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Waging War on Poverty: Historical Trends in Poverty Using the Supplemental Poverty Measure

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  • Liana Fox
  • Irwin Garfinkel
  • Neeraj Kaushal
  • Jane Waldfogel
  • Christopher Wimer

Abstract

Using data from the Consumer Expenditure Survey and the March Current Population Survey, we calculate historical poverty estimates based on the new Supplemental Poverty Measure (SPM) from 1967 to 2012. During this period, poverty as officially measured has stagnated. However, the official poverty measure (OPM) does not account for the effect of near-cash transfers on the financial resources available to families, an important omission since such transfers have become an increasingly important part of government anti-poverty policy. Applying the SPM, which does count such transfers, we find that historical trends in poverty have been more favorable than the OPM suggests and that government policies have played an important and growing role in reducing poverty --- a role that is not evident when the OPM is used to assess poverty. We also find that government programs have played a particularly important role in alleviating child poverty and deep poverty, especially during economic downturns.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 19789.

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Date of creation: Jan 2014
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Handle: RePEc:nbr:nberwo:19789

Note: AG CH EFG PE
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  1. Bruce D. Meyer & James X. Sullivan, 2009. "Five Decades of Consumption and Income Poverty," NBER Working Papers 14827, National Bureau of Economic Research, Inc.
  2. Rebecca M. Blank, 2008. "Presidential address: How to improve poverty measurement in the United States," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 27(2), pages 233-254.
  3. Daniel Feenberg & Elisabeth Coutts, 1993. "An introduction to the TAXSIM model," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 12(1), pages 189-194.
  4. Yonatan Ben-Shalom & Robert Moffitt & John Karl Scholz, 2011. "An Assessment of the Effectiveness of Anti-Poverty Programs in the United States," Economics Working Paper Archive 579, The Johns Hopkins University,Department of Economics.
  5. Bruce D. Meyer & James X. Sullivan, 2013. "Consumption and Income Inequality and the Great Recession," American Economic Review, American Economic Association, vol. 103(3), pages 178-83, May.
  6. Moffitt, Robert, 1992. "Incentive Effects of the U.S. Welfare System: A Review," Journal of Economic Literature, American Economic Association, vol. 30(1), pages 1-61, March.
  7. Rebecca M. Blank, 2002. "Evaluating Welfare Reform in the United States," NBER Working Papers 8983, National Bureau of Economic Research, Inc.
  8. Danziger, Sheldon & Haveman, Robert & Plotnick, Robert, 1981. "How Income Transfer Programs Affect Work, Savings, and the Income Distribution: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 19(3), pages 975-1028, September.
  9. Bruce D. Meyer & James X. Sullivan, 2003. "Measuring the Well-Being of the Poor Using Income and Consumption," NBER Working Papers 9760, National Bureau of Economic Research, Inc.
  10. Neeraj Kaushal & Robert Kaestner, 2001. "From Welfare to Work: Has Welfare Reform Worked?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 20(4), pages 699-719.
  11. Mark Levitan & Christine D'Onofrio & Gayatri Koolwal & John Krampner & Daniel Scheer & Todd Seidel & Vicky Virgin, 2010. "Using the American community survey to create a National Academy of Sciences-style poverty measure: Work by the New York City Center for Economic Opportunity," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 29(2), pages 373-386.
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