Appendix B

Estimates of Eligible Students Using the American Community Survey

In developing an approach to direct estimation,1 the panel’s first task was to determine how data collected in the American Community Survey (ACS) can be used to reflect the eligibility criteria of the school meals programs. This task has several different aspects: (1) how to use ACS variables to identify public school students, (2) how to define an economic unit’s income for purposes of evaluating a student’s eligibility for school meals, (3) how to group individuals in households to define a student’s economic unit for school meals eligibility, and (4) how to account for categorical eligibility using ACS variables. This appendix addresses issues associated with using the ACS to estimate the eligibility of students who live in households, the bulk of all public school students. As described in Chapter 3, the panel decided not to use the ACS to estimate the eligibility of students who live in group quarters. Instead estimates for these students will be provided by school districts. Another issue, discussed in Chapter 3, is how to use school-year eligibility guidelines with the calendar year ACS estimates.

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1 By “direct” we mean an estimator that—when one is deriving estimates for a domain— uses data only from that domain, where a domain is defined by geographic area, population group, and time period. Although an American Community Survey (ACS) 5-year period estimate is, arguably, indirect by this definition, we consider it to be direct for present purposes.



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Appendix B Estimates of Eligible Students Using the American Community Survey I n developing an approach to direct estimation,1 the panel's first task was to determine how data collected in the American Community Survey (ACS) can be used to reflect the eligibility criteria of the school meals programs. This task has several different aspects: (1) how to use ACS variables to identify public school students, (2) how to define an eco- nomic unit's income for purposes of evaluating a student's eligibility for school meals, (3) how to group individuals in households to define a stu- dent's economic unit for school meals eligibility, and (4) how to account for categorical eligibility using ACS variables. This appendix addresses issues associated with using the ACS to estimate the eligibility of stu- dents who live in households, the bulk of all public school students. As described in Chapter 3, the panel decided not to use the ACS to estimate the eligibility of students who live in group quarters. Instead estimates for these students will be provided by school districts. Another issue, discussed in Chapter 3, is how to use school-year eligibility guidelines with the calendar year ACS estimates. 1By "direct" we mean an estimator that--when one is deriving estimates for a domain-- uses data only from that domain, where a domain is defined by geographic area, population group, and time period. Although an American Community Survey (ACS) 5-year period estimate is, arguably, indirect by this definition, we consider it to be direct for present purposes. 235

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236 USING ACS DATA TO EXPAND ACCESS TO THE SCHOOL MEALS PROGRAMS IDENTIFYING PUBLIC SCHOOL STUDENTS The ACS collects information about school attendance: whether the student has been attending school within the last 3 months, whether the school is public or private, and the grade attended. The ACS also collects information about each person's age. Hence for a given geographic area, it is possible to obtain estimates for students who live in that area, attend public school, and are in approximately the appropriate grade range. In defining public school students, the panel adapted the definitions used by the Census Bureau to support the research efforts of the National Center for Education Statistics (NCES). Namely, a "student" is a person with the following responses2 to the ACS questions shown in Boxes B-1, B-2, and B-33: yes, attended public school or public college at some time during the past 3 months, highest degree or level of school completed reported as "No schooling" or "Nursery or preschool through 12 grades," and age reported to be less than 20 years old.4 DEFINING INCOME According to the Eligibility Manual for School Meals, U.S. Department of Agriculture/Food and Nutrition Service (2011:40) households must report current income on a free and reduced price ap- plication. Current income means income received by the household for the current month, the amount projected for the first month for which the application is filled out, or for the month prior to application. If this income is higher or lower than usual and does not fairly represent the 2ACS data for all individuals in a household are typically provided by one person in the household. 3Because the ACS identifies students based on their having attended school during the last 3 months rather than based on current attendance, there is a possibility that students in split families with joint custody may be living in a different household at the time of the ACS interview than they were when attending school. To the extent that children live with different parents at different times, this might cause ACS estimates to make use of the wrong household's income. 4NCES's definition of public school student is as described above except that NCES applies the test in the second bullet--high school diploma or GED not reported--only to students aged 18 or 19. Hence the NCES definition includes individuals aged 0-17 who reported that they have received a high school degree and also that they attended a public school in the last 3 months. The panel's definition excludes these individuals. According to the ACS Public Use Microdata Sample (PUMS) files for 2008, there were 245,609 students below age 18 with high school degrees or about .5% of the total number of students in 2008.

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APPENDIX B 237 BOX B-1 ACS Questions on Schooling 10 a. At any time IN THE LAST 3 MONTHS, has this person attended school or college? Include only nursery or preschool, kindergarten, elementary school, home school, and schooling which leads to a high school diploma or a college degree. No, has not attended in the last 3 months SKIP to question 11 Yes, public school, public college Yes, private school, private college, home school b. What grade or level was this person attending? Mark (X) ONE box. Nursery school, preschool Kindergarten Grade 1 through 12--Specify grade 112 College undergraduate years (freshman to senior) Graduate or professional school beyond a bachelor's degree (for example: MA or PhD program, or medical or law school) SOURCE: See http://www.census.gov/acs/www/Downloads/questionnaires/2009/ Quest09/pdf. household's actual circumstances, the household may, in conjunction with LEA officials, project its annual rate of income based on the guide- lines given on special situations. In the same document, FNS provides the more detailed definition of income shown in Box B-4. The ACS collects data on the gross money income for household members aged 15 and older, so an economic unit's income can be com- pared with 130 percent and 185 percent of the applicable poverty guide- line to determine the economic unit's income eligibility status. In par- ticular, the ACS collects the income categories shown in Box B-5 for each person 15 years of age and older. The school meals and ACS income definitions appear to be very close, both specifically mentioning most of the same sources of income. There are a few minor differences. For example: strike benefits and workers compensation are not specifically mentioned in ACS questions, although they could be included under "any other sources of income"; railroad retirement is not specifically mentioned in the school meals definition,

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238 USING ACS DATA TO EXPAND ACCESS TO THE SCHOOL MEALS PROGRAMS BOX B-2 ACS Questions on Achievement 11. What is the highest degree or level of school this person has COM PLETED? Mark (X) ONE box. If currently enrolled, mark the previous grade or highest degree received. NO SCHOOLING COMPLETED No schooling completed NURSERY OR PRESCHOOL THROUGH GRADE 12 Nursery school Kindergarten Grade 1 through 11--Specify grade 111 12th gradeNO DIPLOMA HIGH SCHOOL GRADUATE Regular high school diploma GED or alternative credential COLLEGE OR SOME COLLEGE Some college credit, but less than 1 year of college credit 1 or more years of college credit, no degree Associate's degree (for example: AA, AS) Bachelor's degree (for example: BA, BS) AFTER BACHELOR'S DEGREE Master's degree (for example: MA, MS, MEng, MEd, MSW, MBA) Professional degree beyond a bachelor's degree (for example: MD, DDS, DVM, LLB, JD) Doctorate degree (for example: PhD, EdD) SOURCE: See http:/www.census.gov/acs/www/downloads/questionnaires/2009/ Quest09.pdf. but is most likely reported under "retirement income"; annuities are not specifically mentioned in ACS questions, although they are likely to be included under "retirement, survivor, or disability pensions"; investment income is not specifically mentioned in ACS questions, although it could be included under income question items "interest, dividends, etc." or "any other sources of income"; any other money that may be available to pay for children's meals and regular contributions from persons not living in house-

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APPENDIX B 239 BOX B-3 ACS Question on Age 4. What is this person's age and what is this person's date of birth? Please report babies as age 0 when the child is less than 1 year old. Print numbers in boxes. Age (in years) Month Day Year of birth SOURCE: See http:/www.census.gov/acs/www/Downloads/questionnaires/2009/ Quest09/pdf. hold are not specifically mentioned in ACS questions, although they could be included under "any other sources of income"; and cash withdrawn from savings is not specifically mentioned in ACS questions and is not tradition- ally considered to be "income." The panel concluded that the ACS and school meals definitions of income are sufficiently close that the ACS income definition is suitable for estimating income eligibility for the school meals programs. Nonetheless, it is important to understand the time periods to which ACS income data pertain. The income data collected during an ACS calendar year reflect income received over 2 calendar years. For each person aged 15 and older, the ACS asks the amount of income received in the last 12 months. Con- sequently, an interview in January 2008 obtains income data for Janu- ary 2007 through December 2007, while an interview in December 2008 obtains income for December 2007 through November 2008. The Census Bureau adjusts the income responses using a Consumer Price Index (CPI) price adjustment to reflect differences in consumer prices between the 12- month period covered by the income questions and the calendar year of the interviews.5 The resulting annual income measure appears to be com- 5The following is the Census Bureau's description of its adjustments to income: Adjusting Income for Inflation--Income components were reported for the 12 months preced- ing the interview month. Monthly Consumer Price Indices (CPI) factors were used to inflation- adjust these components to a reference calendar year (January through December). For exam ple, a household interviewed in March 2008 reports their income for March 2007 through February 2008. Their income is adjusted to the 2008 reference calendar year by multiplying their reported income by 2008 average annual CPI (January-December 2008) and then dividing by the average CPI for March 2007-February 2008. In order to inflate income amounts from previous years, the

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240 USING ACS DATA TO EXPAND ACCESS TO THE SCHOOL MEALS PROGRAMS BOX B-4 Income as Defined by FNS "Eligibility Manual for School Meals" Income is any money received on a recurring basis, including gross earned in- come, unless specifically excluded by statute. Gross earned income means all money earned before such deductions as income taxes, employee's social security taxes, insurance premiums, and bonds. Income includes but is not limited to: Earnings from work -- Wages, salaries, tips, commissions -- Net income from self-employed business and farms -- Strike benefits, unemployment compensation, and workers compensation Welfare/child support/alimony -- Public assistance payments/welfare payments (TANF, General Assistance, General Relief, etc.) -- Alimony or child support payments Retirement/disability payments -- Pensions, retirement income, veteran's benefits -- Social security -- Supplemental security income -- Disability benefits Any other income -- Net rental income, annuities, net royalties -- Interest; dividend income -- Cash withdrawn from savings; income from estates, trusts, and/or invest- ments -- Regular contributions from persons not living in the household -- Any other money that may be available to pay for the child(ren)'s meals. SOURCE: U.S. Department of Agriculture/Food and Nutrition Service (2011b:39). parable to the Current Population Survey measure (income for the prior calendar year) that is used to determine official poverty rates (Czajka dollar values on individual records are inflated to the latest year's dollar values by multiplying by a factor equal to the average annual CPI-U-RS factor for the current year, divided by the average annual CPI-U-RS factor for the earlier/earliest year. See http://www.census.gov/acs/www/Downloads/2008/usedata/2008%20ACS%20 Subject%20Definitions.pdf; http://www.census.gov/hhes/www/poverty/altpovest03/ cpi_u_cpi_u_rs.html; and http://www.bls.gov/cpi/cpirsdc.htm.

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APPENDIX B 241 and Denmead, 2008). However, because the incomes collected in the ACS reflect an average of incomes received over a 2-year period, estimates from the ACS will not be as responsive to changes in economic conditions as estimates from surveys whose time frame covers a single calendar year, such as the Current Population Survey. The panel was charged with using the ACS to measure eligibility for school meals for schools, groups of schools, and school districts. For small geographic areas the only avail- able estimates will be from the 5-year ACS. Combining the data from multiple ACS years will further smooth the income data. Consequently, when economic conditions are deteriorating, any ACS estimate will likely understate eligibility, while in periods of recovery, any ACS estimate will likely overstate eligibility. This will be more even pronounced for the 3-year and 5-year ACS estimates than for the 1-year ACS estimates. In the school meals programs, the income information currently used to determine eligibility is reported on applications submitted to school districts. The prototype form provided on the FNS website6 gives the following instructions: "For each household member, list each type of income received for the month. You must tell us how often the money is received--weekly, every other week, twice a month, or monthly. For earn- ings, be sure to list the gross income, not the take-home pay. Gross income is the amount earned before taxes and other deductions." While FNS guidelines provide flexibility in reporting of income, the data received tend to represent monthly (or more frequent), rather than annual income.7 Using annual income from the ACS to determine eligibility averages over monthly income fluctuations is likely to indicate as ineligible some students who would be eligible for free or reduced-price meals based on monthly income values (U.S. Census Bureau, 1998). The cumulative nature of eligibility for the school meals programs contributes to the understatement of eligibility if annual income is used. Once a student has been determined to be eligible in a month, the eligibility determination remains in force for the rest of the school year and for the first month of the following school year, when another eligibility determination is made. Further, if its financial situation changes a household can apply for benefits at any time. The issue of monthly versus annual income is an important one and is addressed in Appendix G. 6The prototype application form is available at http://www.fns.usda.gov/cnd/FRP/frp. process.htm. 7Even though FNS Headquarters has no data on this, one knowledgeable person in the agency stated that "having reviewed roughly 2,500 applications in each of the past 5 years, I would say that for the most part, households are providing income data on a weekly basis, biweekly basis, or bimonthly basis. There are some school districts that require the house- holds to provide monthly household income data on the applications. Very few applications provide annual data (farming households in the Midwest, etc.)."

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242 USING ACS DATA TO EXPAND ACCESS TO THE SCHOOL MEALS PROGRAMS BOX B-5 ACS Questions About Income 47. INCOME IN THE PAST 12 MONTHS Mark (X) the "Yes" box for each type of income this person received, and give your best estimate of the TOTAL AMOUNT during the PAST 12 MONTHS. (NOTE: The "past 12 months" is the period from today's date one year ago up through today.) Mark (X) the "No" box to show types of income NOT received. If net income was a loss, mark the "Loss" box to the right of the dollar amount. For income received jointly, report the appropriate share for each person, or if that's not possible, report the whole amount for only one person and mark the "No" box for the other person. a. Wages, salary, commissions, bonuses, or tips from all jobs. Report amount before deductions for taxes, bonds, dues, or other items. Yes No $ . 00 TOTAL AMOUNT for past 12 months b. Self-employment income from own nonfarm businesses or farm busi- nesses, including proprietorships and partnerships. Report NET income after business expenses. Yes No $ . 00 Loss TOTAL AMOUNT for past 12 months c. Interest, dividends, net rental income, royalty income, or income from estates and trusts. Report even small amounts credited to an account. Yes No $ . 00 Loss TOTAL AMOUNT for past 12 months

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APPENDIX B 243 d. Social Security or Railroad Retirement. Yes No $ . 00 TOTAL AMOUNT for past 12 months e. Supplemental Security Income (SSI). Yes No $ . 00 TOTAL AMOUNT for past 12 months f. Any public assistance or welfare payments from the state or local welfare office. Yes No $ . 00 TOTAL AMOUNT for past 12 months g. Retirement, survivor, or disability pensions. Do NOT include Social Security. Yes No $ . 00 TOTAL AMOUNT for past 12 months h. Any other sources of income received regularly such as Veterans' (VA) payments, unemployment compensation, child support, or alimony. Do NOT include lump sum payments such as money from an inheritance or the sale of a home. Yes No $ . 00 TOTAL AMOUNT for past 12 months 48. What was this person's total income during the PAST 12 MONTHS? Add entries in questions 47a to 47h; subtract any losses. If net income was a loss, enter the amount and mark (X) the "Loss" box next to the dollar amount. None OR $ . 00 Loss TOTAL AMOUNT for past 12 months SOURCE: See http://www.cencus.gov/acs/www/Downloads/questionnaires/2009/ questr09.pdf.

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244 USING ACS DATA TO EXPAND ACCESS TO THE SCHOOL MEALS PROGRAMS DEFINING ECONOMIC UNITS Household composition for the purpose of making an eligibility de- termination for free and reduced priced benefits is based on economic units. An economic unit is a group of related or unrelated individuals who are not residents of an institution or boarding house but who are living as one economic unit, and who share housing and/or significant income and expenses of its members. Generally, individuals residing in the same house are an economic unit. However, more than one economic unit may reside together in the same house. Separate economic units in the same house are characterized by prorating expenses and economic independence from each other.8 A broader--and apparently inconsistent--definition of the economic unit comes from FNS guidance9 to local school meals programs regarding the development of their application materials. Item #11 of the generic "Letter to Households" says: "Who should I include as members of my household?" The answer is: "You must include all people living in your household, related or not (such as grandparents, other relatives, or friends). You must include yourself and all children living with you." Applicants are later instructed to list all household members and each type of income for each household member. This definition of the eco- nomic unit does not explicitly raise the possibility of multiple units living within the household and is consistent with the Census Bureau's defini- tion of households--all persons living in the same residence. While the application instructions do not mention "economic units," knowledgeable individuals who attended panel meetings noted that if applicants for the school meals programs believe there are multiple eco- nomic units in their household, they can make that argument with local school meals officials.10 Some panel members wondered whether such beliefs might be reflected on the submitted applications, with some fami- lies not including the income of persons who live in the same housing unit but whom they consider not to be part of their household. If an excluded person has more income than the decrement to the poverty guideline, excluding that person from the economic unit increases the 8Eligibility Manual for School Meals, U.S. Department of Agriculture/Food and Nutrition Service (2011:37). 9See http://www.fns.usda.gov/cnd/frp/2010_application.doc. 10Taeuber and colleagues (2004) report on a match study of 2001 American Community Survey/Supplemental Survey (ACS/SS01) respondents and others in their households to individual administrative Supplemental Nutrition Assistance Program (SNAP) records from the state of Maryland. Eight percent of the difference between the ACS estimate and state data was due to multiple SNAP assistance units residing in the same ACS household. This is evidence that an ACS household sometimes contains multiple economic units according to SNAP definitions.

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APPENDIX B 245 likelihood that the economic unit will be determined eligible for free or reduced-price meals. The difference between the two FNS definitions of household led to considerable discussion among panel members. Should the panel attempt to evaluate eligibility based on an "economic unit," as defined in the Eligibility Manual for School Meals, U.S. Department of Agriculture/Food and Nutrition Service (2011:37) or should we use the broader household definition embedded in the application instructions? The panel concluded that we should do our best to evaluate eligibility based on an economic unit. For purposes of determining which persons in the household are shar- ing resources and which are economically independent of other household members, the most relevant information available from the ACS consists of the answers to the questions: "How many people are living or staying at this address?" and "How is each person related to Person 1?"11 Box B-6 presents the ACS question on relationship and its possible responses. Pos- sible responses for related individuals include husband or wife, biologi- cal son or daughter, adopted son or daughter, stepson or stepdaughter, brother or sister, father or mother, grandchild, parent-in-law, son-in-law or daughter-in law, and other relative. Possible responses for unrelated indi- viduals include roomer or boarder, housemate or roommate, unmarried partner, foster child, and other nonrelative. The Census Bureau defines all related individuals as a family, and all persons who live in the housing unit as a household.12 "Person 1" is typically referred to as the "householder." The ACS does not collect information on sharing of resources and expenses that can be used to distinguish separate economic units within a household. While being related to the householder does not necessar- ily imply a sharing of economic resources, the panel chose to make this inference as a first step. Consequently, all persons who were related to the householder (members of the family) were assumed to be members of the same economic unit. The remaining question for the panel was whether to assign unrelated individuals, particularly unmarried partners of the householder and unrelated children, to this economic unit or to other economic units within the household. 11ACS instructions define "Person 1" to be the person living or staying in the house or apartment in whose name the house or apartment is owned, being bought, or rented. If there is no such person, the person filling out the form is instructed to start with the name of any adult living or staying in the house or apartment. 12The panel uses the Census Bureau's definitions of family and household because we are using ACS data. However, the Census Bureau's definitions are not uniformly adopted. For example, according to the Code of Federal Regulations for Agriculture, 7 CFR 245.2: "245.2(b) Family means a group of related or nonrelated individuals, who are not residents of an institution or boarding house, but who are living as an economic unit"; and "245.2(d) Household means family as defined in 245.2(b)."

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APPENDIX B 253 TABLE B-6 Income Eligibility Distribution of Public School Students in the United States: Groups of Students and Economic Units Percentage of Students Eligible by Category and Relationship Number of Students EU1 EU2 EU3 EU4 EU5 by Relationship Category (%) (%) (%) (%) (%) Unrelated Free 100.0 85.2 42.6 24.7 18.4 687,743 Reduced price 0.0 5.7 8.9 12.5 12.9 Full price 0.0 9.1 48.5 62.8 68.7 Related Free 22.9 22.9 22.9 22.9 22.6 47,714,172 Reduced price 11.7 11.7 11.7 11.7 11.7 Full price 65.4 65.4 65.4 65.4 65.7 Related, Unrelated, and Free 24.2 24.0 23.4 23.2 22.8 Foster Reduced price 11.5 11.6 11.6 11.7 11.7 48,568,936 Full price 64.3 64.4 65.0 65.1 65.6 NOTE: Group quarters students not included. SOURCE: Prepared by the panel using 2008 ACS Public Use Microdata Sample (PUMS) data. participates in certain means-tested public assistance programs targeting the low-income population. Specifically, students are categorically eli- gible for free meals if their families receive assistance from SNAP, TANF, or FDPIR. A student also is categorically eligible if a family member is enrolled in a Head Start or Even Start Program (based on meeting that program's low-income criteria) or the student is (1) a homeless child as determined by the school district's homeless liaison or by the director of a homeless shelter, (2) a migrant child as determined by the state or local Migrant Education Program coordinator, or (3) a runaway child who is receiving assistance from a program under the Runaway and Homeless Youth Act and is identified by the local education liaison.17 These defini- tions include students who live in households and students who may not live in typical housing units (migrant, runaway, and homeless children). For children in households, the ACS collects information about the receipt of SNAP benefits and the receipt of public assistance income. For SNAP, the respondent reports whether any person in the household receives benefits. Public assistance income data are collected as item 47f in the income questions completed for each person in the household aged 15 and older. Specifically, the respondent is asked to report "the amount of 17Eligibility Manual for School Meals, U.S. Department of Agriculture/Food and Nutrition Service (2011:48).

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254 USING ACS DATA TO EXPAND ACCESS TO THE SCHOOL MEALS PROGRAMS any public assistance or welfare payments from the state or local welfare office." Although such an amount might include cash assistance from TANF, which confers eligibility, it might also include payments from pro- grams that do not confer eligibility. The ACS questions about benefit receipt are shown in Box B-8. While the ACS cannot be used to identify all types of categorical eli- gibility, it can be used to identify the ones that affect the greatest number of children: SNAP and TANF. One challenge in using the ACS data on benefit receipt to measure categorical eligibility, however, is reporting error that tends to understate benefit receipt.18 A match study of ACS with administrative data from Maryland's Client Automated Resource and Eligibility System, the administrative record system for the state of Maryland, showed that many ACS respondents do not report the benefits that they actually receive.19 ACS data can be used to identify (at least some) students who are categorically eligible for school meals because someone in the house- hold receives SNAP benefits, or if someone in the economic unit receives public assistance income. While the latter might include income from programs that do not provide categorical eligibility (hence over-counting eligibility), TANF, too, suffers from underreporting of benefits on the ACS.20 Meyer, Mok, and Sullivan (2009) showed that in 2004, the most recent year for which they had data, administrative TANF dollar amounts 18Czajka and Denmead (2008:170) report, "As a rule surveys underreport numbers of participants in means tested programs, so in comparing estimates of participation across surveys, more is generally better." Of the surveys they examined, the Survey of Income and Program Participation (SIPP) has the highest number, 31.4 million people (or 11.2 percent of the population), in families receiving welfare or food stamps at any time during 2002. The ACS is second with 24.5 million people or 8.8 percent of the population. 19Taeuber and colleagues (2004) report that the published (weighted) ACS/SS01 esti- mate for number of households receiving SNAP benefits was 87,429 in 2000/2001, while state records showed a total of 157,857 households receiving SNAP benefits. This study matched ACS respondents and others in their household with individual administrative SNAP records from Maryland. A careful study of the discrepancy showed that 68 percent was due to underreporting of SNAP benefits on ACS from individuals who were receiving such benefits, 6 percent was due to individuals living in group quarters (not covered by ACS at the time), 8 percent was due to multiple SNAP assistance units residing in the same household, and 15 percent was due to households reporting SNAP benefits when they were not on SNAP rolls in Maryland. An earlier study by Taeuber, Staveley, and Larson (2003) showed that the underreporting was greater for households that did not have children than for households with children. 20Lynch and colleagues (2007) matched individual ACS and TANF records for the state of Maryland. Of the 95 households in the match, 43 said "yes" to receiving public assistance and 52 said "no." This study established that 42 of the 52 households that said "no" were actually on TANF according to Maryland and failed to report those benefits on the ACS. One reason for underreporting of TANF benefits for children is that the ACS does not collect income data for children under age 15.

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APPENDIX B 255 BOX B-8 ACS Questions Related to Categorical Eligibility 12. IN THE PAST 12 MONTHS, did anyone in this household receive Food Stamps or a Food Stamp benefit card? Yes No 47.f. Any public assistance or welfare payments from the state or local wel- fare office. Yes No $ . 00 TOTAL AMOUNT for past 12 months SOURCE: See http:/www.census.gov/acs/www/Downloads/questionnaires/2009/ Quest09.pdf. exceeded ACS reports of receipt of public assistance by 15.6 percent of total TANF receipts even though the ACS estimate includes income from other sources of public assistance. The panel compared ACS estimates of eligibility using definitions EU4 and EU5, to evaluate the contribution of SNAP benefits and public assistance income to the percentages of children eligible for school meals. For both EU4 and EU5, Table B-7 shows eligibility percentages under four different alternatives: (1) income eligibility only, (2) income eligibility plus categorical eligibility for free meals based on receipt of SNAP benefits by anyone in the household, (3) income eligibility plus categorical eligibility for free meals based on receipt of public assistance income by anyone in the household, and (4) income eligibility plus categorical eligibility for free meals based on receipt of SNAP benefits or public assistance income by anyone in the household. Consideration of SNAP benefits increases the percentage eligible for free meals by more than 5 percentage points under both EU4 and EU5, and accounting for both SNAP benefits and public assistance income increases the percentage eligible for free meals by about 6 percentage points. Based on our review of the eligibility rules and these findings, the panel concludes that the ACS data on SNAP benefits and public assis- tance income should be used in deriving estimates of eligibility because

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256 USING ACS DATA TO EXPAND ACCESS TO THE SCHOOL MEALS PROGRAMS TABLE B-7 Percentage of Students in the United States Eligible for School Meals Under Definitions EU4 and EU5 Percentage of Students Eligible by Category Income Income Income Eligibility Eligibility Plus Eligibility Plus Categorical Plus Categorical Eligibility Categorical Eligibility Based on Eligibility Based on SNAP Benefits Income Based on Public or Public Eligibility SNAP Assistance Assistance Category Only Benefits Income Income EU4 Free 23.2 28.4 24.8 29.1 Reduced price 11.7 9.3 11.1 9.2 Full price 65.1 62.2 64.1 61.8 EU5 Free 22.8 28.2 24.5 28.8 Reduced price 11.7 9.3 11.0 9.1 Full price 65.6 62.5 64.5 62.1 NOTES: Includes related, unrelated, and foster children; excludes group quarters children. SNAP = Supplemental Nutrition Assistance Program (formerly the Food Stamp Program). SOURCE: Prepared by the panel using 2008 ACS Public Use Microdata Sample (PUMS) data. these variables appear to identify students who are not eligible based on ACS income alone. Although considering children in households receiv- ing SNAP benefits and public assistance income to be eligible for free meals resulted in levels of free eligibility closer to national estimates from administrative data, the panel's primary remaining concern with this approach is that documented underreporting of SNAP benefits and pub- lic assistance income in the ACS is likely to result in an understatement of eligibility. The issue of underreporting of SNAP benefits and public assistance income in ACS is an important one and is addressed further in Appendix G. MULTIPLE ECONOMIC UNITS AMONG RELATED INDIVIDUALS To the extent that subfamilies (that are related to the householder) might have been considered separate economic units when they applied for school meals, pooling all related individuals into an economic unit could result in subfamily member children being less likely to be con- sidered income eligible for school meals. The Census Bureau uses rela-

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APPENDIX B 257 tionship data to define subfamilies in its ACS PUMS files.21 The panel conducted a sensitivity analysis on the impact of subfamilies on eligibility for school meals. For households with subfamilies, a subfamily with chil- dren was considered a separate economic unit (although if the household was reported as participating in SNAP, the child was still considered to be categorically eligible). At the national level, the percentage eligible for free meals increased by 1.6 percentage points, all coming from the full- price category. The challenge is that in this analysis all subfamilies were considered to be separate economic units. It is more likely that only some subfamilies are actually independent economic units, and the ACS pro- vides no information on when individuals share resources. STATE AND DISTRICT ANALYSIS The panel noted that at a more local level, it might be possible for the choice of approach to have a greater impact, especially in areas where the proportion of students unrelated to the householder is higher than the national proportion. Accordingly, this section examines findings at two different geographic levels--the state and the school district. The 2008 PUMS data were used for all calculations. We examined the 115 school districts whose attendance boundaries align with the boundaries of one or more Public Use Microdata Areas (PUMAs).22 Impact of Alternative Definitions of the Economic Unit Figures B-1 and B-2 plot the percentage of students eligible for free and reduced-price meals by the five alternative definitions of the eco- nomic unit for states and school districts, respectively. Each state or school district is represented by a connected line whose height at each of the five definitions (on the horizontal axis) represents the percentage of students eligible for free or reduced-price meals under that definition. A perfectly horizontal line represents the case in which the economic unit definition 21According to ACS PUMS definitions, "A subfamily is a married couple (husband and wife) interviewed as members of the same household with or without never-married chil- dren under 18 years of age, or one parent with one or more never married children under 18 years old. A subfamily does not maintain its own household, but lives in a household where the householder or householder's spouse is a relative." Subfamilies are defined during the processing of data. Not all analysts believe that the methods used by the Census Bureau are the best possible, but they provided a target of opportunity for this analysis. See Ruggles and Brower (2003) and Schroeder (2010). 22The panel was restricted to considering state and selected school districts because of the geographic information available on the public use ACS PUMS file. Hence this is not a complete analysis of the local impact on eligibility of economic unit definition.

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258 USING ACS DATA TO EXPAND ACCESS TO THE SCHOOL MEALS PROGRAMS Percentage Eligible for Free and Reduced-Price Meals 60 50 40 30 20 1 2 3 4 5 Economic Unit Definition: EU1-EU5 FIGURE B-1 Impact of alternative economic unit definitions by state. SOURCE: Prepared by the panel. FIGB-1.eps Percentage Eligible for Free and Reduced-Price Meals 80 60 40 20 0 1 2 3 4 5 Economic Unit Definition: EU1-EU5 FIGURE B-2 Impact of alternative economic unit definitions by school district. SOURCE: Prepared by the panel.FIGB-2.eps

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APPENDIX B 259 has no effect on the percentage eligible. While the lines are not perfectly horizontal, they do indicate that for these more local levels the economic unit definition has little effect on the percentage of students eligible for free or reduced-price meals. The Impact of Allowing More Than One Economic Unit in the Household The difference between the fourth and fifth definition of the eco- nomic unit reflects the assumption of allowing the household (less foster children) to reflect the presence of a second economic unit among unre- lated individuals: EU5 defines the economic unit as the whole household, while EU4 allows for the possibility of two economic units (the family and unrelated individuals). Typically one would expect that allowing for multiple units would increase the number of students eligible for free or reduced-price meals. This effect was found when ACS estimates were analyzed at the national level, and we repeated the calculations at the state level and for the 115 school districts whose boundaries aligned with PUMAs. Figure B-3 provides box plots for the distribution of the differ- 0 .5 1 Percentage Point Difference in Free and Reduced-Price Eligibility EU4-EU5 without cat. elig. EU4-EU5 with cat. elig. FIGURE B-3 Impact of alternative economic unit definitions on state-level eligi- bility (EU4-EU5) without and with categorical eligibility. SOURCE: Prepared by the panel.FIGB-3.eps

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260 USING ACS DATA TO EXPAND ACCESS TO THE SCHOOL MEALS PROGRAMS ence between the EU4 and EU5 free and reduced-price eligibility rates at the state level, both with and without accounting for categorical eligibility. Figure B-3 shows that the difference is not always positive. In one state allowing for multiple economic units within the household lowered the eligibility rate. In all other instances, however, allowing for multiple economic units in the household increased the eligibility rate, but not by large amounts. The median increase was less than .4 percentage points without accounting for categorical eligibility and was even smaller after accounting for categorical eligibility. The increase was always less than 1 percentage point. Figure B-4 displays the difference between EU4 and EU5 eligibility rates with and without categorical eligibility at the school district level. Again the difference is not always positive. However, allowing for mul- tiple economic units tends to increase eligibility for free and reduced-price meals. These increases tend to be small, although in a few districts, they are more than 2 percentage points. Accounting for categorical eligibility reduces the difference in eligibility rates between EU4 and EU5. The sensitivity analysis of multiple economic units among related individuals (the subfamily analysis) revealed that at the state level on -1 0 1 2 3 Percentage Point Difference in Free and Reduced-Price Eligibility EU4-EU5 without cat. elig. EU4-EU5 with cat. elig. FIGURE B-4 Impact of alternative economic unit definitions on district-level eligibility (EU4-EU5) without and with categorical eligibility. SOURCE: Prepared by the panel. FIGB-4.eps

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APPENDIX B 261 average the percentage of public school students eligible for free meals increased by 1.6 percentage points if all census-identified subfamilies are counted as separate economic units. At the school district level, the percentage eligible for free meals increases an average of 1.5 percentage points.23 The ACS provides no information about what proportion of subfamilies are actually living as independent economic units within their households, and as a result, the above increases overstate the impact of accounting for subfamilies. These comparisons reassured the panel that using EU4 as the defini- tion of an economic unit for determining eligibility provides a balanced approach, and by itself would not make a large difference in eligibility. This approach avoids the assumption that there is only one economic unit in a household, which is important because evidence shows that a house- hold can have multiple economic units. However, the approach provides for at most one economic unit among unrelated individuals and does not provide for multiple economic units among related individuals. While these situations are likely to be rare, they would tend to increase eligibility (if it were possible to account for them accurately). STATE AND DISTRICT ANALYSIS OF CATEGORICAL ELIGIBILITY This section examines how accounting for categorical eligibility can increase the estimated rate of eligibility for free and reduced-price meals at the state and school district levels. For both the EU4 and EU5 defini- tions of an economic unit, Figures B-5 and B-6 depict the box plots for the distribution of differences between eligibility rates with and without accounting for categorical eligibility at the state and school district levels, respectively While the impact of accounting for categorical eligibility is always pos- itive, the impact is large for some states and school districts. The median impact at the state level is about 3.2 percentage points and for school districts is slightly higher at almost 4 percentage points. As expected, the variation in impacts is much higher at the school district level. 23In at least one example, eligibility went down because the student was in a subfamily, but the head of household had public assistance income that had qualified the student for categorical eligibility under EU4 or EU5.

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262 USING ACS DATA TO EXPAND ACCESS TO THE SCHOOL MEALS PROGRAMS 2 3 4 5 6 7 Percentage Point Difference in Free and Reduced-Price Eligibility EU4 with cat. elig-EU4 EU5 with cat. elig.-EU5 FIGURE B-5 Impact of categorical eligibility at the state level with EU4 and EU5 (EUX with categorical eligibility-EUX). FIGB-5.eps SOURCE: Prepared by the panel. 0 5 10 15 Percentage Point Difference in Free and Reduced-Price Eligibility EU4 with cat. elig-EU4 EU5 with cat. elig.-EU5 FIGURE B-6 Impact of accounting for categorical eligibility at the district level with EU4 and EU5 (EUX with categorical eligibility-EUX). SOURCE: Prepared by the panel. FIGB-6.eps

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APPENDIX B 263 CONCLUSIONS The panel concluded that the definition of an economic unit should allow for multiple units within a household, as provided in the Eligibility Manual for School Meals.24 This judgment eliminated EU5 as our preferred definition. We further concluded that ACS variables pertaining to SNAP participation and the receipt of public assistance income should be used to account for categorical eligibility for free meals. We also concluded that if a household has no unrelated adult besides an unmarried partner, a reasonable assumption is to assign unrelated children to the primary economic unit. This judgment eliminated EU1 and EU2 as our preferred definition, leaving only EU3 and EU4. The only difference between these two measures is the treatment of unrelated children when unrelated adults other than an unmarried partner are present in the household. To assume that none of these adults is economically related to the children (EU3) did not seem to be a reasonable assumption. Consequently, the panel concluded that of the alternative definitions examined, EU4 should be adopted for determining eligibility for school meals. The panel real- izes that this assignment rule is subject to potential errors. One type of error will occur when an unmarried partner and other unrelated adults are both present. EU4 will assign the unrelated children to the other unre- lated adults to form a secondary economic unit when they may really be children of the unmarried partner and should be assigned to the primary family. A second type of error is the aggregation of all unrelated adults and children into a single secondary economic unit when more than one secondary unit should be formed. A third type of error is considering all related individuals in a household as members of the same economic unit. It is possible, for example, that in some households, a family may live as a separate economic unit in the same household as one set of parents. 24U.S. Department of Agriculture/Food and Nutrition Service (2011:37).