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The Levels and Trends in Deep and Extreme Poverty in the United States, 1993–2016

Author

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  • David Brady

    (University of California
    WZB Berlin Social Science Center)

  • Zachary Parolin

    (Columbia University)

Abstract

Recently, there has been tremendous interest in deep and extreme poverty in the United States. We advance beyond prior research by using higher-quality data, improving measurement, and following leading standards in international income research. We estimate deep (less than 20% of medians) and extreme (less than 10% of medians) poverty in the United States from 1993 to 2016. Using the Current Population Survey, we match the income definition of the Luxembourg Income Study and adjust for underreporting using the Urban Institute’s TRIM3 model. In 2016, we estimate that 5.2 to 7.2 million Americans (1.6% to 2.2%) were deeply poor and 2.6 to 3.7 million (0.8% to 1.2%) were extremely poor. Although deep and extreme poverty fluctuated over time, including declines from 1993 to 1995 and 2007 to 2010, we find significant increases from lows in 1995 to peaks in 2016 in both deep (increases of 48% to 93%) and extreme poverty (increases of 54% to 111%). We even find significant increases with thresholds anchored at 1993 medians. With homelessness added, deep poverty would be 7% to 8% higher and extreme poverty 19% to 23% higher in 2016, which suggests that our estimates are probably lower bounds. The rise of deep/extreme poverty is concentrated among childless households. Among households with children, the expansion of SNAP benefits has led to declines in deep/extreme poverty. Ultimately, we demonstrate that estimates of deep/extreme poverty depend critically on the quality of income measurement.

Suggested Citation

  • David Brady & Zachary Parolin, 2020. "The Levels and Trends in Deep and Extreme Poverty in the United States, 1993–2016," Demography, Springer;Population Association of America (PAA), vol. 57(6), pages 2337-2360, December.
    • Handle: RePEc:spr:demogr:v:57:y:2020:i:6:d:10.1007_s13524-020-00924-1
    DOI: 10.1007/s13524-020-00924-1
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    References listed on IDEAS

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    8. Diane Whitmore, 2002. "What Are Food Stamps Worth?," Working Papers 847, Princeton University, Department of Economics, Industrial Relations Section..
    9. David Brady & Regina Baker & Ryan Finnigan, 2013. "When Unionization Disappears: State-Level Unionization and Working Poverty in the U.S," LIS Working papers 590, LIS Cross-National Data Center in Luxembourg.
    10. Charles Hokayem & Christopher Bollinger & James P. Ziliak, 2015. "The Role of CPS Nonresponse in the Measurement of Poverty," Journal of the American Statistical Association, Taylor & Francis Journals, vol. 110(511), pages 935-945, September.
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    15. David Brady & Marco Giesselmann & Ulrich Kohler & Anke Radenacker, 2018. "How to measure and proxy permanent income: evidence from Germany and the U.S," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 16(3), pages 321-345, September.
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    Cited by:

    1. Bruch, Sarah K. & van der Naald, Joseph & Gornick, Janet C., 2022. "Poverty Reduction through Federal and State Policy Mechanisms: Variation Over Time and Across the U.S. States," SocArXiv jz5xp, Center for Open Science.
    2. Brady, David & Finnigan, Ryan & Kohler, Ulrich & Legewie, Joscha, 2020. "The Inheritance of Race Revisited: Childhood Wealth and Income and Black–White Disadvantages in Adult Life Chances," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 7, pages 599-627.
    3. Margot I. Jackson & Susan L. Moffitt & Susanna Loeb, 2023. "Introduction," The ANNALS of the American Academy of Political and Social Science, , vol. 706(1), pages 7-13, March.
    4. David Brady & Michaela Curran & Richard Carpiano, 2023. "A test of the predictive validity of relative versus absolute income for self-reported health and well-being in the United States," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 48(26), pages 775-808.
    5. Brady, David & Guerra, Christian & Kohler, Ulrich & Link, Bruce, 2022. "The Long Arm of Prospective Childhood Income for Mature Adult Health in the United States," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 63(4), pages 543-559.
    6. David Brady, 2022. "Income and Wealth as Salient Gradational Aspects of Stratification," LIS Working papers 845, LIS Cross-National Data Center in Luxembourg.
    7. Manuel Schechtl & Rourke L. O'Brien, 2022. "Fiscal Impoverishment in Rich Democracies," LIS Working papers 831, LIS Cross-National Data Center in Luxembourg.

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