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Measuring Poverty: A New Approach
state or federal AFDC benefit standards. However, many factors properly enter into a determination of program benefit levels, and the result may well be standards that differ from those that make sense for a statistical measure of poverty. Such factors include constraints on available funding, the desire to target benefits to particular population groups, interactions among programs, and the desire to provide incentives to participants and potential participants, such as incentives to prefer work over welfare. Ultimately, the determination of appropriate assistance program benefit standards involves political judgements about the appropriate balance of competing program objectives within the constraints of scarce resources. We hope, by reviewing the issues, to help clarify the policy debate.
RECOMMENDATION7.1. Agencies responsible for federal assistance programs that use the poverty guidelines derived from the official poverty thresholds (or a multiple) to determine eligibility for benefits and services should consider the use of the panel's proposed measure. In their assessment, agencies should determine whether it may be necessary to modify the measure—for example, through a simpler definition of family resources or by linking eligibility less closely to the poverty thresholds because of possible budgetary constraints—to better serve program objectives.
RECOMMENDATION8.1. The states should consider linking their need standard for the Aid to Families with Dependent Children program to the panel's proposed poverty measure and whether it may be necessary to modify this measure to better serve program objectives.