While the income data collected in the ACS compare relatively closely to the income data collected in the CPS, the ACS does not identify families among persons unrelated to the householder. That is, the ACS does not identify unrelated subfamilies (see Chapter III). All persons unrelated to the householder must be treated as unrelated (or secondary) individuals when calculating poverty rates with the ACS. As an unrelated individual, if a person’s own income is below the poverty threshold for a family of size one, then that individual will be considered as poor. This may result in some persons being classified as poor who would not be considered poor if their subfamily membership were taken into account. It may also result in some persons being classified as nonpoor when they would be considered poor as subfamily members.45
|CPS Family||NHIS Family||Change||CPS Family||NHIS Family||Change|
|( Percentile Value)20 %-ile||18,443||20,000||1,557||19,670||21,000||1,330|
|( Percentile Value) 40 %-ile||34,584||35,801||1,217||37,214||38,791||1,577|
|( Percentile Value) 60 %-ile||55,000||57,022||2,022||58,000||59,332||1,332|
|( Percentile Value) 80 %-ile||89,068||90,000||932||87,338||88,313||975|
Source: Mathematica Policy Research, from tabulations of calendar year 2002 income from the 2003 NHIS and the 2002 Full-year Consolidated MEPS-HC.
We used the CPS to estimate the impact of the ACS treatment of unrelated subfamilies. Specifically, we assigned a poverty threshold to each member of an unrelated subfamily, reflecting a family size of one, and we used that person’s own total income to calculate a poverty ratio. We then compared the poverty class of each individual when calculated in this way to the poverty class obtained when membership in the unrelated subfamily was taken into account. Unrelated children under 15 are excluded from the universe for the calculation of official poverty rates, and they have been removed from our survey estimates (see Chapter III). However, they may be treated as poor for some policy applications, so we examine the impact of treating unrelated subfamily members as unrelated individuals with and without including children under 15 within the poverty universe.
Table V.5 presents a cross-classification of CPS unrelated subfamily member by their poverty class when their subfamily membership is taken into account (the row variable) and their poverty class when treated as an unrelated individuals (the column variable). Tabulations are presented for all persons, for children under 15, and for persons 15 and older. The key transitions and net results are summarized in Table V.6.
Overall, we find that if we retain all children under 15, then the impact of treating the 1.2 million unrelated subfamily members in the 2003 CPS as unrelated individuals is to increase the number of poor from 413.8 thousand to 812.3 thousand, or close to 400 thousand. If we remove from the universe the 571.7 thousand unrelated children under 15, all of whom would otherwise be counted as poor, then the number of poor persons drops to 240.6 thousand for an overall reduction of 173 thousand.
|Age and Original Poverty Class||New Poverty Class WhenTreated as an Unrelated Individual||Total by Age and Original Poverty Class|
|Below100%||100% to< 200%||200% to< 400%||400%or More|
|(All Persons)Below 100%||364,103||49,716||0||0||413,819|
|(All Persons)100% to < 200%||225,792||66,804||91,945||0||384,541|
|(All Persons)200% to < 400%||184,184||716||97,605||63,846||346,352|
|(All Persons)400% or more||38,253||4,088||9,169||34,038||85,548|
|Persons by Age|
|(Under 15)Below 100%||218,611||0||0||0||218,611|
|(Under 15)100% to < 200%||173,450||0||0||0||173,450|
|(Under 15)200% to < 400%||152,565||0||0||0||152,565|
|(Under 15)400% or more||27,118||0||0||0||27,118|
|(15 and Older)||240,587||121,324||198,719||97,885||658,515|
|(15 and Older)Below 100%||145,491||49,716||0||0||195,207|
|(15 and Older)100% to < 200%||52,342||66,804||91,945||0||211,091|
|(15 and Older)200% to < 400%||31,619||716||97,605||63,846||193,787|
|(15 and Older)400% or more||11,135||4,088||9,169||34,038||58,430|
Source: Mathematica Policy Research, from tabulations of poverty status in calendar year 2002 from the 2003 CPS ASEC supplement.
|Transition Status||Under 15||15 and older||Total|
|People who transition from:|
|Poor to nonpoor||0||49,716||49,716|
|Nonpoor to poor||353,134||95,096||448,230|
|People who remain:|
|People who are:|
|Poor as subfamily members||218,611||195,207||413,819|
|Poor when defined as unrelated individuals||571,745||240,587||812,332|
|Net change in poor:|
|If unrelated children under 15 are included||353,134||45,380||398,514|
|If unrelated children under 15 are excluded||-218,611||45,380||-173,231|
Source: Mathematica Policy Research, from tabulations of poverty status in calendar year 2002 from the 2003 CPS ASEC supplement
Given that unrelated children under 15 are excluded from the poverty universe for the ACS, our CPS simulation suggests the net effect of the ACS’s treating unrelated subfamily members as unrelated individuals is to reduce the estimated number of “officially” poor persons by about 173 thousand relative to what would be observed if unrelated subfamilies could be identified. This result obtains because more than three-quarters of the unrelated subfamily members who transition from nonpoor to poor when treated as unrelated individuals are children under 15, and they are not included in the official poverty universe. Furthermore, more than 200,000 children who would be classified as poor as members of unrelated subfamilies are dropped from the official poverty universe when they are treated as unrelated subfamily members. If, however, unrelated children under 15 are included in the poverty universe, as they would be for some policy analyses, then the net effect of the ACS’s treating unrelated subfamily members as unrelated individuals is to increase the number of poor by close to 400 thousand.
To make the ACS poverty estimates fully comparable to the CPS, then, we would need to add about 173 thousand to the ACS poor, given that we exclude unrelated children under 15 from the poverty universe. However, policy analysts who use the ACS for applications in which unrelated children under 15 are counted as poor would need to subtract about 400 thousand from their estimated number of poor persons in order to correct for the survey’s treatment of unrelated subfamily members as unrelated individuals.