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Estimating Monthly Poverty Rates in the United States

Author

Listed:
  • Zachary Parolin

    (Bocconi University, Columbia University)

  • Megan Curran

    (Columbia University)

  • Jordan Matsudaira

    (Teacher's College, Columbia University)

  • Jane Waldfogel

    (Columbia University)

  • Christoper Wimer

    (Columbia University)

Abstract

Official poverty estimates for the United States are presented annually, based on a family unit’s annual resources, and reported with a considerable lag. This study introduces a framework to produce monthly estimates of the Supplemental Poverty Measure and official poverty measure, based on a family unit’s monthly income, and with a two-week lag. We argue that a shorter accounting period and more timely estimates of poverty better account for intra-year income volatility and better inform the public of current economic conditions. Our framework uses two versions of the Current Population Survey to estimate monthly poverty given observed changes in demographic and labor market characteristics. Validation tests demonstrate that our monthly estimates of poverty closely align with observed trends in the Survey of Income & Program Participation from 2004 to 2016 and trends in well-being during the COVID-19 pandemic. We apply the framework to measure trends in monthly poverty from January 1994 through September 2021. Monthly poverty rates generally declined in the 1990s, increased throughout the 2000s, and declined after the Great Recession through the onset of the COVID-19 pandemic. Within-year variation in monthly poverty rates, however, has generally increased. Among families with children, within-year variation in monthly poverty rates is comparable to between-year variation, largely due to the average family with children receiving 37 percent of its annual income transfers in a single month through onetime tax credit payments. Moving forward, researchers can apply our framework to produce monthly poverty rates whenever more timely estimates are desired.

Suggested Citation

  • Zachary Parolin & Megan Curran & Jordan Matsudaira & Jane Waldfogel & Christoper Wimer, 2021. "Estimating Monthly Poverty Rates in the United States," Poverty and Social Policy Brief 20415, Center on Poverty and Social Policy, Columbia University.
  • Handle: RePEc:aji:briefs:20415
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    File URL: https://www.povertycenter.columbia.edu/s/Estimating-Monthly-Poverty-CPSP-2022.pdf
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    References listed on IDEAS

    as
    1. Neil Bania & Laura Leete, 2009. "Monthly household income volatility in the U.S., 1991/92 vs. 2002/03," Economics Bulletin, AccessEcon, vol. 29(3), pages 2100-2112.
    2. Maggie R. Jones & James P. Ziliak, 2022. "The Antipoverty Impact of the EITC: New Estimates from Survey and Administrative Tax Records," National Tax Journal, University of Chicago Press, vol. 75(3), pages 451-479.
    3. Liana Fox & Christopher Wimer & Irwin Garfinkel & Neeraj Kaushal & Jane Waldfogel, 2015. "Waging War on Poverty: Poverty Trends Using a Historical Supplemental Poverty Measure," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 34(3), pages 567-592, June.
    4. Zachary Parolin & Megan Curran & Christoper Wimer, 2020. "The CARES ACT and Poverty in the COVID-19 Crisis: Promises and Pitfalls of the Recovery Rebates and Expanded Unemployment Benefits," Poverty and Social Policy Brief 2048, Center on Poverty and Social Policy, Columbia University.
    5. Nolan, Brian & Whelan, Christopher T., 2011. "Poverty and Deprivation in Europe," OUP Catalogue, Oxford University Press, number 9780199588435.
    6. Zachary Parolin & Christoper Wimer, 2020. "Forecasting Estimates of Poverty During the COVID-19 Crisis," Poverty and Social Policy Brief 2046, Center on Poverty and Social Policy, Columbia University.
    7. Christopher Wimer & Liana Fox & Irwin Garfinkel & Neeraj Kaushal & Jane Waldfogel, 2016. "Progress on Poverty? New Estimates of Historical Trends Using an Anchored Supplemental Poverty Measure," Demography, Springer;Population Association of America (PAA), vol. 53(4), pages 1207-1218, August.
    8. Zachary Parolin, 2020. "Monthly Poverty Rates in the United States during the COVID-19 Pandemic," Poverty and Social Policy Brief 20409, Center on Poverty and Social Policy, Columbia University.
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    poverty; social policy;

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