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Did We Lose the War on Poverty?

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  • Dale W. Jorgenson
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    Abstract

    Official U.S. poverty statistics based on household income imply that the proportion of the U.S. population below the poverty level reached a minimum in 1973, giving rise to the widespread impression that the elimination of poverty is impossible. By contrast, poverty estimates based on household consumption have fallen through 1989 and imply that the war on poverty was a success. This paper recommends replacing income by consumption in official estimates of poverty in order to obtain a more accurate assessment of the impact of income support programs and economic growth on the level and distribution of economic well-being among households.

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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.12.1.79
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    Bibliographic Info

    Article provided by American Economic Association in its journal Journal of Economic Perspectives.

    Volume (Year): 12 (1998)
    Issue (Month): 1 (Winter)
    Pages: 79-96

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    Handle: RePEc:aea:jecper:v:12:y:1998:i:1:p:79-96

    Note: DOI: 10.1257/jep.12.1.79
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    References

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    1. Gary S. Becker, 1981. "A Treatise on the Family," NBER Books, National Bureau of Economic Research, Inc, number beck81-1.
    2. Milton Friedman, 1957. "A Theory of the Consumption Function," NBER Books, National Bureau of Economic Research, Inc, number frie57-1.
    3. Jorgenson, Dale W & Slesnick, Daniel T, 1999. "Indexing Government Programs for Changes in the Cost of Living," Journal of Business & Economic Statistics, American Statistical Association, vol. 17(2), pages 170-81, April.
    4. Browning, Martin, 1992. "Children and Household Economic Behavior," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1434-75, September.
    5. Lewbel, Arthur, 1989. "Household equivalence scales and welfare comparisons," Journal of Public Economics, Elsevier, vol. 39(3), pages 377-391, August.
    6. Shelly Lundberg & Robert A. Pollak, 1996. "Bargaining and Distribution in Marriage," Journal of Economic Perspectives, American Economic Association, vol. 10(4), pages 139-158, Fall.
    7. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
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    Cited by:
    1. Ximing Wu & Jeffrey M. Perloff, 2005. "China's Income Distribution, 1985-2001," The Review of Economics and Statistics, MIT Press, vol. 87(4), pages 763-775, November.
    2. Raghbendra Jha & Bagala Biswal & Urvashi D. Biswal, 2001. "An Empirical Analysis of the Impact of Public Expenditures on Education and Health on Poverty in Indian States," ASARC Working Papers 2001-05, The Australian National University, Australia South Asia Research Centre.
    3. Marcia K. Meyers & Irwin Garfinkel, 1999. "Social indicators and the study of inequality," Economic Policy Review, Federal Reserve Bank of New York, issue Sep, pages 149-163.
    4. Self, Sharmistha & Grabowski, Richard, 2006. "The Asian Financial Crisis: Impact on Human Development," Review of Applied Economics, Review of Applied Economics, vol. 2(2).
    5. Ian Irvine & Kuan Xu, 2002. "Crime, Punishment and Poverty in the United States," Department of Economics at Dalhousie University working papers archive uspov, Dalhousie, Department of Economics.
    6. María Beatriz Orlando & Molly Pollack, 2000. "Microenterprises and Poverty: Evidence from Latin America," IDB Publications 40818, Inter-American Development Bank.
    7. Wu, Ximing & Perloff, Jeffrey M., 2004. "China's Income Distribution Over Time: Reasons for Rising Inequality," Institute for Research on Labor and Employment, Working Paper Series qt9jw2v939, Institute of Industrial Relations, UC Berkeley.
    8. Michael Hurd & Susann Rohwedder, 2006. "Economic Well-Being at Older Ages: Income- and Consumption-Based Poverty Measures in the HRS," Working Papers 410, RAND Corporation Publications Department.
    9. Michael Hurd & Susann Rohwedder, 2006. "Consumption and Economic Well-Being at Older Ages: Income- and Consumption-Based Poverty Measures in the HRS," Working Papers wp110, University of Michigan, Michigan Retirement Research Center.
    10. Robert H. DeFina, 2002. "The impact of unemployment on alternative poverty measures," Working Papers 02-8, Federal Reserve Bank of Philadelphia.
    11. Atasoy, Sibel & Mills, Bradford F. & Mykerezi, Elton, 2008. "Intensity of Food Stamp Use and Transient and Chronic Poverty: Evidence from the Panel Study of Income Dynamics," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6541, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    12. Jones, Carol Adaire & Milkove, Daniel & Paszkiewicz, Laura, 2009. "Measuring Farm Household Well-Being: Comparing Consumption and Income-based Measures," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49355, Agricultural and Applied Economics Association.
    13. Urvashi Dhawan-Biswal, 2002. "Consumption and Income Inequality: The Case of Atlantic Canada from 1969­1996," Canadian Public Policy, University of Toronto Press, vol. 28(4), pages 513-537, December.

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