Working Paper: NBER ID: w19789
Authors: Liana Fox; Irwin Garfinkel; Neeraj Kaushal; Jane Waldfogel; Christopher Wimer
Abstract: Using data from the Consumer Expenditure Survey and the March Current Population Survey, we calculate historical poverty estimates based on the new Supplemental Poverty Measure (SPM) from 1967 to 2012. During this period, poverty as officially measured has stagnated. However, the official poverty measure (OPM) does not account for the effect of near-cash transfers on the financial resources available to families, an important omission since such transfers have become an increasingly important part of government anti-poverty policy. Applying the SPM, which does count such transfers, we find that historical trends in poverty have been more favorable than the OPM suggests and that government policies have played an important and growing role in reducing poverty --- a role that is not evident when the OPM is used to assess poverty. We also find that government programs have played a particularly important role in alleviating child poverty and deep poverty, especially during economic downturns.
Keywords: Poverty; Supplemental Poverty Measure; Government Programs
JEL Codes: I32
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Government programs (H53) | Reduced poverty rates (I32) |
| Without government benefits (H53) | Increased poverty rate (I32) |
| Government programs (H53) | Reduced child poverty (I32) |
| Government programs (H53) | Reduced deep poverty (I32) |
| Government programs (1967) (H53) | Reduced poverty by 6 percentage points (I32) |
| Government programs (2012) (H53) | Reduced poverty by 15 percentage points (I32) |
| SPM (C87) | More accurate representation of poverty trends (I32) |
| OPM (L32) | Less accurate representation of poverty trends (I32) |