Tonights Discussion

1
Tonights Discussion

• Corrections to current poverty measure
• Recognizing the impact of means-tested benefits
• Estimating unreported income
• Next steps Comparing trends

2
Correcting current measure
Pre-tax, pre-transfer (includes Social
Security)to show market income roughly

• Compared to current, excludes means-tested TANF
  and SSI

Major options

• Household income (cohabitors)
• Equivalence scale (adjustment for family size)
• Inflation adjustor (CPI-U-RS to 1978, later
  CPI-U-X1 to 1967)
• Return on home equity (government bond interest
  rate)

Distributional/Political implications

• State to state and children vs. elderly changes

3
Impact of means-tested benefits
Post-tax, post-transfer an anti-poverty index
Means-tested benefits included

• EITC, TANF, SSI food stamps WIC school meals
• housing assistance and energy assistance

Excluded

• Medical benefits and child care

Minus income and payroll taxes
4
Estimating Unreported Income
Estimated unreported income included

• TANF
• SSI
• Food stamps

Major forms of income not estimated

• Wages and salaries self-employment income
  Social Security property income illegal income
  and gifts

Future efforts
5
Comparing Trends
Anti-Poverty Index vs. consumption trends,
and vs. well-being trends
Next two meetings Consolidation Broader audience