Indicators of Welfare Dependence: Annual Report to Congress, 2001 . Economic Security Risk Factor 3. Alternative Poverty Measures

03/01/2001

Figure ECON 3. Percentage of Persons in Poverty Using Official and Alternative Poverty Measure: 1990-1999

Figure ECON 3. Percentage of Persons in Poverty Using Official and Alternative Poverty Measure: 1990-1999

Source:  Census Bureau tabulations of March CPS data.


  • An alternative measure of poverty yields a poverty rate that is consistently higher than the official poverty rate, but that follows a similar pattern over time. The “DES-U” measure shown here is one of several developed by the Census Bureau to implement changes recommended by a panel from the National Academy of Sciences. These changes include counting non-cash benefits as income, subtracting from income certain work-related, health and child care expenses, and adjusting poverty thresholds for family size and geographic differences in housing costs (see note, Table ECON 3).

  • The percentage of children in poverty has steadily dropped since 1993, under both the “DES-U” alternative poverty measure (as shown in Table ECON 3) and the official poverty measure (as shown in Table ECON 1).

  • The alternative poverty rate used here suggests a significantly higher poverty rate among the elderly (adults ages 65 and over) than the official poverty rate. The official percentage of elderly adults in poverty in 1999 was under 10 percent, close to that of non-elderly adults (see Table ECON 1), while the alternative poverty measure resulted in a rate of poverty among elderly adults of 17 percent, almost as high as that for children.

Table ECON 3. Percentage of Persons in Poverty Using Alternative Poverty Measure, by Race and Age: 1990-1999

  Total All Persons White Black Hispanic Origin
Ages 0-17 Ages 18-64 Age 65 and Over
1990 16.7 22.8 13.8 18.1 14.2 32.6 36.4
1991 17.6 24.2 14.5 18.9 14.9 34.2 37.9
1992 18.3 24.8 15.2 20.3 15.5 35.4 38.2
1993 19.0 25.4 16.0 20.7 16.2 35.7 39.1
1994 17.5 23.1 14.7 19.4 15.1 30.7 36.9
1995 16.9 22.1 14.3 18.5 14.5 30.6 36.2
1996 16.7 21.6 14.1 19.0 14.5 29.8 35.0
1997 16.0 20.7 13.6 18.4 14.0 28.1 32.5
1998 15.1 19.6 12.8 16.9 13.1 26.8 30.8
1999 14.3 17.9 12.4 16.5 12.5 24.8 27.6

Note: Persons of Hispanic origin may be of any race. The alternative poverty measure used is the Different Equivalence Scale, unstandardized, or DES-U. Like several other measures developed by the Census Bureau to implement recommendations in a 1995 National Academy of Sciences (NAS) report, this measure counts noncash benefits as income, subtracts from income certain work-related, health and child care expenses, and adjusts poverty thresholds for family size and geographic differences in housing. It is distinguished by using a different equivalence scale to adjust for changes in expenses as family size increases. Specifically, it adds a third parameter to the NAS measure that allows the first child in a single-adult family to represent a greater increase in expenses than the first child in a two-adult family. This version of the DES has not been “standardized,” that is, the overall poverty rate has not been adjusted to match the overall rate under the official measure for any particular year.  Data for the above populations using the official poverty measure may be found in Table ECON 1.

Source:  Census Bureau tabulations of March CPS data.

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