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Measuring Poverty: A New Approach (1995)

Chapter: Other Issues

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Suggested Citation:"Other Issues." National Research Council. 1995. Measuring Poverty: A New Approach. Washington, DC: The National Academies Press. doi: 10.17226/4759.
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Page 333
Suggested Citation:"Other Issues." National Research Council. 1995. Measuring Poverty: A New Approach. Washington, DC: The National Academies Press. doi: 10.17226/4759.
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Page 334

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USE OF THE POVERTY MEASURE IN GOVERNMENT ASSISTANCE PROGRAMS 333 then the determination of countable income should subtract any such expenses that are incurred before comparing income with the eligibility cutoff. In this regard, we note that poverty thresholds developed according to the proposed concept would be more appropriate in many ways for eligibility determination in the Food Stamp Program than would the current poverty guidelines. This program currently defines countable income to exclude child care expenses and an allowance for taxes and other work-related expenses, which is consistent with the proposed threshold concept (but not with the current guidelines). In addition, out-of-pocket medical care expenditures above a certain limit are excluded from income for the elderly and disabled.14 In contrast, however, the fact that EITC benefits cannot be counted as income (by law) for purposes of food stamp eligibility introduces an element of inconsistency with the proposed concept. Again, we are not in a position to provide specific guidance for programs. We repeat that the need concept and the definition of countable income in a program should be consistent. Other Issues There are some other features of the proposed poverty measure that may or may not be suitable for program use. For example, the proposal is that need be measured on an annual basis, that asset values not be included in resources, and that the unit for measuring need be the family as defined by the Census Bureau. Program agencies may well have sound reasons for reaching some other decision on these aspects of program design. Thus, some programs are intended to provide short-term assistance and hence use a shorter accounting period than a year: for example, the accounting period in food stamps and AFDC is 1 month. In order to ensure that people applying for benefits have used up their available resources and are genuinely in crisis, programs with short accounting periods typically limit the assets that applicants can have and still be eligible for assistance. With regard to the assistance unit, programs differ in their target populations and hence often differ in their definition of an eligible unit—for example, the Food Stamp Program generally defines eligible units to be the entire household, whereas AFDC generally defines eligible units to be families consisting of dependent children and their parent(s)—a narrower definition of family than that used by the Census Bureau. These differences from the proposed statistical poverty measure are certainly appropriate in light of program objectives. 14 Shelter costs in excess of 50 percent of income (up to a ceiling for households with no elderly or disabled members) are also deducted from income for purposes of food stamp eligibility. This provision benefits people who, whether they live in high-cost or low-cost areas, pay what is deemed an excessive amount for housing relative to their resources.

USE OF THE POVERTY MEASURE IN GOVERNMENT ASSISTANCE PROGRAMS 334

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Measuring Poverty: A New Approach Get This Book
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Each year's poverty figures are anxiously awaited by policymakers, analysts, and the media. Yet questions are increasing about the 30-year-old measure as social and economic conditions change.

In Measuring Poverty a distinguished panel provides policymakers with an up-to-date evaluation of

  • Concepts and procedures for deriving the poverty threshold, including adjustments for different family circumstances.
  • Definitions of family resources.
  • Procedures for annual updates of poverty measures.

The volume explores specific issues underlying the poverty measure, analyzes the likely effects of any changes on poverty rates, and discusses the impact on eligibility for public benefits. In supporting its recommendations the panel provides insightful recognition of the political and social dimensions of this key economic indicator.

Measuring Poverty will be important to government officials, policy analysts, statisticians, economists, researchers, and others involved in virtually all poverty and social welfare issues.

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