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The Survey of Income and Program Participation (SIPP) provides a wealth of information to analyze the economic situation of people in the United States. It offers detailed information on cash and non-cash income, while also collecting data on taxes, assets, liabilities, and participation in government transfer programs. The SIPP data allow the government to evaluate the effectiveness of federal, state, and local programs.
The Department of Health, Education, and Welfare (HEW) initiated SIPP in 1975. In collaboration with the Census Bureau, HEW spent the next five years testing and designing a longitudinal survey, under the auspices of the Income Survey Development Program. The first nationwide test of approximately 2,000 households occurred in 1978. A truly representative national sample of 8,200 households was surveyed in 1979.
In 1981, however, HEW lost its funding for the Income Survey Development Program, and work on SIPP halted. In 1983, the Census Bureau received funding that allowed it to continue the survey, which officially launched in October of that year.
The original design of SIPP focused on a nationally representative sample of households, with every person of 15 years or older being interviewed. Four months after the initial interview, respondents were surveyed again; this process repeated over a 32-month period. Each February, a new group of respondents was interviewed, creating an overlapping series of survey panels.
During the late 1980s, SIPP suffered from erratic and sometimes limited funding. Although each survey panel was supposed to go through eight interviews, this often was not the case. The 1989 panel, part of which was simply folded into the 1990 panel, was only interviewed three times. Funding problems also limited panel sizes. Each was supposed to be comprised of about 20,000 households, but that number was rarely achieved.
The Census Bureau redesigned the SIPP in 1996. Instead of several overlapping 32-month panels, the Census Bureau began interviewing a single, larger panel over a four-year period. Enumerators interviewed respondents twelve or thirteen times over the course of the panel; about three times per year. In 1996, the Census Bureau also introduced computer-assisted interviewing (CAI), which allowed for faster data processing and for real-time answer consistency checks.
Today, SIPP is one of the best and most complete measures of the wealth of average Americans. It also is a vital tool to measure the effect of the welfare reforms of the mid-1990s.