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A Modern Framework for Measuring Poverty and Basic Economic Security

  • Shawn Fremstad

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.

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Paper provided by Center for Economic and Policy Research (CEPR) in its series CEPR Reports and Issue Briefs with number 2010-12.

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Length: 66 pages
Date of creation: Apr 2010
Date of revision:
Handle: RePEc:epo:papers:2010-12
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  1. Sherraden, Michael (ed.), 2005. "Inclusion in the American Dream: Assets, Poverty, and Public Policy," OUP Catalogue, Oxford University Press, number 9780195168204, March.
  2. 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).
  3. 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.
  4. 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, 03.
  5. 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.
  6. 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.
  7. 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.
  8. Peiyun She Gina Livermore, 2007. "Material Hardship Poverty and Disability Among WorkingAge Adults," Mathematica Policy Research Reports fb2c5aebc38446e3ab7f48e96, Mathematica Policy Research.
  9. Bruce D. Meyer & James X. Sullivan, 2007. "Further Results on Measuring the Well-Being of the Poor Using Income and Consumption," NBER Working Papers 13413, National Bureau of Economic Research, Inc.
  10. 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.
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