National Academies Press: OpenBook

Measuring Poverty: A New Approach (1995)

Chapter: Summary

« Previous: Implications of Updating for Costs and Caseloads
Suggested Citation:"Summary." National Research Council. 1995. Measuring Poverty: A New Approach. Washington, DC: The National Academies Press. doi: 10.17226/4759.
×
Page 380
Suggested Citation:"Summary." National Research Council. 1995. Measuring Poverty: A New Approach. Washington, DC: The National Academies Press. doi: 10.17226/4759.
×
Page 381
Suggested Citation:"Summary." National Research Council. 1995. Measuring Poverty: A New Approach. Washington, DC: The National Academies Press. doi: 10.17226/4759.
×
Page 382

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 380 Clearly, each state will need to analyze the possible implications for program costs and caseloads of basing its need standard on poverty thresholds that are developed under the proposed updating procedure. Given the differences among states in methods for determining eligibility and benefits, the states may well come to different conclusions. Effects of Updating on Program Incentives Some states that have a maximum benefit below their need standard provide higher benefits to families with other income, such as earnings or child support, through a ''fill-the-gap" method of calculating benefits. The details of this method vary across states, but the essence is that families are allowed to retain other income without having their AFDC benefit reduced, so long as the total of their benefit and other income does not exceed the need standard (see Larin and Porter, 1992: App). To illustrate, consider a state with a need (and payment) standard and maximum payment of $400 per month (i.e., the state pays 100% of need). In this state, a newly eligible family that has $200 of earnings will receive only $200 in AFDC, as the family's earnings will be subtracted in full from the need standard. But in another state, one that has a maximum benefit of $400 per month but a need (and payment) standard of $600 per month and that allows families to fill the gap, the same family will receive an AFDC benefit of $400 because the family's $200 in earnings will be subtracted from the (higher) need standard. The fill-the-gap approach to benefit calculation is a way to provide incentives to working families. Hence, states that want to provide such incentives may find it attractive to base their need standard on poverty thresholds that are developed under the proposed updating procedure. Summary We have offered a number of reasons that the use of the proposed poverty measure by the states for their AFDC need standard could be advantageous and some areas of concern, principally involving possible effects on program costs and caseloads. We do not want our discussion of budgetary implications to be misinterpreted. We do not intend to argue against the adoption of need standards for the AFDC program that are updated in real terms; indeed, from the perspective of the low-income population, there is much to recommend such a step by the states. However, assistance programs must balance a number of objectives and contend with a number of constraints. We urge that program designers fully evaluate all of the ramifications before deciding to adopt for program purposes a measure that is proposed for statistical purposes. For the AFDC need standard, it is important to note that the states, under current law, have considerable latitude with which to attenuate the link of the

THE POVERTY MEASURE AND AFDC 381 need standard to eligibility and benefits, by such strategies as setting the payment standard at a fraction of the need standard. Hence, considerations of possible adverse consequences for program costs and caseloads should perhaps weigh less heavily than the advantages of using the proposed poverty measure to set AFDC standards of need. In conclusion, we believe that, on balance, the use of the proposed poverty concept for the purpose of determining AFDC need standards would be beneficial, even if individual states set their need (or benefit) standard at different fractions of the poverty threshold. Use of the poverty thresholds that are developed under the proposed procedure would be generally consistent with the AFDC definition of income and would recognize important interstate differences in living costs within a common framework that would provide a benchmark for evaluating the adequacy of eligibility levels across states.

THE POVERTY MEASURE AND AFDC 382

Next: APPENDICES »
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!