Indicators of Welfare Dependence: Annual Report to Congress, 2005 . Economic Security Risk Factor 3. Experimental Poverty Measures

08/30/2005

Figure ECON 3. Percentage of Persons in Poverty Using Various Experimental Poverty Measures by Age: 2002

Figure ECON 3. Percentage of Persons in Poverty Using Various Experimental Poverty Measures by Age: 2002

Source: U.S. Bureau of the Census, “Poverty in the United States: 2002,” Current Population Reports, Series P60-222, available online at http://www.census.gov/prod/2003pubs/p60-222.pdf, and unpublished CPS data from the U.S. Census Bureau.

  • Three experimental measures of poverty (developed by the Census Bureau in response to the recommendation of a 1995 panel of the National Academy of Sciences) yield poverty rates that are similar to the official poverty measure overall, but differ by age and other characteristics.
  • Experimental measures generally show lower poverty rates among children than the official measure, partly because they take into account non-cash benefits that many children receive. Conversely, experimental measures show higher rates of poverty among the elderly than the official measure, in part due to the inclusion of certain out-of-pocket health costs in these measures.
  • All three alternative measures shown in Figure Econ 3 take into account geographic adjustments (GA) in housing costs; the measures can also be calculated with no geographic adjustment (NGA), as shown in Tables ECON 3a and 3b. See note to Table ECON 3a.
Table ECON 3a. Percentage of Persons in Poverty Using Various Experimental Poverty
Measures, by Race/Ethnicity and Age: 2002
  Official Alt1 MSI-NGA Alt2 MIT-NGA Alt3 CMB-NGA Alt1 MSI-GA Alt2 MIT-GA Alt3 CMB-GA
All Persons 12.1 12.4 13.0 13.0 12.3 12.8 12.9
Racial/Ethnic Categories
Non-Hispanic White 8.0 8.9 9.2 9.4 8.4 8.5 8.8
Non-Hispanic Black 24.1 21.2 22.2 22.3 20.6 21.1 21.3
Hispanic 21.8 21.09 22.7 22.2 23.3 25.4 24.8
Age Categories
Children Ages 0-17 16.7 13.8 15.3 14.7 13.9 15.2 14.6
Adults Ages 18-64 10.6 10.8 11.6 11.3 10.8 11.5 11.3
Adults Ages 65 and over 10.4 16.7 14.4 17.6 16.0 13.4 16.9

Note: These experimental poverty measures implement changes recommended by a 1995 NAS panel, including: counting non-cash income as benefits; subtracting from income certain work-related, health, and child care expenses; and adjusting poverty thresholds for family size and geographic differences in housing costs. The three alternative measures are similar, except that each account for out-of-pocket medical expenses differently. For the first alternative (“MOOP subtracted from income” or MSI), medical out-of-pocket expenses (MOOP) are subtracted from income. The second alternative, (“MOOP in the threshold” or MIT) increases the poverty thresholds to take MOOP expenses into account. The third measure, CMB for combined methods, combines attributes of the previous two measures. Each of the three measures is calculated with and without accounting for geographic adjustments (GA and NGA). These experimental measures are different from those reported in last year’s report because the Census Bureau changed its methodology based on research conducted to refine the NAS panel’s experimental methods.

Persons of Hispanic ethnicity may be of any race. Beginning in 2002, estimates for Whites and Blacks are for persons reporting a single race only. Persons who reported more than one race are included in the total for all persons but are not shown under any race category. Due to small sample size, American Indians/Alaska Natives, Asians and Native Hawaiians/Other Pacific Islanders are included in the total for all persons but are not shown separately.

Source: U.S. Census Bureau, “Poverty in the United States: 2002,” Current Population Reports, Series P60-222, available at http://www.census.gov/prod/2003pubs/p60-222.pdf, and unpublished CPS data from the U.S. Census Bureau.

Table ECON 3b. Percentage of Persons in Poverty Using Various Experimental Poverty Measures 1999-2002

  1999 2000 2001 2002
Official Measure 11.9 11.3 11.7 12.1
No Geographic Adjustment of Thresholds
Medical costs alternative 1 (MSI-NGA) 12.2 12.1 12.4 12.4
Medical costs alternative 2 (MIT-NGA) 12.8 12.7 12.8 13.0
Medical costs alternative 3 (CMB-NGA) 12.9 12.8 13.0 13.0
Geographic Adjustment of Thresholds
Medical costs alternative 1 (MSI-GA) 12.1 12.0 12.3 12.3
Medical costs alternative 2 (MIT-GA) 12.7 12.5 12.7 12.8
Medical costs alternative 3 (CMB-GA) 12.8 12.6 12.9 12.9

See above for note and source.

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