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Written by John Creamer, Social, Economic and Housing Statistics Division
Estimated Read Time: 3 minutes.
There has been continued debate about the best way to measure poverty in the United States since the first official U.S. poverty statistics were published in the mid-1960s. The U.S. Census Bureau releases two poverty measures each September. The first, called the official poverty measure, is based on cash resources. The second, the Supplemental Poverty Measure (SPM), includes both cash and noncash benefits and subtracts necessary expenses (such as taxes and medical expenses).
The official poverty measure has remained mostly unchanged since it was introduced in the mid-1960s. In contrast, the SPM was designed to improve as new data and methods become available. This blog discusses the development of the SPM and differences between the two measures.
In 2010, an interagency technical working group (ITWG) asked the Census Bureau and the U.S. Bureau of Labor Statistics (BLS) to develop a new measure designed to improve our understanding of the economic well-being of American families and enhance our ability to measure the effect of federal policies on those living in poverty. The result was the SPM, which draws on the recommendations of a 1995 National Academy of Sciences report and research conducted over the following decades.
In 2016, a new ITWG was formed to review and implement potential SPM methodological improvements. The working group prioritized consistency between threshold and resource definitions, data availability, simplicity in estimation, stability of the measure over time and ease in explaining the methodology when considering potential improvements to the SPM. In September 2020, this working group voted to implement several improvements. Continue reading...
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