Indicators of Welfare Dependence: Annual Report to Congress, 2009-2013. Measuring Economic Well-Being

04/01/2013

To assess the social impacts of any change in dependence, changes in the level of poverty should be considered. This report 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.

As shown in Figure SUM 2a the official 2009 poverty rate (14.3 percent) is higher than any rate in the 2000s yet it is still lower than the 1993 rate of 15.1 and the 1983 rate of 15.2 percent, peak years for poverty in recent history. In examining poverty over the last decade, in 1999 there were 32.8 million people in poverty as compared to almost 43.6 million people in poverty in 20099. Some of this increase could be attributed to population increases. As shown in Figure Sum 2b, the child poverty rate for all persons under 18 was 20.1 percent in 2009, with 15.5 million poor children, and for related children 0 – 5 years of age the rate is 23.8 percent (see Table ECON 1).

Table SUM 1. Recipiency and Dependency Rates: Selected Years

 

  1993 1996 1997 1998 1999 2000 2002 2004 2006 2007 2008 2009
Recipiency Rates (Rates of Any Amount of AFDC/TANF, SNAP or SSI)
All Persons  16.6 16.0 14.8 13.5 13.3 12.5 13.2 15.0 15.6 15.8 17.1 19.9
Racial/Ethnic Categories
Non-Hispanic White  10.3 9.9 9.7 8.6 8.4 8.2 8.8 10.1 10.6 10.4 11.4 13.3
Non-Hispanic Black  38.0 35.6 30.2 29.6 29.8 27.0 27.7 32.4 32.0 33.4 34.1 37.6
Hispanic  34.6 32.0 28.0 24.5 23.4 21.0 21.7 22.6 23.8 24.6 27.6 32.9
Age Categories
Children ages 0-5  30.5 28.2 25.1 22.4 21.5 19.8 21.4 24.6 25.7 27.0 28.9 34.3
Children ages 6-10  24.9 24.2 21.2 20.0 19.8 18.0 18.8 22.2 23.2 23.9 26.2 30.4
Children ages 11-15  22.1 21.1 19.4 17.0 17.3 16.3 16.8 20.5 21.5 22.5 23.1 27.4
Women ages 16-64  16.4 16.0 14.7 13.6 13.6 12.5 13.4 15.0 15.7 15.6 16.9 19.8
Men ages 16-64  11.5 11.7 11.1 10.0 9.6 9.2 10.3 11.6 12.0 12.1 13.5 16.0
  11.2 10.3 10.2 9.9 10.0 10.4 9.7 10.0 10.6 10.6 11.4 11.3
Family Categories
Persons in:
Married-couple families  10.5 9.6 8.7 8.3 7.9 7.2 7.5 8.6 8.9 8.8 9.9 12.5
Female-headed families  47.8 46.0 41.6 37.5 39.9 37.1 37.7 42.6 44.3 45.0 47.3 50.4
Male-headed families  27.6 25.3 24.3 19.7 19.3 21.8 21.2 21.9 25.8 26.4 27.3 33.1
Unrelated persons  9.7 11.5 11.9 10.9 10.0 10.1 11.5 12.7 12.6 12.4 14.1 15.5
Dependency Rates (More than 50 Percent of Income from AFDC/TANF, SNAP and/or SSI)
All Persons  5.9 5.2 4.5 3.8 3.3 3.0 3.2 3.7 3.7 3.5 4.0 4.6
Racial/Ethnic Categories
Non-Hispanic White  3.0 2.6 2.5 2.1 1.8 1.9 1.8 2.2 2.3 2.1 2.4 2.7
Non-Hispanic Black  17.8 13.8 11.4 10.5 9.1 7.7 8.7 10.0 9.5 9.4 10.2 11.1
Hispanic  11.8 10.9 9.1 6.6 5.4 4.5 4.9 5.2 5.2 5.1 5.7 7.1
Age Categories
Children ages 0-5  13.9 11.2 9.3 7.8 6.2 6.0 6.0 7.1 6.9 7.1 7.6 9.1
Children ages 6-10  11.2 9.5 8.4 6.7 6.1 5.1 5.1 6.0 5.7 5.3 6.3 7.5
Children ages 11-15  9.3 8.1 7.4 5.7 4.5 4.0 4.0 5.1 5.2 5.3 5.3 6.3
Women ages 16-64  5.9 5.2 4.6 3.9 3.5 3.0 3.4 3.7 3.9 3.7 4.2 4.8
Men ages 16-64  2.7 2.7 2.5 2.1 1.9 1.8 2.0 2.4 2.5 2.3 2.8 3.2
Adults ages 65 and  2.4 2.4 2.1 2.1 2.0 2.1 2.0 2.2 2.1 2.1 2.2 2.2
Family Categories
Persons in:
Married-couple families  1.8 1.7 1.4   1.0 1.0 1.0 1.0 1.2 1.1 1.3 1.6
Female-headed families  25.7 21.1 18.4 15.0 13.6 11.4 11.7 13.8 13.2 12.6 13.4 14.6
Male-headed families  6.8 5.4 5.6 4.2 3.0 4.4 3.8 4.0 4.5 4.5 4.7 6.4
Unrelated persons  3.8 4.2 4.2 4.2 3.4 3.8 4.1 4.5 4.7 4.3 5.2 5.8
 
Note: Recipiency is defined as living in a family with receipt of any amount of AFDC/TANF, SSI or FSP/SNAP during the year. Dependency is defined as having more than 50 percent of annual family income from AFDC/TANF, SSI and/or SNAP. 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, 1994-2010, analyzed using the TRIM3 microsimulation model.
 
Figure SUM 2a. Percentage of Total Population in Poverty with Various Means-Tested Transfers Counted as Income: 1979-2009
Note: The three measures of income are as follows: (1) “Before means-tested 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) The “Official poverty measure” uses the official Census Bureau income definition, which includes means-tested cash transfers, primarily AFDC/TANF and SSI; (3) “After means-tested non-cash benefits and taxes” counts the cash value of means-tested food and housing benefits, adds the refundable Earned Income Tax Credit (EITC), and subtracts 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 – 2010, analyzed by the Congressional Budget Office. See ECON 4 in Chapter III for the data underlying the table and further notes.
 
Figure SUM 2a shows poverty estimates under the official poverty rate and two other measures that adjust income by adding or subtracting means-tested cash transfers, means-tested non-cash benefits, and federal taxes. While each of the three poverty measures in the graph uses a different definition of income, all three poverty measures use the Census Bureau’s official poverty thresholds.
 
The “Official poverty measure” trend line shows the official poverty rate based on total cash income, including means-tested cash transfers. The official poverty rate was 14.3 percent in 2009.
 
The “Before means-tested cash transfers” trend line shows that the poverty rate would be if means-tested cash transfers (primarily AFDC/TANF and SSI) were excluded from income. Income in this measure includes earnings and other pre-transfer cash income, plus social security, workers compensation, and other social insurance cash transfers. The poverty rate under this measure would be higher than under the official measure, or 15.1 percent in 2009.
 
The “After means-tested non-cash benefits and taxes” trend line shows what the poverty rate would be lower if the cash value of means-tested food and housing transfers and the effect of federal taxes were counted as income.11 Under this definition, the poverty rate in 2009 would be 3.8 percentage points lower than the official measure, or 10.5 percent.
 
Figure SUM 2b. Number of Poor Persons under 18 Years of Age & Their Poverty Rate, 1959-2009
Source: U.S. Bureau of the Census, “Income, Poverty, and Health Insurance Coverage in the United States: 2010,” Current Population Reports, Series P60-239 and data published online at http://www.census.gov/hhes/www/poverty.html.

9 U.S. Bureau of the Census, “Income, Poverty, and Health Insurance Coverage in the United States: 2010, “Current Population Reports, Series P60-239 and data published online at www.census.gov/hhes/www/poverty.html.

11 The effects of food and housing benefits are shown separately from the effect of federal taxes in Figure ECON 4 in Chapter III. Prior to 1993, including the effect of federal taxes and increased poverty. Since 1993, federal taxes and tax credits (including refunds through the Earned Income Tax Credit) have had the net effect of reducing poverty rates.

 

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