National Academies Press: OpenBook

Measuring Poverty: A New Approach (1995)

Chapter: 8 The Poverty Measure and AFDC

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Suggested Citation:"8 The Poverty Measure and AFDC." National Research Council. 1995. Measuring Poverty: A New Approach. Washington, DC: The National Academies Press. doi: 10.17226/4759.
Page 335

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THE POVERTY MEASURE AND AFDC 335 8 The Poverty Measure and AFDC In addition to reviewing the statistical measure of poverty, the panel was asked to consider issues of benefit levels for government family assistance programs—in particular, a national minimum benefit standard for the Aid to Families with Dependent Children (AFDC) program. Currently, there are large differences in AFDC benefit standards across states, and no state provides benefits as generous as the official poverty thresholds. Federal policy makers have several times considered enacting a uniform minimum benefit standard that would provide a nationwide floor for AFDC benefits. The congressional debate over the Family Support Act (FSA) of 1988 included proposals for a national minimum benefit, but they were not accepted, largely because of the sizable estimated budgetary costs to the government. The FSA did request a study of minimum benefit standards, however, and this chapter responds to that request. We considered conceptual and statistical issues involved in setting a national minimum benefit standard for AFDC, just as we considered such issues for the poverty line. In our review, we focused on the nature of the relationship between program benefit levels (whether in AFDC or other cash and near-cash assistance programs) and a measure of poverty (whether ours or another), and we show why that relationship is indirect at best. We also considered the relationship of the proposed poverty measure to AFDC standards of need. AFDC is unique among cash and near-cash assistance programs in that the states are required to establish a standard of need but are not required to—and often do not—use this standard to determine actual benefits. (See Appendix D for details of the AFDC program.)

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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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