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Report Number P60-205
By Kathleen Short, Thesia Garner, David Johnson, and Patricia Doyle
Component ID: #ti304941041

Executive Summary

This report presents experimental measures of poverty in the United States. These measures are illustrative variations of the recommendations of the Panel on Poverty and Family Assistance: Concepts, Information Needs, and Measurement Methods of the National Research Council.1 The experimental measures presented here:

  • Incorporate, in a way that the official measure does not, the effects of key government policies aimed at the most needy families in the United States.
  • Use an after-tax income measure.
  • Add the value of in-kind benefits, such as food stamps, to income.
  • Take account of variations in expenses that are necessary to hold a job or to obtain medical care.

Key Findings

  • Considering all in-kind transfers together reduces the incidence of poverty substantially, even though the reductions from any single program are generally quite small.
  • The increase in poverty rates when one accounts for necessary expenses can be substantial but depends on the method used to value those expenses.
  • Because of the earned income credit, deducting taxes from income on balance reduces the percentage of people who are viewed as being poor.

1 Citro, Constance F. and Robert T. Michael (eds.), Measuring Poverty: A New Approach, Washington, DC: National Academy Press, 1995.

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