To assess the social impacts of any change in dependence, changes in the level of poverty should be considered. This chapter focuses on the official poverty rate, the most common poverty measure. Additional measures of poverty and need also are included under the Economic Risk Factors found in Chapter III.
The poverty rate in 2005 remains much lower than in 1993, when poverty reached its highest peak since the early 1980s. The official poverty rate for 2005 was 12.6 percent, compared to 15.1 percent in 1993. This difference in the poverty rate indicates that 2.2 million fewer people are in poverty and 2.4 million fewer children are in families with incomes below poverty in 2005 than in 1993.
Table SUM 1.
Recipiency and Dependency Rates: Selected Years
|Note: Recipiency is defined as living in a family with receipt of any amount of AFDC/TANF, SSI or food stamps during the year. Dependency is defined as having more than 50 percent of annual family income from AFDC/TANF, SSI and/or food stamps. Dependency rates would be lower if adjusted to exclude welfare assistance associated with working. Spouses are not present in the Male-Headed and Female-Headed family categories. 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Source: Unpublished tabulations from the Current Population Survey, Annual Social and Economic Supplement, 1994-2005, analyzed using the TRIM3 microsimulation model.
|Recipiency Rates (Rates of Any Amount of AFDC/TANF, Food Stamps, or SSI)|
|Children Ages 0-5||30.5||28.2||21.5||19.8||20.8||21.4||24.2||24.6|
|Children Ages 6-10||24.9||24.2||19.8||18.0||18.4||18.8||20.5||22.2|
|Children Ages 11-15||22.1||21.1||17.3||16.3||16.1||16.8||19.7||20.4|
|Women Ages 16-64||16.4||16.0||13.6||12.5||12.5||13.4||14.0||15.0|
|Men Ages 16-64||11.5||11.7||9.6||9.2||9.6||10.3||10.6||11.6|
|Adults Ages 65 and over||11.2||10.3||10.0||10.4||9.6||9.7||9.9||10.0|
|Dependency Rates (More than 50 Percent of Income from AFDC/TANF, Food Stamps, or SSI)|
|Children Ages 0-5||13.9||11.2||6.2||6.0||5.9||6.0||7.5||7.1|
|Children Ages 6-10||11.2||9.5||6.1||5.1||5.4||5.1||5.8||6.0|
|Children Ages 11-15||9.3||8.1||4.5||4.0||4.4||4.0||5.0||5.1|
|Women Ages 16-64||5.9||5.2||3.5||3.0||3.3||3.4||3.6||3.7|
|Men Ages 16-64||2.7||2.7||1.9||1.9||2.0||2.0||2.3||2.4|
|Adults Ages 65 and over||2.4||2.4||2.0||2.1||1.9||2.0||2.2||2.2|
Figure SUM 2.
Percentage of Total Population in Poverty with Various Means-Tested Benefits Added to Total Cash Income: 1979-2005.
Source: Unpublished tabulations from the Current Population Survey, Annual Social and Economic Supplement, 1980-2006, analyzed by the Congressional Budget Office. See ECON 4 in Chapter III for underlying table and further notes.
Figure SUM 2 shows poverty estimates under both the official poverty rate and two other measures that adjust income based on cash benefits, non-cash benefits and taxes. The three measures in the graph are based on analyzing three different concepts of income against the poverty threshold:
- The solid line with filled squares shows the official poverty rate, based on total cash income, including earned and unearned income. The official poverty rate was 12.6 percent in 2005.
- The dotted line shows what the poverty rate would be if means-tested cash assistance (primarily AFDC/TANF and SSI) were excluded from cash income. Income in this measure includes earnings and other private cash income, plus social security, workers compensation and other social insurance programs, as income. The poverty rate under this measure would be higher than under the official measure, or 13.3 percent in 2005.
- The lowest line shows that the poverty rate would be lower if the cash value of selected non-cash benefits (food and housing) and taxes, including refunds under the Earned Income Tax Credit EITC), were counted as income.5 Under this definition, poverty rates in 2005 would be more than two percentage points lower than the official measure, or 10.3 percent.
5 The effects of selected non-cash benefits (food and housing) are shown separately from the effect of taxes in Figure ECON 4 in Chapter III. Prior to 1993, taxes increased poverty. Since 1993, taxes and tax credits (including refunds through the Earned Income Tax Credit) have had the net effect of reducing poverty rates.