National Academies Press: OpenBook

Measuring Poverty: A New Approach (1995)

Chapter: DETERMINING PROGRAM BENEFIT LEVELS

« Previous: 8 The Poverty Measure and AFDC
Suggested Citation:"DETERMINING PROGRAM BENEFIT LEVELS." National Research Council. 1995. Measuring Poverty: A New Approach. Washington, DC: The National Academies Press. doi: 10.17226/4759.
×
Page 336
Suggested Citation:"DETERMINING PROGRAM BENEFIT LEVELS." National Research Council. 1995. Measuring Poverty: A New Approach. Washington, DC: The National Academies Press. doi: 10.17226/4759.
×
Page 337

Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

THE POVERTY MEASURE AND AFDC 336 DETERMINING PROGRAM BENEFIT LEVELS We recommend (in Chapter 7) that serious consideration be given to the use of the proposed poverty measure as an eligibility standard for programs that tie eligibility for benefits and services to the current poverty measure. It might seem a logical next step to suggest a direct relationship of the proposed poverty measure to program benefits. Certainly, the existence of a poverty threshold that makes reasonable adjustments for differences in family circumstances, including differences in the cost of living across regions of the country, creates an impetus for program benefits to be related to that threshold. However, there are many factors that properly enter into a determination of benefit levels, only one of which is a poverty threshold. At present, there is wide variation in AFDC benefits across the 50 states and the District of Columbia, and, in most states, benefits are considerably below the official poverty threshold. As of January 1994, the states' median standard of need for a three-person family was 60 percent of the corresponding official poverty threshold, and the median maximum benefit was 38 percent of the poverty threshold.1 The median of the maximum combined AFDC and food stamp benefit for the states was 69 percent of the poverty threshold. Looking across states, the maximum AFDC benefit for a three-person family in January 1994 varied from $923 per month in Alaska to $120 in Mississippi, with a median of $366, a mean of $396, and a coefficient of variation of 40 percent; see Table 8-1.2 The maximum AFDC benefit ranged from $240 to $552 (25-58% of the poverty threshold) in about two-thirds of the states; eight states exceeded this range, and eight states fell below it. The maximum combined AFDC and food stamp benefit for a three-person family exhibited somewhat less dispersion, varying from $1,208 in Alaska to $415 in Mississippi, with a median of $658, a mean of $675, and a coefficient of variation of 22 percent. Food stamps have this effect because of the program's benefit formula, which assumes that families will devote 30 percent of their countable income to food expenditures (see Chapter 7). Hence, an increase of $1 in AFDC benefits (or other countable income) decreases food stamp benefits by 30 cents, and a decrease of $1 in AFDC benefits (or other countable income) increases food stamp benefits by 30 cents. The maximum combined AFDC and food stamp benefit ranged from $528 to $822 (55-86% of the poverty threshold) in 39 states. Adjusting AFDC and food stamp benefit levels to take account of differences in the cost of living by state further reduces the variation, although only to a limited extent (see below). 1 The three-person family (parent or caretaker and two children) is the usual reference family for AFDC. 2 The coefficient of variation is the standard deviation of a distribution as a percentage of the mean value; the standard deviation is the value that when added to or subtracted from the mean includes about two-thirds of the observations (states in this case).

THE POVERTY MEASURE AND AFDC 337 TABLE 8-1 AFDC Need Standards, Maximum AFDC Benefits, and Maximum Combined AFDC and Food Stamp Benefits for a Family of Three, January 1994 Maximum AFDC Maximum Combined Benefit AFDC/Food Stamp Benefit State AFDC Dollar Percent of Dollar Percent of Need Value Need Value Need Standard Alabama 673 164 24 459 68 Alaska 975 923 95 1,208 124 Arizona 964 347 36 639 66 Arkansas 705 204 29 499 71 California 715 607 85 821 115 Colorado 421 356 85 645 153 Connecticut 680 680 100 872 128 Delaware 338 338 100 633 187 District of 712 420 59 690 97 Columbia Florida 991 303 31 598 60 Georgia 424 280 66 575 136 Hawaii 1,140 712 62 1,134 99 Idaho 991 317 32 612 62 Illinois 890 367 41 658 74 Indiana 320 288 90 583 182 Iowa 849 426 50 694 82 Kansas 429 429 100 713 166 Kentucky 526 228 43 523 99 Louisiana 658 190 29 485 74 Maine 553 418 76 689 125 Maryland 507 366 72 661 130 Massachusetts 579 579 100 801 138 Michigan a 551 459 83 717 130 Minnesota 532 532 100 768 144 Mississippi 368 120 33 415 113 Missouri 846 292 35 587 69 Montana 511 401 78 677 132 Nebraska 364 364 100 651 179 Nevada 699 348 50 640 92 New Hampshire 1,648 550 33 781 47 New Jersey 985 424 43 700 71 New Mexico 357 357 100 646 181 New Yorkb 577 577 100 816 141 North Carolina 544 272 50 567 104 North Dakota 409 409 100 682 167 Ohio 879 341 39 636 72 Oklahoma 471 324 69 619 131 Oregon 460 460 100 753 164 Pennsylvania 614 421 69 691 113

Next: Proposals for AFDC Minimum Benefits: A Brief History »
Measuring Poverty: A New Approach Get This Book
×
Buy Paperback | $75.00 Buy Ebook | $59.99
MyNAP members save 10% online.
Login or Register to save!
Download Free PDF

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.

  1. ×

    Welcome to OpenBook!

    You're looking at OpenBook, NAP.edu's online reading room since 1999. Based on feedback from you, our users, we've made some improvements that make it easier than ever to read thousands of publications on our website.

    Do you want to take a quick tour of the OpenBook's features?

    No Thanks Take a Tour »
  2. ×

    Show this book's table of contents, where you can jump to any chapter by name.

    « Back Next »
  3. ×

    ...or use these buttons to go back to the previous chapter or skip to the next one.

    « Back Next »
  4. ×

    Jump up to the previous page or down to the next one. Also, you can type in a page number and press Enter to go directly to that page in the book.

    « Back Next »
  5. ×

    To search the entire text of this book, type in your search term here and press Enter.

    « Back Next »
  6. ×

    Share a link to this book page on your preferred social network or via email.

    « Back Next »
  7. ×

    View our suggested citation for this chapter.

    « Back Next »
  8. ×

    Ready to take your reading offline? Click here to buy this book in print or download it as a free PDF, if available.

    « Back Next »
Stay Connected!