National Academies Press: OpenBook

Measuring Poverty: A New Approach (1995)

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Suggested Citation:"Content." National Research Council. 1995. Measuring Poverty: A New Approach. Washington, DC: The National Academies Press. doi: 10.17226/4759.
Page 398
Suggested Citation:"Content." National Research Council. 1995. Measuring Poverty: A New Approach. Washington, DC: The National Academies Press. doi: 10.17226/4759.
Page 399

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APPENDIX B 398 are tracked and interviewed subsequently if they return to a family setting. The PSID experienced a large sample loss—24 percent—at the initial interview in 1968, but additional sample loss dropped to 8 percent of the eligible families at the second interview, and it was only 1-2 percent at each interview thereafter (Survey Research Center, 1989: Table 2a). The initial large sample loss was partly due to the PSID sample design, which originally included a national probability sample of about 2,900 families and a sample of about 1,900 low-income families drawn from the sample used for the 1967 SEO. Several factors increased the nonresponse from the SEO sample, including the requirement by the Census Bureau that SEO families sign a release allowing their names to be given to the PSID (Hill, 1992). The extent to which attrition introduces bias into estimates from the PSID is not clear. Several studies in the 1980s found that, although cumulative sample loss was over 50 percent (52% by 1980 and 58% by 1985), there was no evidence that attrition correlated with individual characteristics in a way that would produce biased estimates. For example, Becketti et al. (1988:490) found no evidence that attrition ''has any effect on estimates of the parameters of the earnings equations that we studied." Duncan, Juster, and Morgan (1984) also found that response rates were just as high in the PSID among families in the lowest income decile as in the middle or upper income deciles (see also Curtin, Juster, and Morgan, 1989, and other studies cited in Hill, 1992). However, Duncan and Rodgers (1991) found bigger differences in poverty rates for white children between the PSID and the March CPS in 1981-1986 than in 1967-1971 (the PSID rates were lower in both periods). They attribute the finding to the fact that, as of 1986 (before the addition in 1990 of a new Hispanic sample), the PSID represented only about one-third of the Hispanic children reported in the CPS while it represented all non-Hispanic white and black children. One indicator of data quality is that about 95 percent of heads and spouses provide "adequate responses" for labor and asset income so that the responses do not have to be edited. The percentage of adequate responses has been in the range 94-98 percent over the life of the survey (Survey Research Center, 1989: Table 5). Content The PSID collects the most detailed information about family heads and, since the late 1970s, about wives and cohabitors. The core content includes • demographic characteristics; • employment information—current and employment history in past year; • income sources and amounts for the head for the past calendar year

APPENDIX B 399 (including which months received) from wages or salaries; bonuses, overtime, tips, or commissions; professional trade or practice; farming or market gardening; roomers or boarders; extra jobs; rent; dividends, interest, trust funds, or royalties; AFDC; SSI; other welfare; Social Security (including separately listed amounts for other family members); veterans' benefits; other retirement pay, pensions, or annuities; unemployment compensation; worker's compensation; alimony; child support; help from relatives; and anything else; • income sources and amounts for the spouse for the past calendar year (including which months received) from earnings; unemployment compensation; worker's compensation; and interest, welfare, pensions, child support, or any other source (with each source to be separately listed); • income sources and amounts for other individual family members aged 16 and over for the past calendar year (including which months received) from earnings from first and second jobs; and any other income such as pensions, welfare, interest, gifts, or anything else (with each source to be separately listed);3 • income earned by individual family members under aged 16 and family lump-sum income (e.g., inheritance or insurance settlements) in past calendar year; • public assistance—food stamps (amount in past calendar year and specific months in which received), housing subsidies, energy assistance, and Medicaid or other welfare medical services; • estimate of federal taxes paid (based on information about income, exemptions, dependents living outside the household, whether itemized, mortgage interest payments, and property taxes); • housing, including current value, remaining mortgage principal, monthly mortgage payment for owned home, monthly rent, and annual utility costs; • estimate of annual food costs (in home and away from home) from reports of average weekly expenditures; • financial assistance to people living elsewhere; • housework time; • geographic mobility; • socioeconomic background; • health, religion, and military service; and • county-level data (unemployment rate, wage rate for unskilled workers, labor market demand conditions). Event histories (dated to the month) are recorded for demographic, employment, and poverty characteristics. Supplemental topics have included 3 It is difficult to assign a value to the number of income sources collected in the PSID, because of the question format for family members other than the head, which asks for particular sources to be named without going through a specified list.

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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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