The methodological innovations in the SPM allow an opportunity to examine the contours of child poverty under different definitions of the concept of resource poverty. This brief explored the characteristics of children in poverty under various poverty definitions, and in particular looked at the characteristics of those who are poor under the official measure but not poor under the SPM (the “lifted out” group), those who are poor under the SPM but not under the official measure (the “thrown in” group), and those who are poor no matter what definition of poverty is used (the “core poor” group).
Children who are “thrown into” poverty by the SPM methodology tend to live in families that have higher cash resources at their disposal, larger non-discretionary expenses (especially medical expenses), and lower utilization of safety net programs. The large differences in medical expenditures found do not seem to be primarily due to the health status of family members or the presence of individuals with disabilities or health challenges. Rather, the role of health insurance seems to play the largest role in explaining the high medical expenses that drive this group into poverty, as those with private health insurance have substantially greater medical expenses than those with other types of insurance or no insurance, and the thrown-in group is particularly likely to have private health insurance.
Children who are “lifted out” of poverty under the SPM methodology but who are poor under the OPM live in families that have average pretax incomes fairly close to the poverty threshold. The combination of their relatively low expenses and more comprehensive utilization of social safety net programs push them above the poverty threshold. The powerful role of the social safety net in alleviating poverty stands out for this group, as the SPM’s more comprehensive definition of resources accounts for the fact that these groups are receiving assistance to help them meet their core needs. Of the safety net benefits added under the SPM definition, the inclusion of SNAP and EITC benefits largely explains why a majority of this group is lifted out of poverty under the SPM definition. The counting of cohabiter income also is important for understanding how this group of children is lifted out of poverty under the new measure.
The core group of children who are poor under both measures is very disadvantaged, living in families with very low pretax cash income and less employment and wage income. Families’ receipt of safety net income is not sufficient to pull them above either the OPM or SPM poverty threshold. Although they are not lifted out of poverty by the SPM, this group is less likely to be considered in “deep” poverty under the SPM, as the benefits included in the measure move them somewhat closer to the poverty threshold. However, these children still look very disadvantaged even after tax and in-kind benefits are included in family resources, and thus are of particular concern from a policy perspective.