An Updated Measure of Poverty (Re)Drawing the Line (2023) / Chapter Skim
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Appendix A: Background and Specification of the OPM and the SPM
Appendix A: Background and Specification of the OPM and the SPM
Pages 113-122
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From page 113... ...
through the changes made in 2021, including commentary and selected references. • Table A-1 provides specifications for the OPM, with observations from the panel staff and document changes (virtually none)
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From page 114... ...
Census Bureau (annually) : Consumer Income P-60 Publication Series and Poverty Thresholds Component Current Definition Commentary Changes Since Inception Unit for which Family: Two or more people related by blood, Does not recognize increase in cohabitation None Poverty Measured marriage, or adoption living in same household or sharing of household costs among Unrelated Individual: Person living alone or with unrelated people.
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From page 115... ...
programs or nondiscretionary expenses Child Support and Alimony (for custodial parent) Private Disability and Retirement Cash Transfers: AFDC/TANF Social Security Retirement/Disability SSI Unemployment Insurance Veterans Payments, Workers Compensation Treatment of Medical Thresholds implicitly include small amount for OPM ignores expansion of medical care None Care Costs/Benefits medical out-of-pocket spending; resources ignore benefits/costs since the 1960s medical care benefits/costs Treatment of Taxes Thresholds are after taxes (except for property and OPM ignores major changes in tax programs None sales taxes implicitly included in the multiplier)
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From page 116... ...
aAbbreviations used in table: ACS, American Community Survey; AFDC/TANF, Aid to Families with Dependent Children/Temporary Assistance for Needy Families; CPI-U, Consumer Price Index for All Urban Consumers; CPI-U-RS, CPI-U Research Series; CPS-ASEC, Current Population Survey Annual Social and Economic Supplement; EITC, Earned Income Tax Credit; SIPP, Survey of Income and Program Participation; SSI, Supplemental Security Income; USDA, U.S. Department of Agriculture.
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From page 117... ...
, Supplemental Poverty Measure; Bureau of Labor Statistics website, Experimental Poverty Measures Original Differences Thresholds/Threshold Adjustments: Originally, expenditures for all families with 2 children instead of 2 adults and 2 children (although latter still the from National reference unit) ; revised 3-parameter (instead of 2-parameter)
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From page 118... ...
Changes Since 2011/Adopted in 2021 Poverty Threshold Basic necessities: FCSU plus a little more; FCSU Re OPM: SPM recognizes larger bundle of 2021 (implemented beginning with revised Concept set at 30th–36th percentile of spending for families necessities; derives thresholds from actual 2019 thresholds -- see spm_threshold_200520. (consumer units, CUs)
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From page 119... ...
0.7 Re MP: Subsequent research determined SPM Housing tenure: Separate thresholds developed for 3-parameter scale gave more intuitive results homeowners without a mortgage, homeowners with a than MP 2-parameter scale 5 (adults + 0.7 * mortgage, and renters paying rent, using average of kids)
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From page 120... ...
Child support paid by noncustodial parent Treatment of Medical Consistent Treatment: Re OPM: SPM captures effects of medical None Care Costs/Benefits Thresholds do not include medical care expenditures care policy changes that reduce (increase) Resources subtract health insurance premiums and MOOP spending, but does not explicitly value other MOOP costs (copays, deductibles, other)
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From page 121... ...
for Like OPM, SPM measures have been Income questions: 5 years constructed with many data sets -- e.g., 1948: Wages and salaries; all other sources Resources: CPS-ASEC -- sample of 100,000 ACS for small-area estimates and SIPP for 1949: Self-employment asked separately households interviewed in February–April following part-year estimates; SPM measures have also 1950: Farm and nonfarm self-employment income reference year (see Data Source Entry in been constructed by states and cities (e.g., asked separately Table A-1) California, NYC, Wisconsin)
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From page 122... ...
; ACS and SIPP after imputation (which itself can create error) of have similar quality problems amounts for respondents reporting receipt; problem of misleadingly low or negative incomes; CE data also problematic aAbbreviations used in table: ACA, Affordable Care Act; ACS, American Community Survey; AFDC/TANF, Aid to Families with Dependent Children/Temporary Assistance for Needy Families; BLS, Bureau of Labor Statistics; CE, Consumer Expenditure Survey; CPI-U, Consumer Price Index for All Urban Consumers; CU, consumer unit; FCSU, food, clothing, shelter, utilities; FCSUti, food, clothing, shelter, utilities, telephone, internet; LIHEAP, Low Income Home Energy Assistance Program; MOOP, medical out-of-pocket; MSA, Metropolitan Statistical Area; NSLP, National School Lunch Program; OPM, Official Poverty Measure; SSDI, Social Security Disability Insurance; SSI, Supplemental Security Income; SNAP, Supplemental Nutrition Assistance Program; WIC, Special Supplemental Nutrition Program for Women, Infants, and Children.
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