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A Modern Framework for Measuring Poverty and Basic Economic Security

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  • Shawn Fremstad

Abstract

This report details how the dominant framework for understanding and measuring poverty in the United States has become a conservative one. The current U.S. approach to measuring poverty views poverty only in terms of having an extremely low level of annual income, and utilizes poverty thresholds that are adjusted only for inflation rather than for changes in overall living standards. As a result, the official poverty measure has effectively defined deprivation down over the last four decades, moving it further and further away from mainstream living standards over time, as well as from majority public opinion of the minimum amount needed to “get along” at a basic level. A new Supplemental Income Poverty Measure (SIPM) proposed by the Obama administration makes some important improvements to the current poverty measure. However, the SIPM remains a conservative approach that appears likely to lock in the poverty line at an extremely low level. This report proposes a new framework for measuring poverty and basic economic security in the United States. Instead of being limited to the “extremely-low-income-only” approach the current poverty line and administration’s proposed Supplemental Income Poverty Measure (SIPM) represent, this framework should utilize measures of low income and other forms of economic hardship related to low income.

Suggested Citation

  • Shawn Fremstad, 2010. "A Modern Framework for Measuring Poverty and Basic Economic Security," CEPR Reports and Issue Briefs 2010-12, Center for Economic and Policy Research (CEPR).
  • Handle: RePEc:epo:papers:2010-12
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    File URL: http://www.cepr.net/documents/publications/poverty-2010-04.pdf
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    References listed on IDEAS

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    1. Peter Saunders & Yuvisthi Naidoo, 2009. "Poverty, Deprivation and Consistent Poverty," The Economic Record, The Economic Society of Australia, vol. 85(271), pages 417-432, December.
    2. 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.
    3. Bruce D. Meyer & James X. Sullivan, 2007. "Further Results on Measuring the Well-Being of the Poor Using Income and Consumption," Working Papers 0719, Harris School of Public Policy Studies, University of Chicago.
    4. Peiyun She & Gina A. Livermore, 2007. "Material Hardship, Poverty, and Disability Among Working-Age Adults," Social Science Quarterly, Southwestern Social Science Association, vol. 88(4), pages 970-989.
    5. Peiyun She & Gina A. Livermore, "undated". "Material Hardship, Poverty, and Disability Among Working-Age Adults," Mathematica Policy Research Reports fb2c5aebc38446e3ab7f48e96, Mathematica Policy Research.
    6. Danilo Pelletiere & Hye Jin Rho & Dean Baker, 2009. "Hitting Bottom? An Updated Analysis of Rents and the Price of Housing in 100 Metropolitan Areas," CEPR Reports and Issue Briefs 2009-28, Center for Economic and Policy Research (CEPR).
    7. Sherraden, Michael (ed.), 2005. "Inclusion in the American Dream: Assets, Poverty, and Public Policy," OUP Catalogue, Oxford University Press, number 9780195168204.
    8. Trudi J. Renwick & Barbara R. Bergmann, 1993. "A Budget-Based Definition of Poverty: With an Application to Single-Parent Families," Journal of Human Resources, University of Wisconsin Press, vol. 28(1), pages 1-24.
    9. Tania Burchardt & Asghar Zaidi, 2003. "Comparing incomes when needs differ: Equivalisation for the extra costs of disability in the UK," CASE Papers case64, Centre for Analysis of Social Exclusion, LSE.
    10. Asghar Zaidi & Tania Burchardt, 2005. "Comparing Incomes When Needs Differ: Equivalization For The Extra Costs Of Disability In The U.K," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 51(1), pages 89-114, March.
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    Cited by:

    1. Shawn Fremstad, 2012. "Married … without Means: Poverty and Economic Hardship Among Married Americans," CEPR Reports and Issue Briefs 2012-26, Center for Economic and Policy Research (CEPR).
    2. Shawn Fremstad, 2011. "Maintaining and Improving Social Security for Poorly Compensated Workers," CEPR Reports and Issue Briefs 2011-23, Center for Economic and Policy Research (CEPR).

    More about this item

    Keywords

    poverty; disability; poverty level; poverty measure;

    JEL classification:

    • I - Health, Education, and Welfare
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J - Labor and Demographic Economics
    • J1 - Labor and Demographic Economics - - Demographic Economics
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy

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