The first group includes eight measures associated with economic security. This group encompasses five measures of poverty, as well as measures of child support receipt, food insecurity, and lack of health insurance. The tables and figures illustrating measures of economic security are labeled with the prefix ECON throughout this chapter.
Poverty measures are important predictors of dependence, because families with fewer economic resources are more likely to be dependent on means-tested assistance. In addition, poverty and other measures of deprivation, such as food insecurity, are important to assess in conjunction with the measures of dependence outlined in Chapter II.
Reductions in caseloads and dependence can reduce poverty, to the extent that such reductions are associated with greater work activity and higher economic resources for former welfare families. However, if former welfare families are left with fewer economic resources, reductions in welfare caseloads may not lead to decreases in poverty.
Several aspects of poverty are examined in this chapter. Those that can be updated annually using the Current Population Survey include: overall poverty rates (ECON 1); the percentage of individuals in deep poverty (ECON 2), and poverty rates using alternative definitions of income (ECON 3 and 4). The chapter also includes data on the length of poverty episodes or spells (ECON 5).
This chapter also includes data on child support collections (ECON 6), which can play an important role in reducing dependence on government assistance and thus serve as a predictor of dependence. Household food insecurity (ECON 7) is an important measure of deprivation that, although correlated with general income poverty, provides an alternative measure of tracking the incidence of material hardship and need, and how it may change over time. Finally, lack of health insurance (ECON 8) is tied to the income level of the family, and may be a precursor to future health problems among adults and children.
Economic Security Risk Factor 1. Poverty Rates
Figure ECON 1.
Percentage of Persons in Poverty by Age: 1959-2006
Note: Last data point is 2006. All persons under 18 include related children (own children, including stepchildren and adopted children, plus all other children in the household who are related to the householder by birth, marriage, or adoption), unrelated individuals under 18 (persons who are not living with any relatives), and householders or spouses under age 18.
Source: U.S. Census Bureau, “Income, Poverty, and Health Insurance Coverage in the United States: 2006,” Current Population Reports, SeriesP60-233, and data published online at http://www.census.gov/hhes/www/poverty.html.
- Figure ECON 1 shows the percentage of persons in poverty by age from 1959 to 2006. The official poverty rate was 12.3 percent in 2006. The percentage of persons living in poverty in 2006 was lower than poverty rates during all of the 1980s and most of the 1990s.
- Children under 18 had a poverty rate of 17.4 percent in 2006. As in past years, the child poverty rate is higher than the overall poverty rate.
- Table ECON 1 shows the percentage of persons in poverty by age and family type for selected years.
- The poverty rate for the elderly (persons ages 65 and over) was 9.4 percent and the poverty rate for other adults (persons ages 18 to 64) was 10.8 percent in 2006.
- Related children from birth to age five have had the highest poverty rate among all age groups throughout the 1980s, 1990s, and into the 2000s. In 2006, 20.0 percent of related children from birth to age 5 lived below the poverty line.
- The poverty rates for persons in both married-couple families and female-headed families have decreased over time. In 1959, 18.2 percent of persons in married-couple families and 49.4 percent of persons in female-headed families were poor. By 2006, 5.7 percent of persons in married-couple families and 30.5 percent of persons in female-headed families were poor.
Table ECON 1.
Percentage of Persons in Poverty by Age and Family Type: Selected Years
Economic Security Risk Factor 2. Deep Poverty Rates
Figure ECON 2. Percentage of Total Population below 50, 100, and 125 Percent of Poverty Level
Source: U.S. Census Bureau, “Income, Poverty, and Health Insurance Coverage in the United States: 2006,” Current Population Reports, Series P60-233, and data published online at http://www.census.gov/hhes/www/poverty.html.
- Figure ECON 2 shows the percentage of the population below 50, 100, and 125 percent of the poverty level over time. The percentage of the population in “deep poverty” (with incomes below 50 percent of the federal poverty level) was 5.2 percent in 2006, compared to an overall poverty rate of 12.3 percent.
- Five (4.5) percent of the population was “near-poor;” they had incomes at or above 100 percent but below 125 percent of the federal poverty level in 2006.
- Table ECON 2 shows the number and percentage of the population below 50, 75, and 125 percent of the poverty level for selected years. In general, the percentage of the population with incomes below 50 percent of the poverty level has followed a pattern that reflects the trend in the overall poverty rate.
- The percentage of people below 50 percent of the poverty level rose in the late 1970s and early 1980s to 5.9 percent, and then after falling, rose to a second peak of 6.2 percent in 1993. The rates for 100 percent and 125 percent of the poverty level followed a somewhat similar pattern with more pronounced peaks and valleys.
- Over the past two decades, the proportion of the poverty population in “deep poverty” has increased. From a low of 28 percent of the poverty population in 1976, this population rose to just over 42 percent in 2006.
- The total number of poor people in 2006 was 36.5 million. This number was 2.8 million lower than the recent peak of 39.3 million in 1993.
Table ECON 2.
Number and Percentage of Total Population below 50, 75, 100, and 125 Percent of Poverty Level: Selected Years
Economic Security Risk Factor 3. Experimental Poverty Measures
Figure ECON 3.
Percentage of Persons in Poverty Using Various Experimental Poverty Measures by Age: 2006
Note: These measures use versions of 1999 CE-based poverty thresholds that are adjusted for inflation using the CPI-U.
These experimental poverty measures implement changes recommended by a 1995 NAS panel, including: counting certain non-cash income as benefits; subtracting from income certain work-related, health and child care expenses; introducing new poverty thresholds; and adjusting those thresholds for geographic differences in housing costs. The three alternative measures are similar, except that each accounts 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).
Source: U.S. Census Bureau, “Alternative Poverty Estimates Based on National Academy of Sciences Recommendations, by Geographic and Inflationary Adjustments,” available online at http://www.census.gov/hhes/www/povmeas/altmeas06/nas_measures_2005_2006_comparison.xls, and unpublished CPS data from the U.S. Census Bureau.
- Figure ECON 3 shows the percentage of persons in poverty using various experimental poverty measures by age in 2006. Three experimental measures of poverty (developed by the U.S. 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 taking into account certain out-of-pocket health costs for these measures.
- All three alternative measures shown in Figure ECON 3 are versions that do not take into account geographic adjustments for housing costs (NGA); there also are versions that do take into account those geographic adjustments (GA), as shown in Tables ECON 3a and 3b.
Table ECON 3a.
Percentage of Persons in Poverty Using Various Experimental Poverty Measures by Selected Characteristics: 2006
Table ECON 3b.
Percentage of Persons in Poverty Using Various Experimental Poverty Measures: 1999-2006
Economic Security Risk Factor 4. Poverty Rates with Various Means-tested Transfers Counted as Income
Figure ECON 4.
Percentage of Total Population in Poverty with Various Means-Tested Transfers Counted as Income: 1979-2006
Note: The four measures of income are as follows: (1) “Pre-transfer cash income plus social insurance cash transfers” is earnings and other pre-transfer (“private” or “market”) cash income, plus social security, workers compensation, and other social insurance cash transfers. It does not include means-tested cash transfers; (2) “Plus means-tested cash transfers” is the official Census Bureau income definition, which includes means-tested cash transfers, primarily AFDC/TANF and SSI; (3) “Plus food and housing benefits” counts the cash value of means-tested food and housing benefits as income; and (4) “Plus EITC and federal taxes” is the most comprehensive income measure used. It adds the refundable Earned Income Tax Credit (EITC) to income, while subtracting federal payroll and income taxes. The fungible value of Medicare and Medicaid is not included in any of the income measures.
Source: Unpublished tabulations from the Current Population Survey, Annual Social and Economic Supplement, 1980-2007, analyzed by the Congressional Budget Office.
- Figure ECON 4 shows the percentage of the population in poverty with various means-tested transfers counted as income for the years 1979 to 2006. The official poverty rate – using the official income definition, which includes means-tested cash transfers (primarily TANF and SSI) in addition to pre-transfer cash income and social insurance cash transfers – was 12.3 percent in 2006. Without cash welfare, the 2006 poverty rate would be 13.0 percent.
- Adding non-cash, means-tested transfers to the official income definition has the effect of lowering the percentage of people with incomes below the official poverty line. Including the value of food and housing benefits in total income would reduce the poverty rate to 11.0 percent in 2006.
- When income is defined to include the Earned Income Tax Credit (EITC) and the effect of federal taxes, the percentage of people in poverty would decrease to 10.0 percent in 2006. Federal taxes and the EITC have had the net effect of reducing poverty rates following the EITC expansions in 1993 and 1995.
- Table ECON 4 shows the percentage of the population in poverty with various means-tested transfers counted as income for selected years. The combined effect of means-tested cash transfers, food and housing benefits, the EITC, and federal taxes was to reduce the poverty rate in 2006 by 3 percentage points. Net reductions in poverty rates were smaller during the 1981 to 1982 recession, and higher in the mid-1990s, largely due to expansions in the EITC.
Table ECON 4.
Percentage of Total Population in Poverty with Various Means-Tested Transfers Counted as Income: Selected Years
Economic Security Risk Factor 5. Poverty Spells
Figure ECON 5.
Percentage of Poverty Spells for Persons Entering Poverty during the 2001 – 2003 Period by Length of Spell
Note: Spell length categories are mutually exclusive. Spells separated by only 1 month are not considered separate spells. Due to the length of the observation period, actual spell lengths for spells that lasted more than 20 months cannot be observed.
Source: Unpublished tabulations from the Survey of Income and Program Participation, 2001 panel.
- Figure ECON 5 shows the percentage of poverty spells that are of various lengths for persons who became poor during the 2001 to 2003 period. Nearly half (49.2 percent) of poverty spells that began between 2001 and 2003 ended within 4 months. More than three-quarters (76.9 percent) of poverty spells during this period ended within one year while 15.5 percent of spells lasted more than 20 months.
- Table ECON 5a shows the percentage of poverty spells for persons entering poverty during the 2001 to 2003 period by length of spell and demographic characteristics.
- Among racial and ethnic groups, a larger percentage of Non-Hispanic Whites had short spells of poverty (52.3 percent) than Non-Hispanic Blacks (42.1 percent) or Hispanics of any race (45.7 percent). For poverty spells greater than 20 months, a larger percentage of Non-Hispanic Blacks had longer poverty spells (21.1 percent) compared to Non-Hispanic Whites (13.5 percent) and Hispanics of any race (16.8 percent).
- Among age categories, the difference in the percentage of poverty spells among adults 65 years or older and other adults is notable. Twenty-one (21.2) percent of adults ages 65 years and over had poverty spells that lasted more than 20 months as compared to 14.4 percent of women ages 16 to 64 and 12.1 percent of men ages 16 to 64.
Table ECON 5a.
Percentage of Poverty Spells for Persons Entering Poverty during the 2001-2003 Period by Length of Spell and Selected Characteristics
Table ECON 5b.
Percentage of Poverty Spells for Persons Entering Poverty during Selected Time Periods by Length of Spell
Economic Security Risk Factor 6. Child Support
Figure ECON 6.
Percentage of Families Receiving Child Support Collections by Receipt of IV-D Services and Other Public Assistance: 1993-2005
Note: AFDC/TANF families are families who have reported receiving cash assistance for any month during the 12-month period. Therefore, not all the child support reported received was necessarily received while the family was receiving cash assistance. Data limitations do not allow a month-by-month breakdown. Families receiving SSI, food stamps, Medicaid or housing assistance are limited to families not receiving AFDC/TANF. Families receiving services through the IV-D system are estimated according to the methodology described in technical appendices to the ASPE-published report Characteristics of Families Using Title IV-D Services in 1999 and 2001, available at: http://aspe.hhs.gov/hsp/CSE-Char04/index.htm and previous reports.
Source: Unpublished tabulations from the Current Population Survey, Child Support Supplement, 1994-2006.
- Figure ECON 6 shows the percentage of all families that receive child support collections by receipt of title IV-D services and other public assistance between 1993 and 2005. Title IV-D of the Social Security Act authorizes state programs to assist custodial parents in establishing paternity and child support awards, and collecting child support payments. The total amount of child support received by custodial parents through the IV-D system in 2005 was $17.2 billion (constant 2005 dollars) or 65.9 percent of all child support payments received by custodial parents.
- In total for 2005, custodial parents reported receiving $26.1 billion in child support payments from non-resident parents.1 Total child support collections have increased by 19.2 percent since 1993, after adjusting for inflation.
- Table ECON 6 shows greater detail on child support collections by receipt of IV-D services and other assistance. Child support payments received through IV-D by custodial parents who also received AFDC/TANF cash assistance, declined from $3.3 billion (constant 2005 dollars) in 1993 to $1.8 billion in 2005.2
- Child support payments to custodial parents who did not receive TANF but received another form of public assistance (food stamps, SSI, Medicaid or housing assistance) increased from $2.2 billion (in constant 2005 dollars) to $5.9 billion between 1993 and 2005. This group of custodial parents includes former TANF recipients as well as those eligible for cash assistance. The increased collections for this group offset the decline in payments to TANF families.
1 This amount represents current year support received for a twelve-month period and does not include amounts paid for prior periods (arrearages) or amounts retained by the federal and state governments to recoup welfare costs.
2 The decline partly reflects the decrease in AFDC/TANF caseloads. Also, some states no longer “pass-through” any child support payments to custodial parents receiving TANF. Prior to the enactment of PRWORA in 1996, states were required to pass-through the first $50 of any child support collected.
Economic Security Risk Factor 7. Food Insecurity
Figure ECON 7.
Percentage of Households Classified by Food Security Status: 2006
Note: Food secure households had consistent access to enough food for active, healthy lives for all household members at all times during the year. Households with low food security obtained enough food to avoid substantial disruptions in eating patterns and food intake, using a variety of coping strategies, such as eating less varied diets, participating in Federal food assistance programs, or getting emergency food from community food pantries or emergency kitchens. Households with very low food security reported reduced food intake of some household members and their normal eating patterns were disrupted because of the lack of money and other resources.
Source: U.S. Department of Agriculture, Economic Research Service, Household Food Security in the United States, 2006.
- Figure ECON 7 shows the percentage of households that were food secure, had low food security, and had very low food security in 2006. The majority of U.S. households (89.1 percent) was food secure in 2006; that is, they showed little or no evidence of concern about food supply or reduction in food intake.
- Seven (6.9) percent of U.S. households experienced low food security and 4.0 percent were classified as having very low food security. Very low food security is defined as having reduced food intake and having normal eating patterns disrupted because of financial constraints.
- Table ECON 7a shows the percentage of households classified by food security status by selected demographic characteristics.
- For households by age categories, households with elderly were more food secure (94.0 percent) than were households with children under six (83.3 percent) or households with children under 18 (84.4 percent).
- There is a relationship between poverty and food security. Sixty-four (63.7) percent of poor households were food secure compared to 66.9 percent of households below 130 percent of the poverty level, 72.7 percent of households below 185 percent of the poverty level, and 92.9 percent of households at or above 185 percent of the poverty level.
- Married-couple households were less likely to experience food insecurity than female-headed households. Ten (10.1) percent of married-couple households were food insecure in 2006 compared to 30.4 percent of female-headed households.
- Table ECON 7b shows the percentage of households classified by food security status between 1998 and 2006. The percentage of households with food insecurity (both low and very low food insecurity) has fluctuated over time from a low of 10.1 percent in 1999 to a high of 11.9 percent in 2004.
Table ECON 7a.
Percentage of Households Classified by Food Security Status and Selected Characteristics: 2006
Table ECON 7b.
Percentage of Households Classified by Food Security Status: 1998-2006
Economic Security Risk Factor 8. Lack of Health Insurance
Figure ECON 8.
Percentage of Persons without Health Insurance by Poverty Status: 2006
Note: "Poor persons" are defined as those with total family incomes at or below the federal poverty threshold. Health insurance rates for the education categories include only adults age 18 and over.
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. Some of the race categories presented for ECON 8 have been changed slightly from prior year reports to provide more internal consistency throughout this report; in reports prior to 2006, the race categories for Black and White included persons of Hispanic origin.
Source: Unpublished tabulations from the Current Population Survey, Annual Social and Economic Supplement, 2007.
- Figure ECON 8 shows the percentage of persons without health insurance by race and ethnicity, educational attainment, and poverty status for 2006. Thirty-two (31.6) percent of poor persons were without health insurance as compared to 13.6 percent of non-poor persons.
- Among race and ethnic groups, poor Hispanics of any race had higher rates of being uninsured (42.9 percent) than did poor Non-Hispanic Whites (27.0 percent) and poor Non-Hispanic Blacks (28.1 percent).
- For non-poor persons, as education increases, the rate of being uninsured decreases. Twenty-nine (28.5) percent of the non-poor who were not high school graduates were uninsured compared to 17.6 percent of high school graduates, and 6.6 percent of college graduates.
- Among the poor, 41.5 percent of persons who were not high school graduates, 39.9 percent of high school graduates, and 32.5 percent of college graduates were uninsured.
- Table ECON 8 shows the percentage of persons without health insurance by poverty status and demographic characteristics. Across all demographic categories, poor persons were more likely than non-poor persons to be uninsured regardless of race and ethnicity, gender, educational attainment, age, or family category.
- For poor persons, 19.3 percent of children 17 years of age or less were without health insurance as compared to 51.3 percent of poor adults 25 to 34 years of age. The 25 to 34 year age category had the highest percentage of uninsured among poor persons.
- For non-poor persons, 10.0 percent of the children 17 years of age or less were without health insurance as compared to 26.2 percent of adults 18 to 24 years of age. The 18 to 24 year age category had the highest percentage of uninsured among non-poor persons.
Table ECON 8.
Percentage of Persons without Health Insurance by Poverty Status and Selected Characteristics: 2006