The Use and Misuse of Income Data and Extreme Poverty in the United States

Meyer, Bruce D.; Wu, Derek; Mooers, Victoria; Medalia, Carla

doi:10.3386/w25907

Cited by 21 publications

(26 citation statements)

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“…this journal 2012; Bollinger et al forthcoming). Recent work using administrative data has demonstrated that survey data understates the incomes of low-income men and overstates incidence of extreme poverty(Meyer and Mittag 2015;Meyer et al 2018). However, this work tends to confirm the notion that men with a weak attachment to the workforce largely persist on the incomes of other household members.…”

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confidence: 75%

The Declining Labor Market Prospects of Less-Educated Men

Binder

Bound

2019

Journal of Economic Perspectives

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Over the last half century, US wage growth stagnated, wage inequality rose, and the labor-force participation rate of prime-age men steadily declined. In this article, we examine these worrying labor market trends, focusing on outcomes for males without a college education. Though wages and participation have fallen in tandem for this population, we argue that the canonical neoclassical framework, which postulates a labor demand curve shifting inward across a stable labor supply curve, does not reasonably explain the data. Alternatives we discuss include adjustment frictions associated with labor demand shocks and effects of the changing marriage market—that is, the fact that fewer less-educated men are forming their own stable families—on male labor supply incentives. In the synthesis that emerges, the phenomenon of declining prime-age male labor-force participation is not coherently explained by a series of causal factors acting separately. A more reasonable interpretation, we argue, involves complex feedbacks between labor demand, family structure, and other factors that have disproportionately affected less-educated men.

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confidence: 75%

The Declining Labor Market Prospects of Less-Educated Men

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Bound

2019

Journal of Economic Perspectives

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“…They also adjust for selfemployment, but we have already excluded the lowest-income self-employed people in our figures. These adjustments move many extremely poor people to the deeply poor category, and Meyer et al (2019) find that those moved up by the receipt of inkind benefits appear to be among the most materially deprived Americans.…”

Section: Discussionmentioning

confidence: 96%

“…Some detailed studies on the underreporting of income were carried out in the US. Recent articles by Mittag (2019) and Meyer et al (2019) discuss these adjustments. One method of adjustment for underreporting comes from the Urban Institute's TRIM3 model (Wheaton 2008), which adjusts for the underreporting of some kinds of benefits.…”

Section: Discussionmentioning

confidence: 99%

“…Mittag (2019) finds that TRIM overadjusts for underreporting, suggesting that factor alone should move the "correct" TRIM estimate above 3%. Meyer et al (2019) use administrative data to adjust for benefit underreporting and mainly discuss extreme poverty (at $2 a day). They find that few persons live yearlong on incomes below $2 a day after all adjustments are made, many of them based on dubious principles (e.g.…”

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confidence: 99%

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Deep and Extreme Child Poverty in Rich and Poor Nations: Lessons from Atkinson for the Fight Against Child Poverty

Cai

Smeeding

2019

Ital Econ J

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The paper documents child poverty levels and trends using both relative ('deep') and absolute ('extreme') measures in two clusters: Anglo-Saxon high-income countries and upper middle-income countries. We also investigate the influence of different components of household income and other resources on child deep-poverty rates to examine the role of the market and the redistributive effects that materialize through private transfers, public benefits, and tax systems on generating poverty reduction. Overall, middle-income nations have witnessed continuous reductions in their extreme child poverty rates, while mild decreases or fluctuations have been observed in the five high-income nations, with the US highlighted by its relatively high rates of deep and extreme poverty regardless of absolute or relative measures and type of equivalence scale used. Private institutions play a larger role in poverty reduction in middle-income nations compared to its impact on developed nations. The degree of dependence on universal or assistance benefits varies among high-income nation. In the US, universal programs tend to be meager, while Australian social insurance and universal benefit are robust in their fight against deep poverty. Brazil stands out by its overwhelmingly large proportion of social insurance programs that contribute to improvements of its deep child poverty situation, and South Africa's assistance benefit system performs better in lifting children out of deep poverty.

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“…Because TANF receipt has declined (Danziger 2010;Moffitt 2015;Parolin 2019b), Edin and Shaefer (2015) infer that the 1996 welfare reform contributed to the rise of extreme poverty. In response, a contentious debate has ensued about the levels, trends, and source of deep/extreme poverty (Jencks 2016;Meyer et al 2018;Shaefer and Edin 2018;Winship 2016). For instance, Meyer and colleagues (2018: 1) conclude: "An implication of the low recent level of extreme poverty is that it cannot have risen substantially over time or due to welfare reform.…”

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The Levels and Trends in Deep and Extreme Poverty in the U.S., 1993-2016

Brady¹,

Parolin²

2019

Preprint

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Recently, there has been tremendous interest in deep and extreme poverty in the U.S. We advance beyond prior research by using higher-quality data, improving measurement, and following leading standards in international income research. We estimate deep (measured as less than 20% of medians) and extreme (measured as less than 10% of medians) poverty in the U.S. from 1993-2016. Using the Current Population Survey, we match the income definition of the Luxembourg Income Study and adjust for underreporting using Urban Institute’s TRIM3 model. In 2016, we estimate 5.2 to 7.2 million Americans (1.6-2.2%) were deeply poor and 2.6 to 3.7 million (.8-1.2%) were extremely poor. While deep and extreme poverty fluctuated over time, including declines from 1993-1995 and 2007-2010, we find significant increases from lows in 1995 to peaks in 2016 in both deep (increases of 48-93%) and extreme poverty (increases of 54-111%). We even find significant increases with thresholds anchored at 1993 medians. Adding homelessness, deep poverty would be 7-8% higher and extreme poverty would be 19-23% higher in 2016, which suggests our estimates are probably lower-bounds. The rise of deep/extreme poverty is concentrated among childless households. Among households with children, the expansion of SNAP benefits has led to declines in deep/extreme poverty. Ultimately, we demonstrate that estimates of deep/extreme poverty depend critically on the quality of income measurement.

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The Use and Misuse of Income Data and Extreme Poverty in the United States

Abstract: NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

Cited by 21 publications

References 0 publications

The Declining Labor Market Prospects of Less-Educated Men

The Declining Labor Market Prospects of Less-Educated Men

Deep and Extreme Child Poverty in Rich and Poor Nations: Lessons from Atkinson for the Fight Against Child Poverty

The Levels and Trends in Deep and Extreme Poverty in the U.S., 1993-2016

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