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Measuring Poverty and Economic Inclusion: The Current Poverty Measure, the NAS Alternative, and the Case for a Truly New Approach

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  • Shawn Fremstad

Abstract

This report examines the current U.S. poverty measure and finds that it has failed to keep up with public consensus on the minimum amount of income needed to “get along” in the United States in the 21st Century. The author then examines a potential approach to revising the measure, based on recommendations made by a National Academy of Sciences panel in 1995, that improves in some ways on the current measure, but has serious limitations of its own that require further research before it is adopted. Moreover, the NAS approach results in a poverty measure that would remain far below the public’s get-along level. This report concludes by suggesting a truly new approach that the incoming Administration should adopt- a “tiered” poverty and economic-inclusion measure that is modeled on the child poverty measure adopted in 2003 by the United Kingdom.

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Paper provided by Center for Economic and Policy Research (CEPR) in its series CEPR Reports and Issue Briefs with number 2008-36.

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Length: 47 pages
Date of creation: Dec 2008
Date of revision:
Handle: RePEc:epo:papers:2008-36

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Keywords: federal poverty line; poverty rate; poverty; NAS poverty rate;

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  1. J. Bradford De Long & Andrei Shleifer & Lawrence H. Summers & Robert J. Waldmann, 1987. "The Economic Consequences of Noise Traders," NBER Working Papers 2395, National Bureau of Economic Research, Inc.
  2. Steve Bond & Mike Hawkins & Alexander Klemm, 2005. "Stamp Duty on Shares and Its Effect on Share Prices," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 61(3), pages 275-, November.
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