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The “Inability to Be Self-Reliant” as an Indicator of Poverty: Trends in the United States, 1975–1995

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  • R. Haveman
  • A. Bershadker

Abstract

The trend in national policy over the past two decades has emphasized self-reliance and a reduced role of government in society. Given this ideological shift, 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 now to have less policy relevance than in prior years. In this paper we present a new concept of poverty, the inability to be self-reliant, which is based on the ability of a family, using its own resources, to support a level of consumption in excess of needs. This concept closely parallels the “capability poverty” measure that has been proposed by Amartya Sen. We use this measure to examine the size and composition of the poor population from 1975 to 1995. We find that poverty in terms of self-reliance increased more rapidly over the 1975–95 period than did 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. However, these groups have also experienced the smallest increases in this poverty measure. Families largely thought to be economically secure, specifically those headed by whites, men, married couples, and highly educated individuals, while having the lowest levels of self-reliance poverty, have also experienced the largest increases in that measure. We speculate that the trends in self-reliance poverty stem largely from underlying trends in the U.S. economy, in particular the relative decline of wage rates among whites and men, and the rapidly expanding college-educated group.

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Bibliographic Info

Paper provided by University of Wisconsin Institute for Research on Poverty in its series Institute for Research on Poverty Discussion Papers with number 1171-98.

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Handle: RePEc:wop:wispod:1171-98

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