COMMITTEE ON NATIONAL STATISTICS

An Updated Measure of Poverty: (Re)Drawing the Line

A Consensus Study Report of

Federal Committee on Statistical Methodology

October 26, 2023
JAMES P. ZILIAK, University of Kentucky (Panel Chair)

RANDALL K.Q. AKEE, , UCLA

SARAH E. BOHN, Public Policy Institute of California

INDIVAR DUTTA-GUPTA, Center for Law and Social Policy

INGRID GOULD ELLEN, New York University

BRADLEY L. HARDY, Georgetown University

DAVID S. JOHNSON, University of Michigan (now CNSTAT)

SANDERS KORENMAN, CUNY 

HELEN G. LEVY, University of Michigan

JORDAN D. MATSUDAIRA, Columbia University

JOSÉ D. PACAS, Kids First Chicago 

MICHELE VER PLOEG, Economic Research Service, USDA

JANE WALDFOGEL, Columbia University

BARBARA L. WOLFE, University of Wisconsin-Madison

CHRISTOPHER D. MACKIE, Study Director

CONSTANCE F. CITRO, Senior Scholar

ANTHONY S. MANN, Program Associate
Dedication and Acknowledgements

This report is dedicated to the memory of our friend and former Chancellor 

of the University of Wisconsin-Madison, Rebecca Blank, who passed away on 

February 17, 2023.

Becky served as review coordinator of the report along with Robert Moffitt. 

We thank Robert for his guidance, along with the very detailed and helpful 

comments of 7 external reviewers on a preliminary draft.
Excerpts from Statement of Task • Assist the Census Bureau and the Bureau of Labor Statistics to ensure that the SPM is 

fulfilling its mandate to provide information on aggregate levels of economic need that 

informs public understanding of economic conditions and trends affecting people with 

lower incomes. 

• Consider modifications that would increase its (SPM) value to policy makers and 

researchers for the uses to which it is, or potentially could be, applied.

• Review methods for adjusting poverty thresholds, addressing survey quality issues, and 

assessing the potential role of alternative data sources for poverty measurement 

purposes.

• Focus of the report is on changes that may be considered for revision cycles beyond 

2021. 
Report Contents

0 Summary

1 Introduction

2 Conceptual Basis of the Supplemental Poverty Measure

3 Treatment of Medical Care in the Proposed Principal Poverty Measure

4 Challenging Categories: Childcare 

5 Challenging Categories: Housing/Shelter

6 Data and Statistical Issues 
Evolution: OPM  SPM  PPM

Measure Poverty Threshold Resources Unit

OPM 3*Food (1963)

• Varies by family size

Income (pre-tax) Family

SPM Food, Clothing, Shelter, 

Utilities, Phone, 

Internet, and “a little 

extra”

• Varies by SPM family, renters 

and owners, cost of housing

OPM Income + in-kind 

benefits + tax credits –

medical oop – child support 

paid – work expenses 

(includes childcare) – tax 

payments

SPM Family

PPM Adds health insurance 

and childcare as basic 

needs. Modifies SPM 

treatment of housing

Modifies SPM treatment of 

health insurance, childcare, 

and housing to balance 

changes to threshold

Household
Big Picture, Ch 2

Recommendation 2.1: Due to its vital role in tracking the effects of public policies and 

programs on the size and composition of the population living in or near poverty, and its 

resulting status as the preferred measure of many researchers and policy makers, the 

Supplemental Poverty Measure should be elevated to the nation’s headline poverty statistic 

and renamed accordingly (e.g., to the Principal Poverty Measure).

Recommendation 2.4: For the Principal Poverty Measure, the set of threshold categories 

should be expanded beyond the current food, clothing, shelter, utilities, telephone, and 

internet (FCSUti) to explicitly recognize that minimum basic needs—as well as policies 

designed to help households meet those needs—have evolved since the establishment of 

the Supplemental Poverty Measure.
Medical Care, Ch 3

Recommendation 3.1: For the Principal Poverty Measure, the current approach to 

medical spending in the Supplemental Poverty Measure should be replaced with one that 

includes health insurance in the estimates of both the needs threshold and resources. 

Recommendation 3.2: For individuals under age 65 (excluding those who have Medicare 

due to disability), the Affordable Care Act (ACA) benchmark health insurance plan should 

be used to represent the basic health insurance need for a typical American household (or 

the designated resource-sharing unit for poverty measurement)...

Recommendation 3.3: For the population age 65 and older covered by Medicare, as well 

as those under 65 who qualify for Medicare based on disability, the basic need level should 

be set based on the full cost of a Medicare Advantage plan that provides prescription drug 

coverage...,
Medical Care, Ch 3 cont.

Recommendation 3.4: The definition of resources in the Principal Poverty Measure should 

include a value for any health insurance benefits or subsidies received from an employer or 

from the government ...This is achieved by capping the value of the transfer that is added 

to resources at an amount that is less than or equal to the health insurance need that is 

added to the threshold. 

Recommendation 3.5: Medical out-of-pocket spending should be subtracted from 

resources in the Principal Poverty Measure. For individuals who are not covered by 

Medicare, this subtraction should be capped at the out-of-pocket maximum for Affordable 

Care Act Marketplace plans or lower, depending on health insurance status and other 

household characteristics...
Childcare, Ch 4

Recommendation 4.1: ... parents who are in education or training should be treated like 

parents who are employed, and a parent who is not working and is disabled should not be 

assumed to be available to provide childcare while the other parent is working or in 

education/training. 

Recommendation 4.2: For households ... using paid childcare (paid out of pocket and/or 

subsidized), a basic childcare need should be included in the threshold. In the near future, 

the Census Bureau should conduct research to develop and implement a methodology for 

defining the amount of this basic childcare need, varying by age and number of children, 

geographic location, and hours of paid care used.
Childcare, Ch 4 cont.

Recommendation 4.3: ... for households that have children and that use paid childcare, in 

the near future, the Census Bureau should research, develop, and implement a 

methodology for valuing assistance received by the household for childcare, so that it can 

enter into the calculation of the household’s available resources.

Recommendation 4.4: Recognizing that many households with children do not use paid 

childcare and are providing care for their children themselves, whether through parental 

care or care by other relatives or friends, future discussion and research are needed on the 

topic of unpaid childcare and whether and how such care should be reflected in poverty 

measurement .
Housing/Shelter, Ch. 5

Recommendation 5.1: The Principal Poverty Measure housing thresholds should be set 

based on shelter costs for renters only. Rental levels should be based on the Department of 

Housing and Urban Development’s annual Fair Market Rent estimates for various shelter 

unit sizes, ....

Recommendation 5.3: The Principal Poverty Measure should discontinue the practice of 

maintaining separate thresholds for homeowners with a mortgage, homeowners without a 

mortgage, and renters....
Housing/Shelter, Ch. 5 cont.

Recommendation 5.6: For estimating Principal Poverty Measure unit resources, implicit 

rental income should be included for households that own homes. In the short run, this 

implicit rental income could be the local Fair Market Rent (FMR) value for the particular 

family size, minus user costs—implying that implicit rental income will automatically be 

capped at the housing cost threshold. ....

Recommendation 5.7: Homeowners’ user costs in the local area—including mortgage 

interest payments, property taxes, insurance, and other maintenance expenses—should be 

netted out of the implicit rental income when estimating Principal Poverty Measure (PPM) 

unit resources..... 
Data and Statistical Issues, Ch. 6

Recommendation 6.1: The Census Bureau should prioritize its work to improve poverty 

measurement using data from the American Community Survey (ACS) as a springboard to 

the development of an ACS-based Principal Poverty Measure (PPM) that is released, along 

with the one-year ACS data, in September of each year.

Recommendation 6.2: The Census Bureau should expand the use of administrative data 

(income and program benefits) to improve estimates of resources in the Principal Poverty 

Measure (PPM). .. In particular, the Census Bureau should aggressively explore the strategy 

of using federal and state administrative records to improve models for imputation for 

item nonresponse, including nonreporting of receipt as well as amounts. 

Recommendation 6.3: In developing a PPM that integrates administrative data to the 

greatest extent possible, the Census Bureau should produce a historical series comparing 

an experimental Supplemental Poverty Measure (SPM) that aggressively links administrative 

data into estimates with the SPM produced using current methods. 
Future Developments

• The PPM will need regular review to ensure that it is adequately meeting its intended 

goal of measuring the economic fortunes of households in the US

• Areas in need of future research include

– Treatment of childcare in nonworking households

– Moving food from expenditures to policy based measure

– Adding transportation as a basic need in the threshold

– Whether and how to account for assets and debts