APPENDIX B
Comparison of Census and CPS Estimates of Poverty

There are many similarities and some differences between the CPS and the census systems for measuring poverty. They both base poverty estimates on the official definition of poverty for the nation, which compares the income of a family (or an unrelated individual) to a given poverty threshold, but they differ in the amount of data they collect, how they collect and process the data, and the frequency of data collection.

1990 CENSUS

A census of the U.S. population is conducted once every 10 years, and 1990 is the most recent one. In the 1990 census, income data—the basis for measuring poverty—were collected from a sample of 15 million households: a sample of about I in 6 households spread systematically across the country, except that very small counties and places (with estimated 1988 populations under 2,500) were sampled at a 1-in-2 rate, and very populous census tracts (or equivalent areas) were sampled at a 1-in-8 rate.

Data are collected in the census mainly by self-enumeration, whereby respondents fill out questionnaires received in the mail. Enumerators follow up those households that fail to return a questionnaire and collect the information through direct interviews. In 1990 approximately 74 percent of U.S. households returned their questionnaires with some or all of the requested information (Edmonston and Schultze, 1995:189). Data from the balance of the population were obtained by personal interviews. The follow-up enumerators are usually inexperienced temporary workers who are given very limited training.

The income data in the 1990 census are based on eight questions on various



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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 APPENDIX B Comparison of Census and CPS Estimates of Poverty There are many similarities and some differences between the CPS and the census systems for measuring poverty. They both base poverty estimates on the official definition of poverty for the nation, which compares the income of a family (or an unrelated individual) to a given poverty threshold, but they differ in the amount of data they collect, how they collect and process the data, and the frequency of data collection. 1990 CENSUS A census of the U.S. population is conducted once every 10 years, and 1990 is the most recent one. In the 1990 census, income data—the basis for measuring poverty—were collected from a sample of 15 million households: a sample of about I in 6 households spread systematically across the country, except that very small counties and places (with estimated 1988 populations under 2,500) were sampled at a 1-in-2 rate, and very populous census tracts (or equivalent areas) were sampled at a 1-in-8 rate. Data are collected in the census mainly by self-enumeration, whereby respondents fill out questionnaires received in the mail. Enumerators follow up those households that fail to return a questionnaire and collect the information through direct interviews. In 1990 approximately 74 percent of U.S. households returned their questionnaires with some or all of the requested information (Edmonston and Schultze, 1995:189). Data from the balance of the population were obtained by personal interviews. The follow-up enumerators are usually inexperienced temporary workers who are given very limited training. The income data in the 1990 census are based on eight questions on various

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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 components of income. (The census form also included a total income question, which was intended to permit respondents to enter a single amount if they could not provide amounts by source.) Nonresponse rates are higher for income than for most other items in the census. When household income information is missing, the Census Bureau uses statistical techniques to impute it on the basis of nearby households with similar characteristics. For the 1990 census, on average, 19 percent of aggregate household income was imputed (Edmonston and Schultze, 1995:387). All censuses are subject to undercount—that is, failure to count everyone. There are no direct estimates of the undercount for poor children. For 1990, the net undercount was estimated at 1.8 percent for the total population, but there were substantial differences among population groups. For example, the net undercount was estimated at 5.7 percent for blacks and 1.3 percent for nonblacks. The net undercount also varied significantly by age: black girls and boys aged 5–9 were missed at a rate of 7.5 percent and 7.7 percent, respectively. Almost two-thirds of the estimated omitted population consisted of two age groups: children under age 10 and men aged 25–39 (Robinson et al., 1993:13). The undercount was also higher in large cities than in other areas, and it was disproportionately concentrated in the inner areas of those cities. These are also the areas where poverty is high. Thus, it seems likely that the undercount for poor children aged 5–17 is larger than the undercount of all children aged 5–17. CURRENT POPULATION SURVEY The CPS is a monthly labor force participation survey. For the period from 1990 to 1994, about 60,000 housing units were eligible for interview every month, and about 57,400 of them were found to be occupied by households eligible for interview.1 Of these 57,400 households, an interview was not obtained for various reasons for about 2,600 households—a noninterview rate of 4.5 percent. Part of the CPS sample is changed each month: in the rotation plan, three-fourths of the sample is common from one month to the next, and one-half is common for the same month a year earlier. Each March, supplementary questions are asked about money income received the previous year. To obtain more reliable income data for the Hispanic-origin population, all November CPS households with one or more Hispanic persons are reinterviewed in March if they still include a Hispanic person. This procedure adds about 2,500 Hispanic households to the sample in March. The CPS sample design, which is a multistage probability sample design, is revised about once every 10 years on the basis of the results of the latest census. 1   Starting in 1996, about 50,000 households nationwide (a sample of about 1 in 2,000 households) were eligible for interview every month—a reduction of about 17 percent from the early 1990s.

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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 From 1986 to 1994, the CPS sample design included 729 sample areas consisting of about 1,300 counties. These areas were chosen on the basis of 1980 census data to represent all 3,141 counties (in 1990) and independent cities in the 50 states and the District of Columbia. A design based on the 1990 census was phased in between April 1994 and July 1995: it included 792 sample areas consisting of about 1,300 counties, chosen to represent all 3,143 counties (in 1994) and independent cities in the 50 states and the District of Columbia. In general, larger states have larger CPS sample sizes. The largest states, however, have CPS sample sizes that are smaller than their proportionate share of the U.S. population, and the smallest states have proportionately larger sample sizes. For example, California, with 12.2 percent of the U.S. population, has 9.9 percent of the CPS sample; Wyoming, with 0.18 percent of the U.S. population, has 1.3 percent of the CPS sample. This sample design means that estimates of poverty rates in large states are generally more precise than those in smaller states. The largest states, however, have larger relative errors due to sampling variability than would be expected if the CPS sample were allocated to the states in proportion to their population; the reverse holds true for smaller states. The sample is designed to meet specific reliability criteria for the nation, each of the 50 states and the District of Columbia, and the substate areas of New York City and the Los Angeles-Long Beach metropolitan area. The CPS is not designed for direct county estimates. More than one-half of U.S. counties do not have sample households in the survey. The CPS is carried out by permanent, experienced, and well-trained interviewers, initially by personal direct interviews, with subsequent interviews by telephone. For the March Income Supplement, the CPS asks household respondents about their money income received during the previous year, using a detailed set of questions for identifying about 28 different sources. About 20 percent of aggregate household income is imputed (about the same percentage as in the census)—that is, the data are missing and therefore constructed from information from similar households (Citro and Kalton, 1993:Table 3-6). Like other household surveys, the CPS exhibits population undercoverage at higher rates than the census itself. The coverage ratios for the CPS show the magnitude of the population undercoverage relative to the census. Coverage ratios are defined as the estimated survey population before ratio adjustment to census-based population controls divided by the census-based population controls. (Beginning with the March 1994 CPS, the population controls reflect an adjustment for the undercount in the census itself.) For March 1994, the ratio of the CPS estimated population to the population control total (all ages) was 92 percent; for the age group 0–14 and the age group 15–19 years, the ratios were 94 percent and 88 percent, respectively (Bureau of the Census, 1996:Table D-2). CPS undercoverage is corrected by ratio adjustments to the survey weights that bring the CPS estimates of population in line with updated national population controls by age, race, sex, and Hispanic origin. However, the ratio adjust-

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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 ments do not correct for other characteristics on which the undercovered population might be expected to differ from the covered population. For example, the ratio adjustments reweight equally the sample households within an age-race-sex-Hispanic origin category, when research suggests that it is likely that lower income households within a category are more poorly covered than higher income households. DIFFERENCES BETWEEN CENSUS AND CPS DATA In comparing the census and the CPS as data sources for estimates of income and poverty, one difference is the definition of the universe for which the numbers in poverty are estimated; see Table B-1. Residence rules differ for the two data sources: in the census, students attending colleges away from their parental homes are counted at their college location; in the CPS, they are usually counted at their parental home. Also, the census excludes all unrelated individuals under age 15 in households from the poverty universe; the CPS excludes only those unrelated individuals under age 15 in households who are not part of an unrelated subfamily. (Unrelated subfamilies are made up of people who are related to each other but not to the householder, such as the family of a resident employee.) For TABLE B-1 Poverty Universes for the 1990 Census and the March 1990 CPS Component 1990 Census March 1990 CPS Total resident U.S. population 248,709,873 250,180,762a   Population not covered in CPS -3,998,221 -3,989,762     Institutionalized -3,334,018 —b     Armed Forces in barracks -589,700 —b     Unrelated individuals under 15 in group quarters -74,503 —b   Unrelated individuals under 15 in households -780,235c -199,000   College dormitory residents -1,953,558 0d Poverty universe 241,977,859 245,992,000 a Reflects 1980 census-based population estimates, which estimated a higher resident population in 1990 than the 1990 census. b Intercensal estimates used to derive CPS population controls for survey weighting are not available by component. The sum of these three components was 3,989,762. c The large difference between census and CPS estimates reflects the census practice of excluding children under age 15 in unrelated subfamilies from the poverty universe. d The CPS includes household members away at school who are living in dormitories as family members and includes them in the poverty universe. SOURCE: Data from Housing and Household Economic Statistics Division, Bureau of the Census.

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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 estimates of related children in poverty (who are children in families but not children in unrelated subfamilies), the CPS and census poverty universes differ less than the CPS and census poverty universes for the total population. Essentially, the only difference is the treatment of college students in dormitories. Overall imputation rates for income nonresponse are about the same in the census and the CPS, and the amount of income imputed is similar. Table B-2 presents aggregate income estimates for different income components from the two sources. The more detailed set of income questions in the CPS—28 compared with 8 in the census—and the direct interviewing methodology in the CPS would be expected to provide more comprehensive and accurate income data. It is believed that overreporting of some components of income, such as wages and salaries, occurs in the self-reported census data. (Another reason for the overestimate of wages and salaries in the census, compared with the independent benchmark, may be the editing procedures that were applied to responses to the total income question.) The net effect of the differences between the CPS and the census in data collection, processing, and other aspects of the two systems is that there are dif- TABLE B-2 Household Income by Type, 1989:1990 Census and March 1990 CPS   Aggregate Income (in $ billions)   Percentage of Benchmark Source of Income 1990 Census March 1990 CPS Independent Benchmark 1990 Census March 1990 CPS Total money income 3,537.4 3,460.4 — — — Amounts for which benchmarks can be computed 3,499.2 3,393.9 3,819.7 91.6 88.7 Wages and salaries 2,652.7 2,545.9 2,625.2 101.0 96.8 Nonfarm self-employment 218.6 207.1 290.0 75.4 71.4 Farm self-employment 20.3 18.6 49.9 40.7 37.2 Interest, dividends, and rent 258.8 247.7 471.5 54.9 52.5 Social Security and Railroad Retirement 188.2 201.4 207.9 90.5 96.9 Public assistance 28.3 25.9 32.8 86.3 79.0 Retirement, disability, and survivor income 132.3 147.3 142.4 92.9 103.4 Other income sources 38.2 66.5 — — — NOTE: The independent benchmarks shown here for 1989 were extrapolated from 1990 independent estimates. For a detailed discussion of development of independent benchmarks, see Bureau of the Census (1993b:C1–C3).

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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 ferences between them in estimates of income and poverty. Aggregate estimates of total income and income by type when compared with independent benchmarks differ between the CPS and census. For example, total income from the 1990 census (for income types for which independent estimates can be constructed) is 91.6 percent of the benchmark; the corresponding figure from the March 1990 CPS is 88.7 percent. For income from such sources as Social Security and Railroad Retirement and retirement, disability, and survivor income, the CPS is closer to the benchmark than the census. Estimates of median household income in 1989 by state differ between the March 1990 CPS and the 1990 census by amounts that are statistically significant for 18 states; see Table B-3. For 15 of the 18 states, the census estimates are higher than the CPS estimates; for some states, the differences are as much as 10–15 percent. For three states, the census estimates of median household income are significantly lower than the CPS estimates, in the range of 6–8 percent. Estimates of poverty rates by state also differ between the CPS and the census: statistically significant differences are observed for seven states; for six of them, the census poverty rates are significantly higher; see Table B-4. Estimates of poverty rates for related children aged 5–17 differ between the CPS and the census. The CPS estimate that 18 percent of all related children aged 5–17 were poor in 1989 (based on a 3-year average of data from the March 1989, 1990, and 1991 CPS) exceeds the census estimate by 1 percentage point (5.9% of the census estimate), a difference that is statistically significant at the 10 percent significance level; see Table B-5. (The CPS estimate of the number of poor school-age children also exceeds the census estimate by a statistically significant amount; see Table 2-4.) A question is whether CPS and census estimates of poverty rates and numbers of poor related children aged 5–17 differ in terms of geographic distribution, perhaps because of differences in completeness of income reporting that reflect the income mix in different areas or other reasons. In preliminary research conducted by the panel, no statistically significant differences were found in the ratios of CPS to census estimates of the number of poor school-age children among various geographic groupings of counties and states. For example, when counties were grouped by size, there were no significant differences among the groups in their ratios of CPS to census estimates of the number of poor school-age children. In summary, there are many factors reflecting differences between the census and CPS concepts and procedures that may account for variations in their estimates of poverty levels, rates, and distributions. It is important to keep these factors in mind, particularly when attempting to measure changes in poverty at specific levels of geography since 1990.

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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 TABLE B-3 Median Household Income in 1989 by State: 1990 Census and March 1990 CPS   Income (in $)           1990 Census   March 1990 CPS Percentage Difference: Census-CPS as Percent of CPS State and National Median Standard Error Median Standard Error U.S. Total 30,056 7 28,906 159 4.0* Alabama 23,597 58 21,284 1,070 10.9* Alaska 41,408 165 36,006 1,378 15.0* Arizona 27,540 72 28,552 1,210 -3.5 Arkansas 21,147 50 21,433 915 -1.3 California 35,798 27 33,009 618 8.4* Colorado 30,140 55 26,806 1,398 12.4* Connecticut 41,721 77 42,321 1,592 -1.4 Delaware 34,875 151 32,068 1,133 8.8* D.C. 30,727 156 26,752 1,015 14.9* Florida 27,483 35 26,085 475 5.4* Georgia 29,021 53 27,542 1,021 5.4 Hawaii 38,829 173 35,035 1,328 10.8* Idaho 25,257 79 24,654 953 2.4 Illinois 32,252 32 31,300 623 3.0 Indiana 28,797 50 25,898 1,022 11.2* Iowa 26,229 46 26,265 792 -0.1 Kansas 27,291 56 26,862 908 1.6 Kentucky 22,534 55 23,283 1,206 -3.2 Louisiana 21,949 49 22,861 1,857 -4.0 Maine 27,854 82 28,221 1,389 -1.3 Maryland 39,386 73 36,016 1,187 9.4* Massachusetts 36,952 58 36,086 704 2.4 Michigan 31,020 32 30,775 790 0.8 Minnesota 30,909 37 30,185 1.278 2.4 Mississippi 20,136 59 19,917 947 1.1 Missouri 26,362 42 26,497 746 -0.5 Montana 22,988 98 23,692 1,311 -3.0 Nebraska 26,016 60 26,319 1,521 -1.2 Nevada 31,011 92 29,340 8,455 5.7* New Hampshire 36,329 97 37,532 1,371 -3.2 New Jersey 40,927 51 39,120 948 4.6* New Mexico 24,087 89 22,602 1,028 6.6 New York 32,965 41 31,496 453 4.7* North Carolina 26,647 38 26,406 517 0.9 North Dakota 23,213 94 25,229 903 -8.0* Ohio 28,706 37 29,021 655 -1.1 Oklahoma 23,577 57 23,667 1,236 -0.4

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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   Income (in $)           1990 Census   March 1990 CPS Percentage Difference: Census-CPS as Percent of CPS State and National Median Standard Error Median Standard Error Oregon 27,250 55 28,529 1,435 -4.5 Pennsylvania 29,069 32 28,690 684 1.3 Rhode Island 32,181 120 30,124 1,354 6.8 South Carolina 26,256 56 23,798 1,059 10.3* South Dakota 22,503 89 24,108 999 -6.7* Tennessee 24,807 50 22.611 1,305 9.7 Texas 27,016 27 25,886 559 4.4* Utah 29,470 86 30.717 1,014 -4.1 Vermont 29,792 110 31,295 1,136 -4.8 Virginia 33,328 60 34,118 1,205 -2.3 Washington 31.183 44 31,961 1,472 -2.4 West Virginia 20,795 61 21,677 843 -4.1 Wisconsin 29,422 53 29,123 1,240 1.0 Wyoming 27,096 133 29,521 1,289 -8.2* * Statistically significant difference from 0 at the 10 percent significance level. SOURCE: Data from Bureau of the Census.

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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 TABLE B-4 Poverty Rates for All Persons by State, 1989:1990 Census and March 1990 CPS   1990 Census     March 1990 CPS       State and National Population (000s) Total Poverty Rate Standard Errora Population (000s) Total Poverty Rate Standard Error Difference Between Rates U.S. Total 241,978 13.12 0.012 245,992 12.82 0.2 0.30 Alabama 3,946 18.34 0.096 4,074 18.90 2.0 -0.56 Alaska 532 9.00 0.140 488 10.45 1.5 -1.45 Arizona 3,584 15.74 0.086 3,556 14.12 1.9 1.63 Arkansas 2,292 19.07 0.116 2,419 18.27 2.0 0.80 California 29,003 12.51 0.027 29,346 12.85 0.7 -0.35 Colorado 3,213 11.68 0.080 3,258 12.06 1.8 -0.38 Connecticut 3,188 6.82 0.057 3,136 2.87 1.0 3.95* Delaware 645 6.71 0.086 676 10.06 1.7 -1.35 D.C. 571 16.87 0.233 569 17.93 2.4 -1.06 Florida 12,641 12.69 0.042 12,762 12.46 0.9 0.23 Georgia 6,300 14.65 0.069 6,197 14.99 1.9 -0.34 Hawaii 1,071 8.25 0.119 1,036 11.23 1.8 -2.98* Idaho 966 13.25 0.153 1,014 12.43 1.6 0.82 Illinois 11,144 11.91 0.033 11,559 12.72 0.9 -0.81 Indiana 5,372 10.68 0.051 5,453 13.74 1.9 -3.06 Iowa 2,677 11.48 0.074 2,835 10.26 1.5 1.22 Kansas 2,392 11.48 0.074 2,835 10.26 1.5 1.22

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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   1990 Census     March 1990 CPS State and National Population (000s) Total Poverty Rate Standard Errora Population (000s) Total Poverty Rate Standard Error Difference Between Rates Kentucky 3,582 19.03 0.093 3,576 16.11 2.0 2.92 Louisiana 4,101 23.58 0.108 4,080 23.28 2.3 0.29 Maine 1,190 10.80 0.108 1,233 10.38 1.6 0.72 Maryland 4,661 8.27 0.054 4,567 9.00 1.6 -0.73 Massachusetts 5,812 8.93 0.050 5,831 8.80 0.8 0.14 Michigan 9,077 13.12 0.040 9,297 13.21 0.9 -0.09 Minnesota 4,259 10.22 0.053 4,268 11.20 1.7 -0.98 Mississippi 2,503 25.21 0.147 2,574 21.99 2.0 3.22 Missouri 4,971 13.34 0.055 5,193 12.59 1.8 0.75 Montana 777 16.07 0.186 816 15.56 1.8 0.51 Nebraska 1,531 11.14 0.097 1,602 12.73 1.6 -1.59 Nevada 1,178 10.15 0.118 1,127 10.74 1.7 -0.58 New Hampshire 1,076 6.42 0.095 1,100 7.64 1.6 -1.21 New Jersey 7,563 7.58 0.030 7,623 8.16 0.8 -0.58 New Mexico 1,584 20.61 0.141 1,519 19.55 2.0 1.05 New York 17,482 13.03 0.040 17,938 12.57 0.7 0.46 North Carolina 6,397 12.97 0.059 6,301 12.22 0.9 0.75 North Dakota 614 14.38 0.210 642 12.31 1.6 2.07 Ohio 10,574 12.54 0.036 10,754 10.63 0.8 1.91* Oklahoma 3,052 16.71 0.091 3,126 14.72 1.8 1.99 Oregon 2,776 12.42 0.080 2,915 11.22 1.8 1.21 Pennsylvania 11,536 11.13 0.033 12,141 10.39 0.8 0.84

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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 Rhode Island 964 9.61 0.121 963 6.65 1.5 2.96* South Carolina 3,368 15.37 0.101 3,446 16.98 1.8 -1.60 South Dakota 670 15.86 0.160 696 13.22 1.6 2.64 Tennessee 4,744 15.70 0.045 4,833 16.44 1.9 -2.73 Texas 16,580 18.10 0.044 16,886 17.06 1.0 1.04 Utah 1,694 11.36 0.104 1,683 8.20 1.4 3.16* Vermont 541 9.86 0.145 556 7.91 1.6 1.94 Virginia 5,969 10.25 0.055 6.159 10.89 1.4 -0.65 Washington 4,741 10.92 0.058 4,729 9.62 1.6 1.30 West Virginia 1,755 19.66 0.134 1,799 15.73 1.9 3.93* Wisconsin 4,754 10.70 0.054 4,694 8.37 1.4 2.32* Wyoming 442 11.86 0.196 462 10.82 1.9 1.04 * Statistically significant difference from 0 at the 10 percent significance level. a Standard errors of estimates from the 1990 census are calculated using 1980 census design factors. SOURCE: Data from Bureau of the Census.

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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 TABLE B-5 Poverty Rates for Related Children Aged 5–17 in 1989, by Selected Categories of Counties: 1990 Census and March CPS     Percent Poor Related Children Aged 5–17   County Category 1990 Census March CPSa Difference Between Rates U.S. Total 17.0 18.0 1.0* Metropolitan         Central 16.4 17.9 1.5*   Other 11.4 12.5 1.1 Nonmetropolitan 20.4 19.9 -0.5 Regionb         Northeast 14.3 15.5 1.2*   Northcentral 14.9 15.8 0.9*   South 20.5 21.3 0.8   West 16.2 17.3 1.1* Population Size         Under 2,500 22.9 22.1 -0.8   2,500–4,999 22.2 14.6 -7.6   5,000–9,999 23.1 24.7 1.6   10,000–49,999 20.6 20.9 0.3   50,000–99,999 16.6 15.7 -0.9   100,000–499,999 14.7 15.7 1.0*   500,000–999,999 14.6 15.6 1.0   1,000,000 and over 19.1 21.5 2.4* * Statistically significant difference from 0 at the 10 percent significance level. a The CPS estimates are 3-year centered averages of data from the 1989, 1990, and 1991 March CPS (reported income in 1988, 1989, and 1990, with population controls derived from the 1980 census). b The Census Bureau's regions are defined in Note c of Table 2-3. SOURCE: Data from Bureau of the Census.