Income Data for Policy Analysis: A Comparative Assessment of Eight Surveys. Family Concept

12/23/2008

The response unit in the NHIS is the family, and families are defined to include unmarried partners and foster children. Family income is collected as a single amount for the entire family. In developing the NHIS estimates of income for comparison with the other surveys, we separated unmarried partners and foster children from the NHIS family and apportioned family income among the two or more family units created from each NHIS family and which conform to the CPS family definition.42  By comparing the income and poverty estimates that we prepared using the CPS family definition with estimates obtained from the original data, we can assess the impact of using the NHIS versus CPS family definitions to group individuals for the purposes of estimating family income.

MEPS also uses the family as its response unit and defines the family in the same way as the NHIS. However, in order to post-stratify the sample weights to the CPS poverty distribution, AHRQ (or its MEPS survey contractor) defines CPS families within the broader MEPS families. Income, which is reported at the person level, can be aggregated to either family definition using alternative family identifiers on the public use file. We used the CPS family to prepare the income estimates reported in Chapter IV, but by preparing an alternative set of estimates based on the MEPS/NHIS family definition, we can assess the impact of using one versus the other family definition just as we do with the NHIS.

Our estimates of the impact of the NHIS versus CPS family definitions based on the NHIS and MEPS are remarkably similar. In both surveys we find that the NHIS family definition reduces the number of persons in poverty by 2.6 million and reduces the poverty rate by 0.9 percentage points (Table V.1).43 There is no impact in either survey on the percentage of persons between 100 and 200 percent of poverty, which means that the number of people who were moved above the poverty line by the NHIS family concept is offset by the number of people who were moved beyond 200 percent of poverty. Most of the upward shift is observed in the top category—that is, among people above 400 percent of poverty, where the broader family concept adds 2.3 million to the number in the NHIS and 1.4 million to the number in MEPS.

We also assessed the impact of the NHIS family definition by demographic characteristics in both surveys. For the NHIS, the reduction in the poverty rate and the number of poor was about twice as great among women as among men (Table V.2). The reduction in the poverty rate was greatest among children under 18 (1.3 percentage points) and least among the elderly (0.3 percentage points). The reduction in the number of poor was greatest among persons 18 to 64 at 1.6 million, as this is the largest age group, but the reduction among children was still 0.9 million. The reduction in the poverty rate was essentially the same across four race/ethnicity groups at around a percentage point.

We find generally similar patterns for MEPS, but the broader family concept appears to produce somewhat bigger declines in the poverty rate among blacks and Hispanics than among whites and others (Table V.3). With MEPS we produced consistent measures of family composition for both family concepts, so we were able to examine differential effects of the family concept by family composition. For single parents and their children we see the impact of adding an unmarried partner’s income.44The poverty rates for single parents and their children decline by five to six percentage points with the NHIS/MEPS family definition.

TABLE V.1: COMPARISON OF THE CPS AND NHIS/MEPS FAMILY CONCEPTS
  NHIS MEPS
Family Income as Percent of Poverty CPS Family NHIS Family Change CPS Family MEPS Family Change
Percent of Persons (Total Percent) 100.0 100.0   100.0 100.0  
(Total Percent)Under 100% 14.7 13.7 -0.9 12.5 11.5 -0.9
(Total Percent)100% to under 200% 19.0 19.0 0.0 18.4 18.4 0.0
(Total Percent)200% to under 400% 30.7 30.9 0.2 31.7 32.1 0.4
(Total Percent)400% or more 35.7 36.4 0.8 37.4 37.9 0.5
Number of Persons(millions)    (Total Persons) 283.7 283.9 0.2 283.3 283.3 0.0
(Total Persons)Under 100% 41.6 39.0 -2.6 35.3 32.7 -2.6
(Total Persons)100% to under 200% 53.9 53.8 -0.1 52.1 52.2 0.1
(Total Persons)200% to under 400% 87.1 87.7 0.6 89.8 90.9 1.1
(Total Persons)400% or more 101.2 103.4 2.3 106.0 107.4 1.4

Source: Mathematica Policy Research, from tabulations of poverty status in calendar year 2002 from the 2003 NHIS and the 2002 Full-year Consolidated MEPS-HC.

TABLE V.2: COMPARISON OF THE CPS AND NHIS FAMILY CONCEPTS
Demographic Characteristic Percent Poor Number Poor (millions)
CPS Family NHIS Family Change CPS Family NHIS Family Change
Gender
  Male 13.3 12.6 -0.6 18.4 17.5 -0.9
  Female 16.0 14.8 -1.2 23 .2 21.4 -1.7
Age
Under 18 19.9 18.6 -1.3 14.3 13.4 -0.9
  18 to 64 13.2 12.3 -0.9 23.5 21.9 -1.6
  65 and older 11.0 10.7 -0.3 3.8 3.7 -0.1
Race/Ethnicity
White non-Hispanic 9.8 8.9 -0.9 19.1 17.4 -1.7
  Black non-Hispanic 26.2 25.0 -1.1 9.1 8.8 -0.4
  Hispanic 28.0 26.8 -1.2 11.0 10.6 -0.4
  Other 16.3 15.4 -0.8 2.3 2.2 -0.1

Source:Mathematica Policy Research from the 2003 NHIS

TABLE V.3: COMPARISON OF THE CPS AND MEPS FAMILY CONCEPTS
Demographic Characteristic Percent Poor Number Poor (millions)
CPS Family MEPS Family Change CPS Family MEPS Family Change
Gender
  Male 11.2 10.5 -0.7 15.5 14.5 -1.0
  Female 13.7 12.6 -1.1 19.9 18.2 -1.6
Age
Under 18 17.4 15.7 -1.7 12.5 11.3 -1.2
  18 to 64 10.7 9.9 -0.8 19.0 17.6 -1.4
  65 and older 11.3 11.2 0.0 3.8 3.8 0.0
Race/Ethnicity
White non-Hispanic 8.3 7.6 -0.7 15.9 14.7 -1.3
  Black non-Hispanic 24.9 23.5 -1.5 8.8 8.3 -0.5
  Hispanic 22.4 20.7 -1.8 8.7 8.1 -0.7
  Other 11.3 10.4 -0.9 1.9 1.7 -0.1
Family Composition
Single (18 or older) 17.5 17.0 -0.5 8.8 7.4 -1.5
  Childless couple 5.1 5.2 0.0 3.4 3.4 0.0
  Single parent 32.7 27.3 -5.4 4.2 3.5 -0.7
    Child of single parent 39.8 33.9 -6.0 8.0 6.8 -1.2
  Couple with children 6.8 6.8 0.0 3.7 3.7 0.0
    Child of couple 7.6 7.6 0.0 3.8 3.8 0.0
  Other 11.9 11.5 -0.5 3.5 4.2 0.7

Source: Mathematica Policy Research from the 2002 Full-year Consolidated MEPS-HC.

Finally, by creating a somewhat smaller number of families with a slightly larger average size, the broader family concept increases family incomes across the income distribution. This can be seen by comparing the boundaries between family income quintiles (that is, the 20th, 40th, 60th, and 80th percentiles) between the two family concepts. With the broader family definition, the boundaries between family income quintiles increase by $1,000 to $2,000 in both surveys (Table V.4).

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