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Did We Lose the War on Poverty?

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  • Dale W. Jorgenson

Abstract

Official U.S. poverty statistics based on household income imply that the proportion of the U.S. population below the poverty level reached a minimum in 1973, giving rise to the widespread impression that the elimination of poverty is impossible. By contrast, poverty estimates based on household consumption have fallen through 1989 and imply that the war on poverty was a success. This paper recommends replacing income by consumption in official estimates of poverty in order to obtain a more accurate assessment of the impact of income support programs and economic growth on the level and distribution of economic well-being among households.

Suggested Citation

  • Dale W. Jorgenson, 1998. "Did We Lose the War on Poverty?," Journal of Economic Perspectives, American Economic Association, vol. 12(1), pages 79-96, Winter.
  • Handle: RePEc:aea:jecper:v:12:y:1998:i:1:p:79-96
    Note: DOI: 10.1257/jep.12.1.79
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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.12.1.79
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    References listed on IDEAS

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    1. Jorgenson, Dale W & Slesnick, Daniel T, 1999. "Indexing Government Programs for Changes in the Cost of Living," Journal of Business & Economic Statistics, American Statistical Association, vol. 17(2), pages 170-181, April.
    2. Gary S. Becker, 1981. "A Treatise on the Family," NBER Books, National Bureau of Economic Research, Inc, number beck81-1, April.
    3. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    4. Browning, Martin, 1992. "Children and Household Economic Behavior," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1434-1475, September.
    5. Lewbel, Arthur, 1989. "Household equivalence scales and welfare comparisons," Journal of Public Economics, Elsevier, vol. 39(3), pages 377-391, August.
    6. Milton Friedman, 1957. "A Theory of the Consumption Function," NBER Books, National Bureau of Economic Research, Inc, number frie57-1, April.
    7. Shelly Lundberg & Robert A. Pollak, 1996. "Bargaining and Distribution in Marriage," Journal of Economic Perspectives, American Economic Association, vol. 10(4), pages 139-158, Fall.
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    Citations

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    Cited by:

    1. Raghbendra Jha & Bagala Biswal & Urvashi D. Biswal, 2001. "An Empirical Analysis of the Impact of Public Expenditures on Education and Health on Poverty in Indian States," ASARC Working Papers 2001-05, The Australian National University, Australia South Asia Research Centre.
    2. Urvashi Dhawan-Biswal, 2002. "Consumption and Income Inequality: The Case of Atlantic Canada from 1969­1996," Canadian Public Policy, University of Toronto Press, vol. 28(4), pages 513-537, December.
    3. Robert H. DeFina, 2002. "The impact of unemployment on alternative poverty measures," Working Papers 02-8, Federal Reserve Bank of Philadelphia.
    4. Atasoy, Sibel & Mills, Bradford F. & Mykerezi, Elton, 2008. "Intensity of Food Stamp Use and Transient and Chronic Poverty: Evidence from the Panel Study of Income Dynamics," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6541, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Michael D. Hurd & Susann Rohwedder, 2007. "Economic Well-Being at Older Ages Income- and Consumption-Based Poverty Measures in the HRS," Working Papers WR-410, RAND Corporation.
    6. Ian Irvine & Kuan Xu, 2002. "Crime, Punishment and Poverty in the United States," Department of Economics at Dalhousie University working papers archive uspov, Dalhousie, Department of Economics.
    7. Wu, Ximing & Perloff, Jeffrey M., 2004. "China's Income Distribution Over Time: Reasons for Rising Inequality," Institute for Research on Labor and Employment, Working Paper Series qt9jw2v939, Institute of Industrial Relations, UC Berkeley.
    8. Kuan Xu & Ian Irvine, 2002. "Crime, Punishment and the Measurement of Poverty in the United States, 1979-1997," LIS Working papers 333, LIS Cross-National Data Center in Luxembourg.
    9. Michael Hurd & Susann Rohwedder, 2006. "Consumption and Economic Well-Being at Older Ages: Income- and Consumption-Based Poverty Measures in the HRS," Working Papers wp110, University of Michigan, Michigan Retirement Research Center.
    10. Ximing Wu & Jeffrey M. Perloff, 2005. "China's Income Distribution, 1985-2001," The Review of Economics and Statistics, MIT Press, vol. 87(4), pages 763-775, November.
    11. David Brady, 2003. "The Poverty of Liberal Economics," LIS Working papers 343, LIS Cross-National Data Center in Luxembourg.
    12. David Brady, 2002. "Rethinking the Sociological Measurement of Poverty," LIS Working papers 264, LIS Cross-National Data Center in Luxembourg.
    13. Michael D. Hurd & Susann Rohwedder, 2006. "Economic Well-Being at Older Ages: Income- and Consumption-Based Poverty Measures in the HRS," NBER Working Papers 12680, National Bureau of Economic Research, Inc.
    14. Sami Bibi, 2001. "Comparing Effects of General Subsidies and Targeted Transfers on Poverty: Robustness Analysis Using Data Set from Tunisia," Working Papers 0125, Economic Research Forum, revised 09 Jun 2001.
    15. Jones, Carol Adaire & Milkove, Daniel & Paszkiewicz, Laura, 2009. "Measuring Farm Household Well-Being: Comparing Consumption and Income-based Measures," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49355, Agricultural and Applied Economics Association.
    16. Self, Sharmistha & Grabowski, Richard, 2006. "The Asian Financial Crisis: Impact on Human Development," Review of Applied Economics, Review of Applied Economics, vol. 2(2).
    17. Marcia K. Meyers & Irwin Garfinkel, 1999. "Social indicators and the study of inequality," Economic Policy Review, Federal Reserve Bank of New York, issue Sep, pages 149-163.

    More about this item

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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