Executive Summary

Estimates of numbers of school-age children in poverty are used by the U.S. Department of Education under Title I of the Elementary and Secondary Education Act to allocate federal funds to school districts for programs to aid disadvantaged children. Until now that allocation has been based on the numbers and percentages of school-age children in poverty by county from the most recent decennial census. In 1994 Congress authorized the Bureau of the Census to provide updated estimates of the numbers of school-age children in poverty, first for counties and subsequently for school districts. The use of these estimates for the Title I allocations is required unless the estimates are determined to be inappropriate or unreliable. Congress also authorized a study of the Census Bureau's program for producing these small-area poverty estimates. That study is being carried out by the Panel on Estimates of Poverty for Small Geographic Areas of the Committee on National Statistics. This is the panel's first report.

For the fiscal 1997 and 1998 allocations, the Census Bureau has developed county-level estimates of the numbers of children aged 5–17 in 1994 who were living in and related to a family in poverty in 1993. Its estimation procedure uses a statistical model that combines data from several sources, including the March Current Population Survey (CPS), food stamp program records, income tax return records, and county population estimates. The panel has assessed the Census Bureau's work in order to fulfill its mandate to advise the Secretaries of Commerce and Education on the advisability of using those estimates for the Title I allocations to counties for the 1997–1998 and 1998–1999 school years. The panel concludes that the Census Bureau's model-based estimates represent a significant step toward the provision of more up-to-date estimates of poverty for small geo-



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Small-Area Estimates of School-Age Children in Poverty: Interim Report I: Evaluation of 1993 County Estimates for Title I Allocations Executive Summary Estimates of numbers of school-age children in poverty are used by the U.S. Department of Education under Title I of the Elementary and Secondary Education Act to allocate federal funds to school districts for programs to aid disadvantaged children. Until now that allocation has been based on the numbers and percentages of school-age children in poverty by county from the most recent decennial census. In 1994 Congress authorized the Bureau of the Census to provide updated estimates of the numbers of school-age children in poverty, first for counties and subsequently for school districts. The use of these estimates for the Title I allocations is required unless the estimates are determined to be inappropriate or unreliable. Congress also authorized a study of the Census Bureau's program for producing these small-area poverty estimates. That study is being carried out by the Panel on Estimates of Poverty for Small Geographic Areas of the Committee on National Statistics. This is the panel's first report. For the fiscal 1997 and 1998 allocations, the Census Bureau has developed county-level estimates of the numbers of children aged 5–17 in 1994 who were living in and related to a family in poverty in 1993. Its estimation procedure uses a statistical model that combines data from several sources, including the March Current Population Survey (CPS), food stamp program records, income tax return records, and county population estimates. The panel has assessed the Census Bureau's work in order to fulfill its mandate to advise the Secretaries of Commerce and Education on the advisability of using those estimates for the Title I allocations to counties for the 1997–1998 and 1998–1999 school years. The panel concludes that the Census Bureau's model-based estimates represent a significant step toward the provision of more up-to-date estimates of poverty for small geo-

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Small-Area Estimates of School-Age Children in Poverty: Interim Report I: Evaluation of 1993 County Estimates for Title I Allocations graphic areas but that these estimates have not yet been sufficiently evaluated to serve as the sole basis for allocating funds under Title I. The panel strongly endorses a model-based approach for county-level estimates of school-age children in poverty and commends the Census Bureau for working to develop a specific model for this purpose. In comparison with the continued use of 1990 census estimates, the use of the Census Bureau's model-based estimates has a clear advantage of employing more up-to-date information. In selecting a model, however, it is important to question the assumptions it uses to see that they are reasonable, to examine predictions to see that they contain no identifiable systematic errors, and to compare the selected model to alternative models. The Census Bureau's model has not yet been sufficiently evaluated in these respects. Many aspects of the model's performance need to be more extensively tested before the panel can recommend basing the Title I allocations solely on estimates from it. Yet it is not desirable to continue to base Title I allocations solely on estimates of poverty in 1989 from the 1990 census data. Although those estimates have the advantage of being based on a much larger sample than the CPS data used in the model, they are missing the major changes in the distribution of poverty that occurred between 1989 and 1993. For the immediate purpose of Title I allocations, the panel has had to balance its concerns about using the Census Bureau's model-based estimates against its concerns about using estimates based on the 1990 census data. The panel concludes that a solution that takes advantage of the Census Bureau's work on model-based estimates but reduces the impact of possible limitations in those estimates is the most appropriate approach at this time. Therefore, the panel's recommendation uses estimates of the number of children aged 5–17 in families in poverty in each county from both the Census Bureau model and the 1990 census data. The panel recommends to the Secretaries of Commerce and Education that funds under Title I for fiscal 1997 be allocated on the basis of estimates that are obtained by averaging two poverty rates and then applying the average rate to the 1994 population estimate. First, calculate an average poverty rate for a county as a simple average of (1) the rate based on the number of related school-age children in the 1990 census who were in poverty in 1989 and (2) the rate based on the Census Bureau's model-based estimates of the number of related school-age children in 1994 who were in poverty in 1993. Then, obtain the number of related school-age children in poverty by multiplying this average rate by the Census Bureau's estimate of the number of related school-age children (ages 5–17) in the county in 1994. The panel's recommendation takes some account of the changing number and geographic distribution of children in poverty by using the model-based estimates, but it also uses the decennial census estimates to moderate the results from a model that has not yet been fully evaluated. This solution will smooth the transition to model-based estimates for subsequent allocations, after further re-

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Small-Area Estimates of School-Age Children in Poverty: Interim Report I: Evaluation of 1993 County Estimates for Title I Allocations search has been conducted. This recommendation is made in response to the need of the Secretary of Education to make an immediate decision regarding allocation of Title I funds for fiscal 1997. The panel stresses that the recommendation pertains only to Title I allocations to be made now. It is not a recommendation for any other purpose. For the future, the panel encourages the Census Bureau to continue the research it has begun. The need to produce estimates in time for the fiscal 1997 allocations limited the Census Bureau's ability to thoroughly evaluate its model-based estimates, compare its model with alternative ones, and further investigate other approaches to developing updated estimates of poverty for small areas. Future work should take advantage of new research, some of it already under way at the Census Bureau, on statistical methods for making estimates for small geographic areas. The Census Bureau also needs to determine whether it is possible to develop acceptably reliable model-based estimates at the school district level. Finally, it is critical that any official estimates of the numbers of children in poverty for counties or school districts released by the Census Bureau be accompanied by formal documentation of methods, estimates of reliability, and other detailed evaluations.

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