Security), and disposable income (defined as money income, plus income from in-kind transfer programs, minus taxes and other required payments). We will then study two poverty threshold definitions: an anchored poverty threshold that is adjusted over time for inflation and a relative threshold that is based upon a multiple (such as 50%) of median income.
The first stage of the project will use data from the Current Population Survey Annual Social and Economic Supplement (CPS ASEC) to create a series of estimates from 2004 to 2024. The second stage of the project will expand this historical series back to 1980. Poverty rates will be anchored at various years across this time period to examine how the decision of what year to anchor estimates affects interpretation of poverty trends. We will also discuss other measurement issues including the choice of indices to adjust for inflation and equivalence scales to adjust for household size and composition.
This work is consistent with recommendations from a recent National Academies’ report on improving estimates of income, consumption, and wealth in the United States (CNSTAT 2024) as it will provide supplementary estimates of post-tax and transfer income to currently produced statistics. Furthermore, the estimates will also highlight the importance of methodological decisions when interpreting different measures of trends in economic well-being over time.