Consensus Study Report
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This study was supported by the U.S. Census Bureau. Support of the work of the Committee on National Statistics is provided by a consortium of federal agencies through a grant from the National Science Foundation (award number SES-1560294) and several individual contracts. Any opinions, findings, conclusions, or recommendations expressed in this publication do not necessarily reflect the views of any organization or agency that provided support for the project.
International Standard Book Number-13: 978-0-309-69739-2
International Standard Book Number-10: 0-309-69739-5
Digital Object Identifier: https://doi.org/10.17226/26825
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Suggested citation: National Academies of Sciences, Engineering, and Medicine. 2023. An Updated Measure of Poverty: (Re)Drawing the Line. Washington, DC: The National Academies Press. https://doi.org/10.17226/26825.
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PANEL ON EVALUATION AND IMPROVEMENTS TO THE SUPPLEMENTAL POVERTY MEASURE
JAMES P. ZILIAK, Department of Economics, University of Kentucky, Chair
RANDALL K.Q. AKEE, Department of Public Policy and Department of American Indian Studies, University of California, Los Angeles
SARAH E. BOHN, Public Policy Institute of California
INDIVAR DUTTA-GUPTA, Center for Law and Social Policy
INGRID GOULD ELLEN, Wagner Graduate School of Public Service, New York University
BRADLEY L. HARDY, McCourt School of Public Policy, Georgetown University
DAVID S. JOHNSON, Institute for Social Research, University of Michigan
SANDERS KORENMAN, Austin W. Marxe School of Public and International Affairs, City University of New York
HELEN G. LEVY, Gerald R. Ford School of Public Policy, University of Michigan
JORDAN D. MATSUDAIRA, Teachers College, Columbia University
JOSÉ D. PACAS, Kids First Chicago
MICHELE VER PLOEG, Economic Research Service, U.S. Department of Agriculture
JANE WALDFOGEL, School of Social Work, Columbia University
BARBARA L. WOLFE, Institute for Research on Policy, University of Wisconsin–Madison
CHRISTOPHER D. MACKIE, Study Director
CONSTANCE F. CITRO, Senior Scholar
ANTHONY S. MANN, Program Associate
COMMITTEE ON NATIONAL STATISTICS
ROBERT M. GROVES, Georgetown University, Chair
LAWRENCE D. BOBO, Harvard University
ANNE C. CASE, Princeton University, Emerita
MICK P. COUPER, University of Michigan
DIANA FARRELL, JPMorgan Chase Institute, Washington, DC
ROBERT M. GOERGE, The University of Chicago
ERICA L. GROSHEN, Cornell University
DANIEL E. HO, Stanford University
HILARY HOYNES, University of California, Berkeley
DANIEL KIFER, The Pennsylvania State University
SHARON LOHR, Arizona State University, Emerita
JEROME P. REITER, Duke University
NELA RICHARDSON, ADP Research Institute, New York
JUDITH A. SELTZER, University of California, Los Angeles, Emerita
C. MATTHEW SNIPP, Stanford University
ELIZABETH A. STUART, Johns Hopkins University
MELISSA CHIU, Director
BRIAN HARRIS-KOJETIN, Senior Scholar
Dedication
This report is dedicated to the memory of our friend and inspiration, Rebecca Blank, who passed away on February 17, 2023. Becky was President-Elect of Northwestern University and immediate past Chancellor of the University of Wisconsin–Madison. She previously served as Dean of the Ford School of Public Policy at the University of Michigan and co-director of the National Poverty Center, and Professor of Economics at Northwestern University where she was director of the Joint Center for Poverty Research. Becky served the nation during three presidential administrations, including as Deputy Secretary of the U.S. Department of Commerce under President Obama and as a member of President Clinton’s Council of Economic Advisers. Becky was one of the nation’s most influential scholars on poverty and inequality, who made numerous contributions to both research and policy. She also had an uncanny ability to synthesize huge volumes of research that simultaneously provided a coherent discussion of the current state of knowledge, and also prodded scholars and policy makers to delve more deeply to examine what we need to know to improve the wellbeing of our most vulnerable citizens. Becky was a member of the groundbreaking 1995 National Research Council panel on measuring poverty, led the efforts at the Department of Commerce to implement the Supplemental Poverty Measure, and served as the review coordinator of this report until her untimely passing. We will miss her infectious energy, keen insights, and friendship.
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Acknowledgments
Nearly three decades have passed since the seminal National Academies of Sciences, Engineering, and Medicine’s report Measuring Poverty: A New Approach set in motion a research agenda on how income poverty is conceived of and measured in the United States. Standing on the shoulders of Mollie Orshansky, a giant of poverty measurement, the 1995 panel recommended changes to the original Orshansky approach—both in how the poverty line is drawn and in how resources available to families to meet basic budgetary needs are measured. In the ensuing decades, great conceptual and data-collection progress has been made to produce annual estimates of what is now known as the Supplemental Poverty Measure (SPM). This progress has been spearheaded by the tremendous efforts of staff at the Census Bureau and the Bureau of Labor Statistics (BLS)—notably Trudi Renwick, Thesia Garner, Kathy Short, and Liana Fox.
In 2020, the Census Bureau commissioned the National Academies to convene a new panel of poverty experts, to assess the strengths and shortcomings of the current SPM and, if needed, to recommend changes. This report is the culmination of that panel’s work over the past 2 years. It would have been impossible without the time and commitment of many individuals. I wish to express my deep gratitude to the members of the panel who dedicated many hours to meetings, emails, chapter writing, and editing. All members made important contributions to the report; however, I do wish to convey a special thanks to Sarah Bohn, Ingrid Gould Ellen, Sanders Korenman, David Johnson, Jane Waldfogel, and Barbara Wolfe—each of whom provided strategic guidance and writing on key aspects of the panel’s report and recommendations.
I am extremely grateful for the leadership and numerous insightful contributions of the study director, Christopher Mackie, and senior scholar, Connie Citro, from the Committee on National Statistics in crafting and writing the report. I also thank Anthony Mann of the National Academies for facilitating the panel’s online meetings. Additionally, Brian Harris-Kojetin, director of the Committee on National Statistics, provided institutional leadership and overarching guidance about the study process; Kirsten Sampson-Snyder, Division of Behavioral and Social Sciences and Education, coordinated the review process expertly; and Susan Debad provided thorough final editing that improved the readability of the report.
The panel benefited greatly from many outside scholars, who contributed their time and expertise in their formal presentations to the panel, particularly on the challenging topics of medical care, housing, childcare, and the data infrastructure. We especially thank Trudi Renwick and Liana Fox of the Census Bureau, and Thesia Garner of BLS for spelling out in great detail how the current SPM is estimated, and for responding to our numerous clarifying questions along the way. In the treatment of medical care in the SPM we benefited from the insights of
John Creamer of the Census Bureau, Janet Currie of Princeton University, Mustafa Hussein of the University of Wisconsin–Milwaukee, Jeff Larrimore of the Federal Reserve Board of Governors, and Dahlia Remler of Baruch College. In the area of housing, we appreciate the insights of Rebecca Diamond of Stanford University, Chris Herbert of Harvard University, Stephen Malpezzi of the University of Wisconsin–Madison, Stuart Rosenthal of Syracuse University, and Jenny Schuetz of the Brookings Institution. On the topic of childcare, we thank Caroline Danielson of the Public Policy Institute of California and Mary Beth Mattingly of the Federal Reserve Bank of Boston. In the area of data infrastructure, and in particular the treatment of missing and un(der)-reported income, we are grateful for the insights of Chris Bollinger of the University of Kentucky, Linda Gianarrelli of the Urban Institute, Jonathan Rothbaum of the Census Bureau, and Laura Wheaton of the Urban Institute. Although the panel ultimately decided to not pursue explicit recommendations on all topics presented, we do wish to thank Robert Joyce of the Institute for Fiscal Studies for his presentation on the recommendations of the UK poverty panel regarding the treatment of assets and debts in high-frequency poverty measurement, and Michael Burrows of the Census Bureau and Alexandra Murphy of the University of Michigan for their presentations on the transportation challenges facing low-income households. The panel also benefited from public comments on our deliberations, and we extend our gratitude to members of the policy, research, and advocacy communities for their commitment to improving the measure of poverty in America.
James P. Ziliak, University of Kentucky
Chair, Panel on Evaluation and Improvements to the Supplemental Poverty Measure
Reviewers
This Consensus Study Report was reviewed in draft form by individuals chosen for their diverse perspectives and technical expertise. The purpose of this independent review is to provide candid and critical comments that will assist the National Academies in making each published report as sound as possible and ensuring that it meets the institutional standards for quality, objectivity, evidence, and responsiveness to the study charge. The review comments and draft manuscript remain confidential to protect the integrity of the deliberative process.
The panel thanks the following individuals for their review of this report: Marianne P. Bitler, Department of Economics, University of California, Davis; Janet Currie, Princeton School of Public and International Affairs, Princeton University; Caroline Danielson, Public Policy Institute of California; Jonathan D. Fisher, Washington Center for Equitable Growth; Timothy M. Smeeding, Robert M. LaFollette School of Public Affairs, University of Wisconsin–Madison; Laura Wheaton, Urban Institute; and Scott Winship, American Enterprise Institute.
Although the reviewers listed above provided many constructive comments and suggestions that significantly improved the quality of this report, they were not asked to endorse the conclusions or recommendations, nor did they see the final draft of the report before its release. The review of the report was overseen by Robert A. Moffitt, Department of Economics, Johns Hopkins University. He was responsible for making certain that an independent examination of this report was carried out in accordance with the standards of the National Academies and that all review comments were carefully considered. Responsibility for the final content rests entirely with the authoring panel and the National Academies.
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Contents
1.1. Policy and Research Purposes of Poverty Measurement
1.2. Specifying an Economic Poverty Measure
1.3. Motivation for the Study and Charge to the Panel
1.4. Organization of the Report
2 Conceptual Basis of the Supplemental Poverty Measure
2.1. Current Supplemental Poverty Measure Specifications
2.2. Guiding Principles: Desirable Characteristics of a Poverty Measure
2.3. Proposal for a New “Principal Poverty Measure”
2.4. Modernizing Poverty Thresholds
2.5. Alternative Concepts of Resources
3 Challenging Categories: Medical Care
3.2. Treatment of Health/Medical Care in the Supplemental Poverty Measure: Strengths and Limitations
3.3. Incorporating Health into the Principal Poverty Measure
Appendix 3A: Alternative Approaches to Accounting for Medical Care in a Poverty Measure
Appendix 3B: Examples of PPM versus SPM Treatment of Health Insurance and Medical Care
4 Challenging Categories: Childcare
4.1. Background and Motivation
4.2. Current Supplemental Poverty Measure Treatment—Strengths and Weaknesses
5 Challenging Categories: Housing/Shelter
5.1. Conceptual Measurement Goal
5.2. Defining and Estimating Housing/Shelter Needs
5.3. Adjusting Shelter and Utility Thresholds
6.1. The Need for and Benefits of Improving the Data Infrastructure
6.2. Data Needs Created by the Proposed Principal Poverty Measure
6.3. The Current Survey-Based Data Infrastructure
6.4. Administrative Data for Improving Income Estimates
6.5. Data Recommendations for the Principal Poverty Measure
6.6. Opportunities for Improving Estimation of Thresholds
Appendix 6B: SPM/PPM Resource Components—Availability in the CPS-ASEC and ACS
Appendix A Background and Specifications of the OPM and the SPM
