National Academies Press: OpenBook

Measuring Poverty: A New Approach (1995)

Chapter: Design

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Suggested Citation:"Design." National Research Council. 1995. Measuring Poverty: A New Approach. Washington, DC: The National Academies Press. doi: 10.17226/4759.
Page 395

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APPENDIX B 395 self-employment income, farm self-employment income, Social Security or railroad retirement, and Supplemental Security Income (SSI). Sources obtained for the consumer unit as a whole include worker's compensation and veterans' benefits; public assistance; interest on savings accounts and bonds; regular income from dividends, royalties, and estates and trusts; income from pensions or annuities from private and public sources; net income or loss from roomers or boarders; net income or loss from rental property; income from alimony, child support, and regular contributions from persons outside the consumer unit; lump-sum payments; money from the sale of household furnishings or other belongings; other money income (e.g., scholarships, foster care payments); and refunds (e.g., from federal income tax or insurance policies). • Taxes Data are obtained at the second and fifth interviews on tax deductions from the last paycheck of each consumer unit member aged 14 and over (federal income tax, state and local income tax, and Social Security payroll tax and deductions for pensions). Data are also obtained for the prior 12 months on payments by the consumer unit as a whole for additional federal income tax (beyond that withheld from earnings), additional state and local taxes, property taxes not reported elsewhere, and other taxes not reported elsewhere. Sales taxes are calculated from information provided for individual expenditures and are included in the component expenditures. CPS March Income Supplement The CPS is a continuing survey, begun in the 1940s. Income questions were first asked in 1945 (for income year 1944).2 Since 1956 the income questions have been part of the supplement each March; since 1970 the March supplement has also included questions on work experience in the prior year. (Supplements in other months cover such topics as voting behavior, educational enrollment, and fertility and marital history.) BLS sponsors the core of the CPS, which is designed to provide monthly unemployment rates. The Census Bureau conducts the survey and sponsors the March income supplement. The total budget for the CPS is about $28 million per year, of which about $2 million to $3 million is for the March supplement. (For information on the March CPS, see Bureau of the Census, 1992b; and Citro, 1991.) Design The CPS has a rotating design. Households are in the sample for 4 months, out of the sample for 8 months, and in again for 4 months. Hence, there is 50 2 Since about 1960, however, the income data for 1944 and 1945 and the nonfarm income data for 1946 have been omitted from the Census Bureau's P-60 series money income reports.

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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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