National Academies Press: OpenBook

Measuring Poverty: A New Approach (1995)

Chapter: Trends in Need Standards and Benefits

« Previous: Differences in Equivalence Scales
Suggested Citation:"Trends in Need Standards and Benefits." National Research Council. 1995. Measuring Poverty: A New Approach. Washington, DC: The National Academies Press. doi: 10.17226/4759.
×
Page 368

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 368 (basic unit plus four added children). At one extreme, Louisiana increases its $138 benefit for the basic two-person unit by 32 percent on average ($44) for each additional child. At the other extreme, Alaska increases its much higher benefit of $821 for the basic unit by only 12 percent ($102) for each additional child. The median value that is added on average to the basic unit benefit for each added child is 23 percent.20 In looking at the shape of the equivalence scales for AFDC benefits, five states have a regular pattern whereby, within 1 or 2 percentage points, they add the same amount to the basic unit benefit for each additional child; 10 other states have a regular pattern within 6 percentage points. Ten states have a declining pattern, whereby they add progressively less for each child after the second or third. In contrast, 10 states add more for the third and fourth child than for either the second or fifth. Finally, 16 states have erratic patterns. For instance, they may add more for the third and fifth children than for the second and fourth. In this, they resemble the equivalence scale implicit in the current U.S. poverty measure, in which the second child adds 17 percent to the two- person (one-adult/one-child) poverty threshold, the third child adds 31 percent, the fourth child adds 23 percent, and the fifth child adds 20 percent.21 The type of equivalence scale that we recommend for the poverty measure would increase the benefit for a one-adult/one-child family the most for the second child, with declining percentages for each additional child to reflect household economies of scale. Depending on the value of the scale economy factor, our proposed equivalence scale would add an average of 27 percent (using a factor of 0.75) or an average of 22 percent (using a factor of 0.65) to the basic unit benefit for each additional child. Trends in Need Standards and Benefits Looking at trends over the last two decades, it appears that relatively few states have increased their need standard or maximum benefit to keep up with inflation. Relatively few states have statutes that require them to adjust their standards for inflation, and even those states that have such requirements do not always heed them in periods of budget stringency. As of 1988, seven states had statutory requirements for adjusting their need standard to keep up with inflation, one state had a requirement to update its benefit level, and three 20 Note that the ratios of the benefit for an added child to the benefit for the basic AFDC unit are not comparable to equivalence scales expressed in terms of a one-person family or house-hold. Such scales can be constructed for January 1994 from U.S. House of Representatives (1994:368-369). 21 The average value added per child to the U.S. poverty threshold for the two-person (one- adult/one-child) family is 23 percent, the same as the median value for the 50 states and the District of Columbia.

Next: Conclusions »
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!