Poverty Measurement: New Advances, Insights and Policy Implications

Session Submission Type: Panel

Abstract

Panel Abstract

Tim Smeeding, University of Wisconsin, Madison

 Session Organizer and Chair

As we enter a new era of federal policymaking under the current administration, charting changes in poverty, hardships, well-being, and policy impacts more generally is more important than ever. The administration has already cut LIHEAP and Head Start with more cuts coming, especially for SNAP and other food programs, and Medicaid. The looming 2025 federal income tax bill in response to the expiration of the 2017 TCJA, and changes in other tax based subsides like ACA enhancements, EITC and the CTC will all be decided soon.

The purpose of this panel is to develop tools to measure the impacts of these policy changes including the supply of housing, on poverty, inequality and human needs. 

The first paper simulates the impacts of proposed Federal tax and spending changes on poverty using a pilot version of the Principal Poverty Measure (PPM), a revision of the Supplemental Poverty Measure (SPM) recommended by a 2023 NASEM consensus study report. In so doing, the impacts of changes in health care coverage and health insurance, child care subsides and housing costs can all be simulated to derive the impacts on needs and hardships as well as the poverty count itself.

The second paper compares eight different poverty measures to seven measures of wellbeing and material hardship. Using data from the Panel Study of Income Dynamics (1984-2019) and other datasets, the paper compares the predictive ability of these measures in pairwise matchups, and finds that wealth poverty often outperforms income poverty measures in predicting wellbeing, suggesting the precautionary savings and self-insurance and private inter-family transfers will be important actors in preventing the worst consequences of policies that reduce income or raise cost to lower income households.

Paper three deploys federally restricted location data to generate novel estimates of the SPM using county-specific, hybrid, and commuting-zone geographic cost adjustments, these estimates demonstrate the utility of our preferred commuting-zone-level adjustment. These measures leverage the recent release of our state-level estimates from the FSRDC system to explore the potential drivers of state-level variation in outcomes, as well as the role of monetarily flat transfers across space (e.g. SNAP, EITC, and CTC) on the geographic variation in the SPM.

The final paper, investigates how housing policy and housing costs have affected poverty rates in California between 1980 and 2023, reports several important findings, and concludes that, in high-cost regions, increases in housing supply offer redistributive benefits comparable to major income support programs like SNAP, and should be understood as an important anti-poverty tool.

Policy Area

• Poverty and Income Policy

Secondary Policy Area

• Methods and Tools of Analysis

Chair

• Tim M. Smeeding

Discussants

• Christopher Wimer, Columbia University

• David Johnson, International Association for Research in Income and Wealth

Organizer

• Tim M. Smeeding

Individual Presentations

• Impacts on Poverty of Expected Federal FY26 Policy Changes: Results from the Principal Poverty Measure - Presenting Author: Sanders D. Korenman, Baruch College (City University of New York)

• Comparing Eight Approaches to Poverty Measurement in Terms of Their Relevance to Wellbeing & Material Hardship - Presenting Author: Kathryn Kay O'Neill, University of Pennsylvania

• The impact of precise geographic adjustments on the Supplemental Poverty Measure - Presenting Author: J. Tom Mueller, University of Kansas

• Housing Policy and Poverty - Presenting Author: Zachary Parolin, University of Oxford