An Updated Measure of Poverty (Re)Drawing the Line (2023) / Chapter Skim
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This study, requested by the Census Bureau, assesses the strengths and weaknesses of the SPM and provides recommendations for updating the methodology to more accurately reflect the basic needs of, and resources available to, households. The Census Bureau recognizes the need to periodically revisit SPM construction to account for changes in the population's consumption patterns, social and economic norms, perceptions of wellbeing, and the goods and services needed to participate fully in the economy.
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. RECOMMENDATION 2.11: Due to its vital role in tracking the effects of public policies and programs on the size and composition of the population living in or near poverty, and its resulting status as the preferred measure of many researchers and policy makers, the Supplemental Poverty Measure should be elevated to the nation's headline poverty statistic and renamed accordingly (e.g., to the Principal Poverty Measure)
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RECOMMENDATION 2.5: The Census Bureau and Bureau of Labor Statistics should conduct a review of the basis for the 20-percent multiplier. This review should include: • Assessing whether a multiplier set at a different level better matches current spending patterns on the basket of goods currently included in the Supplemental Poverty Measure threshold; • Evaluating the spending categories included in the threshold multiplier; • Recalculating the multiplier based on the new basic needs bundle; and • Developing a plan for updating the multiplier for future changes in spending patterns.
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RECOMMENDATION 3.1: For the Principal Poverty Measure, the current approach to medical spend ing in the Supplemental Poverty Measure should be replaced with one that includes health insurance in the estimates of both the needs threshold and resources. The research on and development of a medical-care-inclusive poverty measure is sufficiently advanced that the Census Bureau could immediately begin implementation of this recommendation.
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, a basic childcare need should be included in the threshold. In the near future, the Census Bureau should conduct research to develop and implement a methodology for defining the amount of this basic childcare need, varying by age and number of children, geographic location, and hours of paid care used.
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RECOMMENDATION 4.3: To accurately assess a household's ability to meet its needs, for households that have children and that use paid childcare, in the near future, the Census Bureau should research, develop, and implement a methodology for valuing assistance received by the household for childcare, so that it can enter into the calculation of the household's available resources. Even with the proposed expansions, a poverty measure may still be incomplete given that all young children require care -- including school-aged children outside of school hours -- even if childcare is not obtained through the market.
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value for the particular family size, minus user costs -- implying that implicit rental income will automatically be capped at the housing cost threshold. The Census Bureau should also analyze how the estimated implicit rent would differ under the FMR approach compared with alterna tive approaches of estimating rental equivalence based on self-reported home value or average American Community Survey rents for units of the same structure type in the local market.
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In particular, the Census Bureau should aggressively explore the strategy of using federal and state administrative records to improve models for imputation for item nonresponse, including nonreporting of receipt as well as amounts. The expanded use of administrative data, the depth of geographic adjustments for housing, and the common need for geographic and race/ethnicity detail make it challenging to produce a public-use microdata file for researchers to use in evaluating the PPM.
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RECOMMENDATION 6.5: For calculating Principal Poverty Measure thresholds, the Census Bureau and Bureau of Labor Statistics should use all consumer units captured in the Consumer Expenditure Survey (CE; not just those with children) to determine the median values for basic needs categories (e.g., food, clothing, internet)
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The media chose to highlight the SPM findings, which more accurately portrayed the efforts of the government to bolster families' economic wellbeing during the pandemic.1 The SPM, which is published annually by the U.S. Census Bureau working closely with the U.S.
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have implemented variations on the SPM to assess the effectiveness of specific policies adopted at the state and local levels. The Census Bureau's budget justification states: "The Supplemental Poverty Measure uses new data and 3 For an overview of alternative approaches to measuring poverty in various countries, see Atkinson (2019)
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Table A-2 provides specifications for the SPM, notes differences from the OPM and from the recommendations in the National Academies' 1995 report, and indicates changes that the Census Bureau, working with BLS, has made to the SPM to date. 7 The literature contains many detailed comparisons of the OPM, the SPM, and other poverty and wellbeing statistics -- including resource versus consumption-based concepts -- some of which require very different data sources to construct.
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. Prioritization of these three areas is further motivated by their prominent 9 Throughout this report, "household" is used as shorthand for the SPM resource unit, which is not quite the same as a household (the OPM resource unit differs even more from a household -- see Table 2.1)
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