Indicators of Welfare Dependence: Annual Report to Congress, 2007. Economic Security Risk Factor 3. Experimental Poverty Measures

07/31/2007

Figure ECON 3. Percentage of Persons in Poverty Using Various Experimental Poverty Measures by Age: 2004

Figure ECON 3. Percentage of Persons in Poverty Using Various Experimental Poverty Measures by Age: 2004

Source: U.S. Census Bureau, “The Effects of Government Taxes and Transfers on Income and Poverty: 2004,”, available online at http://www.census.gov/Press-Release/www/releases/archives/income_wealth/..., and unpublished CPS data from the U.S. Census Bureau.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. For more information on the definition of these measures see note for Table ECON 3a.
  • 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 do not take into account geographic adjustments (NGA) in housing costs; the measures can be calculated with geographic adjustment (GA), 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: 2004

    No Geographic Adjustment Geographic Adjustment
  Official Alternative 1 (MSI-NGA) Alternative 2 (MIT-NGA) Alternative 3 (CMB-NGA) Alternative 1 (MSI-GA) Alternative 2 (MIT-GA) Alternative 3 (CMB-GA)

Note: These experimental poverty measures implement changes recommended by a 1995 NAS panel, including: counting noncash 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 medical out-of-pocket expenses (MOOP) differently. The first alternative (“MOOP subtracted from income” or MSI) subtracts out-of-pocket medical expenses 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).

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, “Alternative Poverty Estimates in the United States: 2004,” Current Population Reports, Series P60-227, available at http://www.census.gov/prod/2005pubs/p60-227.pdf , and unpublished CPS data from the U.S. Census Bureau.

All Persons 12.7 12.7 13.1 13.3 12.5 13.0 13.3
Racial/Ethnic Categories
Non-Hispanic White 8.7 9.4 9.5 9.8 8.7 8.8 9.1
Non-Hispanic Black 24.7 22.1 22.9 23.1 21.3 22.0 22.4
Hispanic 21.9 20.2 21.7 21.2 22.8 25.3 24.7
Age Categories
Children Ages 0-17 17.8 14.1 15.2 14.8 13.9 15.3 14.9
Adults Ages 18-64 11.3 11.5 12.1 12.0 11.4 12.1 12.0
Adults Ages 65 and over 9.8 15.9 13.7 16.9 15.4 13.1 16.3

Table ECON 3b. Percentage of Persons in Poverty Using Various Experimental Poverty Measures 1999-2004

  1999 2000 2001 2002 2003 2004
See above for note and source.
Official Measure 11.9 11.3 11.7 12.1 12.5 12.7
No Geographic Adjustment of Thresholds            
Medical Costs Alternative 1 (MSI-NGA) 12.2 12.1 12.4 12.4 12.4 12.7
Medical Costs Alternative 2 (MIT-NGA) 12.8 12.7 12.8 13.0 12.8 13.1
Medical Costs Alternative 3 (CMB-NGA) 12.9 12.8 13.0 13.0 13.0 13.3
Geographic Adjustment of Thresholds            
Medical Costs Alternative 1 (MSI-GA) 12.1 12.0 12.3 12.3 12.3 12.5
Medical Costs Alternative 2 (MIT-GA) 12.7 12.5 12.7 12.8 12.7 13.0
Medical Costs Alternative 3 (CMB-GA) 12.8 12.6 12.9 12.9 12.9 13.3

 

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