Measuring Poverty: A New Approach (1995)

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OTHER ISSUES IN MEASURING POVERTY 314 same private income if these programs did not in fact exist (e.g., they might increase their work hours or delay retirement). Hence, properly speaking, poverty rates calculated under alternative resource definitions assess the implications of an instantaneous change in government programs before there is time for people to adjust their behavior. Nonetheless, we think it is useful to produce poverty head-count ratios (and other indexes, such as the average income of the poor) under some alternative resource definitions. In particular, we believe it would be useful to publish poverty statistics for measures in which resources are defined net of government taxes and transfers. Several such measures could be useful: one in which resources are defined in before-tax terms, one in which resources are net of taxes but exclude benefits from means-tested government programs (whether cash or in-kind), and one in which resources exclude benefits from all government programs, whether means tested or not. Again, the statistics from such measures must be interpreted with care and caveats about their use provided in the text of reports on poverty: because of behavioral responses, the poverty rate in a world without government taxes or government assistance programs would likely differ from the rate under these measures. Nonetheless, when compared with the proposed poverty measure, such before-tax and transfer measures should be helpful for evaluating the effects of government policies and programs on poverty. THE LIMITED SCOPE OF MEASURING ECONOMIC POVERTY The body of this report focuses on the concept and measurement of economic poverty. We conclude this chapter by noting three limitations in the scope of our efforts: the limited dimension of impoverishment on which we focus; the need for a richer understanding of the meaning and consequences of impoverishment for adults and, especially, for children; and the need for a deeper understanding of the causes of poverty and the potential private and collective actions that might reduce its prevalence and its adverse effects. First, although the measure of economic poverty is a very powerful social indicator, it speaks only to one dimension of deprivation—economic or material deprivation, fairly narrowly defined. Measures of other types of deprivation— psychological, physical, social—and the overlap with the economic poverty measure are also needed. Many other dimensions of impoverishment can exist, from anxiety and fear about one's personal safety when living in a high-crime neighborhood or with abusive family members to suffering from inadequate medical care and from homelessness to loneliness to helplessness. These, too, need to be conceptualized, measured, and their prevalence recorded across groups and over time. The joint incidence of these other aspects of impoverishment with economic poverty is, one suspects, quite high, but 

OTHER ISSUES IN MEASURING POVERTY 315 not complete. In describing the extent of impoverishment in the United States, these nonmonetary indices would provide important added information. Second, in this volume we have not explored, analytically or descriptively, the material circumstances of those who are poor: for example, what household goods they have or how they allocate their resources among categories of consumption. Also, we have not asked about the consequences of economic poverty in terms of other dimensions of impoverishment. We encourage research that asks how economic poverty is linked to families' day-to-day lives— for example, to family violence, homelessness or frequent moves to different households, safety of their neighborhoods, or access to friends, services, and jobs. Similarly, the consequences of economic poverty for access to health care and social services, for an individual's self-esteem, mental and physical health, school achievement, prospects for employment, marriage, and parenting all deserve much more research attention. Also, we have not considered in this volume how the consequences of economic poverty differ by an individual's age or other characteristics. These other, less easily quantified indexes of well-being that may or may not be associated with economic poverty are also deserving of study in order to have a fuller understanding of the lives of the poor and a more complete documentation of the consequences of living in poverty. Consider, in this regard, the life experiences of children who are poor. Evidence suggests that children living in poor families under the current measure score lower on cognitive, language, and achievement tests and exhibit higher rates of grade failure, of placement in special education, and of dropping out of high school (see Baydar, Brooks-Gunn, and Furstenberg, 1993; Brooks- Gunn, Guo, and Furstenberg, 1993; Fitzgerald, Lester, and Zuckerman, 1995; Haveman, Wolfe, and Spaulding, 1991; Huston, 1991; Huston, McLoyd, and Garcia Coll, 1994; Ramey et al., 1992). Children's physical health indicators, such as low birth weight, failure to thrive, and chronic illnesses, also have been shown to be related to measured poverty (Adler et al., 1994; Brooks-Gunn, 1990; Egbuonu and Starfield, 1982; Eisen et al., 1980; Klerman, 1991; McCormick et al., 1991; Parker, Greer, and Zuckerman, 1988; Stein et al., 1987). Moderate to severe behavior problems in children are also linked statistically to economic poverty (see, e.g., Rutter, 1989). At the same time, other social and demographic characteristics of families are associated with negative child and adolescent outcomes, including parents' education, age, and occupation and household structure (i.e., two- or one-parent households). Controlling for such characteristics in statistical models of child outcomes generally diminishes but does not eliminate the association between economic poverty and these outcomes. Such findings underscore the importance of considering other dimensions of poor children's lives that contribute to the probability of decrements in all realms of development. 

OTHER ISSUES IN MEASURING POVERTY 316 Not only can the adverse effects of economic poverty on children's lives be clearly documented, but children are also disproportionately among the poverty population in the United States. Presently, one in five children in the United States is living in poverty according to the official measure, with the percentage being slightly higher for children aged 6 and under, compared with the rate of those of elementary and high school age (Hernandez, 1993). The costs of children in poverty are experienced not only by the children themselves, but also by society. Children have great value to their families and communities. As is often said, children are the nation's most important resource; in their well-being lies the reflection of the character of society today as well as its hopes for tomorrow. Children are an important human resource; their success in school and their eventual success in the workplace are essential for a productive society. Being reared in a household with limited economic resources is disproportionately associated with higher rates of crime, violence, underemployment, unemployment, and isolation from the larger community. Children are dependent on others for their well-being and because of their dependence, they enter or avoid poverty by virtue of their family's economic circumstances. They typically cannot alter their poverty status by themselves, at least until they approach late adolescence, so it is fitting to focus special attention on them in any study of poverty. Third, and last, this volume does not address the broad and well-researched topics of the causes of economic poverty or issues in the development of policies to reduce its prevalence or its adverse effects. Those topics are well beyond the scope of the panel's work.