1 Impact of Poverty Programs. Measuring the Impact of Poverty Programs One key question is how effective have all of our poverty programs been at alleviating.

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Presentation transcript:

1 Impact of Poverty Programs

Measuring the Impact of Poverty Programs One key question is how effective have all of our poverty programs been at alleviating poverty? Again though, key to this exercise is determining how to measure poverty. 2

Measuring the Impact of Poverty Programs Official Poverty Measure (OPM) May understate poverty by not adjusting to situations of different types of individuals (e.g., out-of-pocket healthcare for the elderly, work expenses like childcare, cost- of-living decreases across cities). May overstate poverty as it doesn’t take into many of our poverty programs (e.g., food stamps, housing benefits) 3

Measuring the Impact of Poverty Programs Supplemental Poverty Measure (SPM) Developed by Census Bureau around 2010 to better measure poverty. Regionally adjusted and age adjusted. Constructed to be 1.2 * the amount spent on food, clothing, and shelter by families in the 36 th percentile of such spending. In “Income” includes wages and earning, gov’t cash assistance (TANF, Unemployment, Disability, Social Security), as well as near cash assistance (food stamps, school lunches, WIC, housing assistance energy assistance). Income is calculated after tax, so things like Soc Security, Federal and State taxes are taken out, but tax credits like EITC are added in. 4

Measuring the Impact of Poverty Programs Fox, Garfinkel, Kaushal, Waldfogel, and Wimer “Waging War on Poverty: Historical Trends in Poverty Using the SPM” Research Question? Data Current Population Survey (CPS) Monthly nationally representative survey primarily used to measure unemployment rates in the US. Once a year, additional demographic and annual income data is collected (March Supplement). Poverty status of each household collected and this is where official poverty rates come from. What is a key issue that they have to overcome? 5

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Measuring the Impact of Poverty Programs Summary Fraction of US population in poverty has stayed pretty constant over the last 30 years. However, in absence of our social safety net programs, poverty would have been substantially larger. EITC has been an increasingly important component of our poverty policy. Do the results coming from this paper suggest our poverty programs have been successful? 14

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