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Pages 64-81

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From page 64... ... , further research is needed to probe the conceptual issues and to explore potential approaches to including childcare in the resource calculations for households with children that do not use paid care or that use a mix of paid and unpaid care. One possible approach to be explored by the Census Bureau for valuing unpaid childcare, for example by parents, family, or friends, would be to assume that the value of the care is equal to the need level established in the threshold. Read the entire page →
From page 65... ... On the resource side, the household would receive credit for the imputed value of any childcare subsidy or tax credit reported, as well as the value of any unpaid care received from friends or family or that the household itself provides, valued at the CCDF reimbursement rate for in-home childcare for a child of the given age in that geographic area. Clearly, moving toward such an ideal measure of childcare will require considerable future research. Read the entire page →
From page 67... ... As depicted in Figure 5-2, housing costs subsume an even higher share of monthly income for households with low incomes. Given its magnitude, the methodological choice for handling housing in a poverty measure -- both in terms of establishing basic need and including housing in the estimate of resources -- can have a major impact on who is counted as poor, on geographic variation in poverty rates, and on the overall poverty rate. Read the entire page →
From page 68... ... While the basic need for shelter is the same for all households of the same size and composition, the resource calculation should ideally reflect the fact that homeowners have an asset (a home) that delivers a flow of rental FIGURE 5-2 Housing costs, as a percentage of income, for households with income less than 200 percent of the official poverty level. Read the entire page →
From page 69... ... Any imputation of implicit rental income should also take into account and deduct the user costs incurred by home ownership (e.g., property taxes, maintenance and repairs, and mortgage interest) Read the entire page →
From page 70... ... As part of the 2021 SPM revisions, the Census Bureau shifted from centering the thresholds at the 33rd percentile to 83 percent of the average expenditures of CUs within the 47th–53rd percentiles (Fox and Burns, 2021a) Read the entire page →
From page 71... ... Recommendation 5.2: The Census Bureau should evaluate the impact of adjusting Fair Market Rent (FMR) values for recent movers and determine whether FMRs are an appropriate measure of hous ing need in the Principal Poverty Measure. Read the entire page →
From page 72... ... One would expect greater economies of scale for shelter and utility costs than for food and clothing. In the past, the Census Bureau has deemed that separate equivalence scales would not materially change poverty estimates.8 Still, there are likely 8 Renwick and Garner (2018) Read the entire page →
From page 73... ... One minor complication of using FMRs to adjust for economies of scale in shelter and utilities is that the HUD calculation is based on number of bedrooms, not household size. The Census Bureau will need to research and test approaches for mapping FMRs based on number of bedrooms needed into PPM shelter units based on household size. Read the entire page →
From page 74... ... to adjust for differences in shelter and utility costs for consumer units of varying sizes, and then create a new equivalence scale specific to food and clothing. The Census Bureau should research whether using separate equivalence scales for housing still makes little difference for a version of the Principal Poverty Measure using the geographically specific adjustments to consumer unit sizes embedded in the FMRs. Read the entire page →
From page 75... ... Recommendation 5.5: Principal Poverty Measure thresholds should continue to reflect geographic dif ferences in housing costs. Geographic adjustments should apply to owners and renters based on official Fair Market Rents, which are set at the individual metropolitan area or nonmetropolitan county level. Read the entire page →
From page 76... ... But if the Census Bureau were to pursue one of the two options that do not directly use FMRs, the panel recommends that rental equivalences be capped at FMRs, since the difference between the FMR value and the rental equivalence of a home may not easily convert into disposable income. 15 For discussion of the merits of a user cost/out-of-pocket approach versus rental equivalence, see Garner and Verbrugge (2009) Read the entire page →
From page 77... ... This would allow homeowners with larger and more expensive homes to be credited with higher gross rents while ensuring that the net implicit rents estimates do not exceed the FMR value. For consistency with the treatment of medical care, the panel recommends capping the rental equivalence at the FMR value for household size while acknowledging that the Census Bureau should research the implications of each approach. Read the entire page →
From page 78... ... Also, if the Census Bureau accounts for within-market differences in the size and quality of homes in its estimates of rental equivalence, then it should similarly allow user costs to vary with home size and value. User costs should be capped at the value of the rental equivalence, so net implicit rental income cannot be negative. Read the entire page →
From page 79... ... RECOMMENDATION 5.9: In assigning the value of in-kind housing assistance to Principal Poverty Measure unit resources, the calculation should be simplified by estimating the expected subsidy as Fair Market Rent value minus the greater of 30 percent of adjusted income or 10 percent of gross income. This approach essentially mirrors that currently used by the Census Bureau, described by Renwick and Mitchel (2015) Read the entire page →
From page 81... ... . This chapter reviews the strengths and shortcomings of the current data infrastructure and the value of investing in that infrastructure; identifies additional data needs created by the new PPM specifications; examines opportunities for improving relevant data sources for the PPM; and discusses statistical issues in estimating the PPM thresholds and resources. Read the entire page →

From page 64...

... , further research is needed to probe the conceptual issues and to explore potential approaches to including childcare in the resource calculations for households with children that do not use paid care or that use a mix of paid and unpaid care. One possible approach to be explored by the Census Bureau for valuing unpaid childcare, for example by parents, family, or friends, would be to assume that the value of the care is equal to the need level established in the threshold.