between 32 and 35 percent for the average monthly AFDC payment for 1940-1990 and between 34 and 37 percent for the maximum benefit for a four-person family for 1960-1990. The coefficient of variation was smaller for the maximum combined AFDC and food stamp benefit, ranging between 16 and 21 percent for a four-person family for 1970-1990.

In looking at the relationship of the maximum AFDC benefit to the need standard in January 1994 (see Table 8-1), 11 states paid a maximum benefit that represented 100 percent of their need standard; 23 states paid between 50 and 99 percent of their need standard (the median state paid 66 percent of its need standard); and the remaining 17 states paid less than 50 percent of their need standard, including 6 states that paid less than 33 percent of their need standard.

In looking at the adequacy of AFDC need standards and benefits against the official poverty threshold, 8 states had need standards in January 1994 that were at or above the 1993 official average weighted poverty threshold for a family of three, and 12 states had need standards that were between 70 and 99 percent of the poverty level; see Table 8-3. The remainder had need standards that were below 70 percent of the poverty level. In no state did the maximum AFDC benefit exceed the poverty level, and in only two states did the maximum benefit exceed 70 percent of the poverty level. With the addition of food stamps, the maximum combined benefit exceeded the poverty level in 2 states and was between 70 and 99 percent of the poverty level in 22 states.

In looking at the disparities in AFDC need standards and benefit levels, one obvious question is whether they are related to differences in needs and costs of living across states. We constructed an index of the adjustments by state to a national poverty threshold that would result from taking account of differences in the cost of housing. We analyzed 1990 census data to determine cost-of-housing index values by state (relative to a national value of 1.00) and then adjusted each index value downwards by a factor reflecting the proportion that shelter costs (including utilities) represent of the proposed poverty thresholds. (The methodology was the same that we used to determine adjusted cost-of-housing index values by region and size of metropolitan area for the statistical poverty measure; see Chapter 3). We also constructed an index of state median family income from 1990 census tabulations (Bureau of the Census, no date(b)) relative to 1.00 for the average median family income across the states. Not surprisingly, the index of state-adjusted poverty thresholds shows less variation than does the index of median family income; see Table 8-4. The state-adjusted poverty threshold index values range from 24 percent above to 15 percent below the national average, with a coefficient of variation of 10 percent.17 The median family income index values range from

17  

The coefficient of variation of 10 percent for the state-adjusted poverty threshold index is similar to that of 8 percent for a state cost-of-living index developed by Peterson and Rom (1990: Table 1-2). Their index averaged cost-of-living indicators for 1985 developed by the American Chamber of Commerce Researchers Association for all the cities in each state, weighted by city population size.



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