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'Inability to Be Self-reliant' as an Indicator of U.S. Poverty: Measurement, Comparisons, and Implications

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  • Robert Haveman
  • Andrew Bershadker

Abstract

Given the current emphasis in national policy on self-reliance and a smaller role for government, the official poverty measure, which is based on the premise that all families should have sufficient income from either their own efforts or government support to boost them above a family-size-specific threshold, appears to have less policy relevance now than in prior years. We present here a new concept of poverty based on self-reliance, that is, the ability of a family, using its own resources, to support a level of consumption in excess of needs. Using a measure of net earnings capacity (NEC) to examine the size and composition of the self-reliant-poor population from 1975 to 1995, we find that self-reliance poverty has increased more rapidly than has official poverty. We find that families commonly thought to be the most impoverished--those headed by minorities, single women with children, and individuals with low levels of education--have the highest levels of self-reliance poverty, but have experienced the smallest increases in this poverty measure. Families commonly thought to be economically secure--those headed by whites, men, married couples, and highly educated individuals--have the lowest levels of self-reliance poverty, but have experienced the largest increases. We speculate that the trends in self-reliance poverty stem largely from underlying trends in the United States economy, in particular the relative decline of wage rates for whites and men and the rapidly expanding college-educated demographic group.

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Bibliographic Info

Paper provided by Levy Economics Institute in its series Economics Working Paper Archive with number wp_247.

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Date of creation: Aug 1998
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Handle: RePEc:lev:wrkpap:wp_247

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  1. Lee A. Lillard & Robert J. Willis, 1976. "Dynamic Aspects of Earnings Mobility," NBER Working Papers 0150, National Bureau of Economic Research, Inc.
  2. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
  3. Sen, Amartya, 1997. "On Economic Inequality," OUP Catalogue, Oxford University Press, Oxford University Press, number 9780198292975, October.
  4. Christopher Jencks & Susan E. Mayer, . "Do Official Poverty Rates Provide Useful Information about Trends in Children's Economic Welfare?," IPR working papers, Institute for Policy Resarch at Northwestern University 96-1, Institute for Policy Resarch at Northwestern University.
  5. Robert K. Triest, 1998. "Has Poverty Gotten Worse?," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 12(1), pages 97-114, Winter.
  6. Slesnick, Daniel T, 1993. "Gaining Ground: Poverty in the Postwar United States," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 101(1), pages 1-38, February.
  7. Jorgenson, Dale W & Slesnick, Daniel T, 1987. "Aggregate Consumer Behavior and Household Equivalence Scales," Journal of Business & Economic Statistics, American Statistical Association, American Statistical Association, vol. 5(2), pages 219-32, April.
  8. Juhn, Chinhui, 1992. "Decline of Male Labor Market Participation: The Role of Declining Market Opportunities," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 107(1), pages 79-121, February.
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Cited by:
  1. Albelda, Randy, 1999. "Women and poverty: Beyond earnings and welfare," The Quarterly Review of Economics and Finance, Elsevier, Elsevier, vol. 39(5), pages 723-742.

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