Poor in America

correctional facility inmates, are not included in the scope of this
survey. Similarly, U.S. citizens residing abroad and foreign visitors
to this country are excluded. With these exceptions, individuals aged
12 or older living in units designated for the sample were eligible to
be interviewed.

National Health Interview Survey

‘The data for this survey are collected by the Bureau of the Census for
the National Center for Health Statistics, through a continuing
nationwide survey of the health and other characteristics of household
members. A different, probability-sampled set of households with
civilian, noninstitutionalized occupants is interviewed each week of
the year. The data used for this study were collected between January
and December 1993. The reference period is the 12 months prior to
the date of the interview. The 1993 survey includes a total of 44,978
households containing 109,671 persons.

National Household Education Survey

Data used for this analysis were collected by Westat for the National
Center for Education Statistics in two components: School Readiness
and School Safety and Discipline. Data were collected from January
through April 1993, and the reference period was the period since the
beginning of the 1992-93 school year or “currently.” The education
survey is a telephone survey of the noninstitutional civilian population,
with households selected using random-digit-dialing methods.

For the 1993 survey, nearly 64,000 households were screened. Ap-
proximately 11,000 parents of 3- to 7-year-olds completed interviews
for the School Readiness component, and about 12,700 parents of chil-
dren in grades 3 through 12 and about 6,500 youth in grades 6 through
12 were interviewed for the School Safety and Discipline component.

National Maternal and Infant Health Interview Survey

Data for this survey were collected in 1989 and 1990 by the Bureau of
the Census for the National Center for Health Statistics. The reference
period is 1988 for data analyzed in this study.

Data were collected from stratified systematic samples drawn
from calendar-year 1988 vital records from 48 States, the District of
Columbia, and New York City. Mothers were mailed questionnaires
based on information from vital records. In order to ensure a represen-
tative sample with regard to such variables as age of mother and mari-
tal status, implicit stratification was employed. That is, after the live
birth records were stratified, further sorting of vital records was done
by age of mother and marital status within each of the live-birth strata.
Similar subsorting was done for fetal and infant death records.
Respondents included 9,953 women who had live births, 3,309 wo-
men who had late fetal deaths, and 5,332 women who had infant deaths.

Survey of Income and Program Participation

The data presented in the accompanying article were compiled
from the Extended Measures of Well-Being topical module.
Module questions were asked in wave 6 of the 1991 panel and
wave 3 of the 1992 panel of the Survey of Income and Program
Participation, an ongoing program of the Bureau of the Census,
The collection and reference periods are September through
December of 1992. The combined panels comprise responses
on living conditions by reference persons representing house-
holds totaling almost 85,000 persons.

16 Monthly Labor Review May 1996

These data were not imputed for nonresponse, and frequen-
cies thus are based only on the proportions of persons answer-
ing the questions. For the most part, nonresponse levels for these
questions were in the range of 1 or 2 percent.

Appendix B: Poverty rates across surveys

Most of the surveys used for this analysis include a variable that can
be used to determine whether a family or houschold’s income was
below the official Federal poverty threshold for its type during the
reference period of the survey. In most cases, annual before-tax in-
come is compared to the poverty thresholds. For example, when
data from the Current Population Survey are used, annual before-
tax cash income for a family is compared to the relevant poverty
threshold for the corresponding year. However, when data from the
Survey of Income and Program Participation are used, before-tax
cash income over the 4-month reference period is compared to a
poverty threshold for the same 4 months. When data from the Con-
sumer Expenditure Survey are used, quarterly total expenditure data
are annualized and compared to the appropriate yearly poverty
threshold.

Some of the surveys do not collect actual income amounts, but
only information about whether the income falls in a particular
dollar range. These data do not lend themselves to analyses using
an exact poverty line, In the National Crime Victimization Survey,
a household is considered under the poverty threshold if it has:

Table B

Poverty rates for persons by survey

Single- | Fami
parent
fomities

All
Survey familles

recetving
wettare | oge 18

Rates for all persons:
‘American Housing Survey ..
Consumer Expenditure

Survey...

16.0 46.1 73.0 -

13.8 38.3 | 64.0 -

Current Population Survey 14.0 48.3 77.0 -
National Crime Victimization
Survey .... 18.6 46.7 _ -

Survey of Income and
Program Participation

National Health interview .
Survey...

Rates for persons in selected
subpopulations:
National Health Interview
Survey .. se | - - 20.0

National Household
Education Survey:

School Readiness
Component (rates for
children from prekinder-
garten age to under
8 years) | 284 sag | — -

School

Discipline Component
(rates for chidren in

13.0 45.5 | 82.0 -

13.0 - - -

grades 3 to 12). 214 337 | — -
National Matemal and Infant

Health Survey (rates for

mothers who gave birth

in 1988 ... 24.9 651 | 742 | —

Nore: _All data are person-weighted.



teristics as individuals identified as income-poor in other sec-
tions of this article.” Poverty rates, measured using expen-
diture data, are generally lower than in the other surveys,
although trends across family types are similar.

Differences between the poor and the nonpoor in aver-
age family expenditures are smaller than differences in
average family incomes. (See table 2.) While average fam-
ily incomes of the non-income-poor are over 6 times as
large as those for the income-poor ($55,394 versus $8,501),
average family expenditures of the non-expenditure-poor
are only about 3 times as large as those for the expenditure-
poor ($36,926 versus $11,596). For the single-parent poor
and those in families receiving welfare, average family
expenditures are $9,172 and $16,280.23

According to the data presented in tables 1 and 2, total fam-
ily expenditures exceed total before-tax family income for all
but the nonpoor. Transfer benefits, such as food stamps, are
not reflected in the income figures, nor are taxes paid by fami-
lies. When these are accounted for in income, the spending
power of poor families increases. For example, if the value of
food stamps and the Earned Income Tax Credit are added to
before-tax income, and taxes paid are subtracted, the ratio of
expenditures to income becomes smaller, falling from 1.36 to
1.16 for poor families, from 1.35 to 1.04 for single-parent
poor families, and from 1.28 to 1.13 for welfare families. The
fact that expenditures still exceed income is likely related to
how expenditures are defined (appendix A), possible under-
reporting of income compared to expenditures, differences in
the types of families that are considered poor on the basis of
income versus expenditures, and differences in income and
expenditure distributions.

Expenditures by farnilies In 1992-93
Single- | Families
Nonpoor | Poor
Expendiures | familes | famities | Parent poor | receiving
Consumer
Expenditure
Interview Survey |
Total family
expenditures ......., $36,926 | $11,596 $9,172 $16,280
Percent of
18.8 298 343 255
186 223 255 24.0
69 140 137 10.8
49 54 67 60
Transportation 20.1 103 64 133
Health care 54 28 12 22
Entertainment .. 54 28 28 39
Personal
insurance and
pensions ..... 10.9 84 24 48
Note: Family-level data, person-weighted. Quartierty data collected from
January 1992 to December 1993, with reference period from October 1991
to November 1993, Results are presented for expenditure nonpoor and
oor families.

The composition of spending also varies by family type.
Not surprisingly, a greater share of poor people’s total expen-
ditures is allocated to purchasing items frequently considered
necessities: food, shelter, utilities, and apparel. Seventy-one
percent of poor persons’ family expenditures are spent on
these necessities, compared to 46 percent for the nonpoor.
For those in expenditure-poor, single-parent families, an even
larger share of total family expenditures, 80 percent, is spent
on necessities. Spending a larger share of total expenditures
on necessities leaves a smaller portion for other items such as
transportation, health care, personal insurance and pensions,
and entertainment (including admissions to events, television,
toys, and pets).

Housing. Rates of homeownership vary dramatically across
both income levels and family types. (See table 3.) Seventy-
eight percent of the nonpoor live in homes that their families
own, compared with only 41 percent of the poor. For those in
poor, single-parent families and those in families receiving
welfare, the homeownership rate is even lower, 24 percent.
Thus, the nonpoor are 3 times more likely to live in homes
they own than are those in poor, single-parent families.

The main reason for the difference in ownership rates be-
tween all individuals in poor families and individuals in poor,
single-parent families is the high rate of ownership among in-
dividuals in poor, elderly families, 63 percent of whom live in
homes they own (results not shown). In addition, 51 percent
of people in poor two-parent families live in homes they own.

The poor are at greater risk of being evicted from their
home or apartment, with eviction rates 5 times as high as those
of the nonpoor. While only 0.4 percent of the nonpoor were
evicted in the previous 12 months, 2.1 percent of the poor,
2.4 percent of the single-parent poor, and 2.6 percent of those
in welfare-recipient families lost their homes. Twenty-six per-
cent of the poor and 29 percent of those receiving welfare
were in families that did not pay the full rent or mortgage at
some point in the survey year. The rate for the nonpoor was
much lower, only 7.5 percent.

Those in poor and nonpoor families differ according to the
characteristics and condition of their housing as well. For
example, poor individuals are more than twice as likely to
live in crowded housing; 19 percent of those in poor families
live in housing with more than one person per room, com-
pared to only 4 percent of the nonpoor. Similarly, those in
poor families are about twice as likely to live in housing with
upkeep problems as are the nonpoor. Eleven percent of the
poor have housing with moderate upkeep problems and 4
percent have severe upkeep problems. Among persons living
in nonpoor families, 4 percent have housing with moderate
problems and 2 percent have severe problems,”5

Consumer durables and utilities. Fort some major consumer

Monthly Labor Review May 1996 7



Poor in America

GREET veces deprivation in 1992
Number

Single- | Families
ot Nonpoor! Poor | parent poor|receiving
deprivations’ families |famies| families | wettore
87.0 44.9 43.2 346
130 =| 58.4 56.8 65.4
32 | 269 29.8 33.6
1.0 118 129 148
3 40 45 49
a 14 oh 17
r) a 1 1
0 0 0 t)
19 99 1.06 1.21
‘Deprivation = Evicted in past year,
Uiilties disconnected in past year;
‘Telephone disconnected in past year,
Housing with upkeep problems;
Not enough food in past 4 months;
Crowded housing (more than 1 person per room);
No retrigerator;
No stove;
No telephone.
Nore: Family-level data, person-weighted. Survey of Income and Pro-
gram Participation data collection and reference periods are September
through December 1992.

more times before their fifth birthday, compared to 20 per-
cent of nonpoor children. The pattern is similar for older chil-
dren as well.

Overall deprivation. The previous discussion provides in-
formation on the distribution of various assets, consumption
commodities, and income. However, correlations across mea-
sures are not apparent. Families with limited resources may
choose different allocations of commodities in order to make
ends meet. Examining one dimension of living conditions at
a time probably understates the extent to which families
forego important other elements of material well-being.

To address this issue, an index of deprivation was created
using data from the Survey of Income and Program Participa-
tion. (See table 8.) Deprivations were defined on nine family
characteristics: evicted in the past year, gas or electricity
turned off in the past year, phone disconnected in the past year,
did not have enough food in the past 4 months, lives in crowded
housing (more than one person per room), lives in housing
with moderate or severe upkeep problems,;? lives without a
refrigerator, lives without a stove, and lives without a tele-

12 Monthly Labor Review May 1996

phone. For each individual, the number of deprivations re-
ported is the total number of these characteristics reported by
the individual's family. The number of deprivations is between
Q and 9 for each individual, Each of these hardships was cho-
sen because it is relatively rare in the overall U.S. population
and represents an element of material well-being important in
day-to-day life in this country that has been forgone.**

The majority of the poor live with at least one of these
deprivations: 55 percent of the poor, compared with 13 per-
cent of the nonpoor. Similarly, 27 percent of the poor face
two or more deprivations, compared with only 3 percent of
the nonpoor. Fifty-seven percent of those in poor, single-par-
ent families suffer at least one deprivation and 30 percent live
with two or more; 65 percent of those in families receiving
welfare suffer at least one deprivation and 34 percent live with
two or more. Overall, the average number of deprivations for
the poor, the poor in single-parent families, and those in fami-
lies receiving welfare is 5 to 6 times higher than for the
nonpoor.

Some caveats

There are several factors that may lead to over- or underesti-
mates of the differences in living conditions between the poor
and nonpoor. For example, the measures presented here may
overstate the actual deprivation of the poor because differ-
ences in possessions may reflect differences in preferences
rather than differences in resources. These data do not permit
‘one to distinguish, for each difference in living conditions
identified here, the relative importance of choice versus lim-
ited resources. Moreover, an individual’s lack of interest in
Taterial goods would be reflected in lower expenditures and
fewer possessions. This lack of interest might also translate
into lower income.

The use of short-term measures of poverty, such as those
employed in this study, probably understates the relationship
between persistent poverty and various outcomes. Roughly
half of those who are poor in one year will remain poor for
some years to come. Some past studies have found that
differences are more pronounced for the persistently poor than
for those who are poor in only one year. For example, pov-
erty is associated with deficits in children’s cognitive devel-
opment; the correlation is roughly twice as great for children
who are in poor families 3 years in a row as for those poor
a single year.* Jane E. Miller and Sanders Korenman find
that differentials in children having low height for their age
(stunting) and low weight for their height (wasting) also are
greater for those living in long-term rather than short-term
poverty.

An understatement of the difference between poor fami-
lies and the general population is likely to result because,
in accordance with standard procedure, negative and zero


Crime and neighborhood. Individuals who live in poor house-
holds,” especially those in poor, single-parent households, are
much more likely to be victims of crime than are those who
live in other households. (See table 5.) Those living in poor
households are twice as likely as the nonpoor to be victims of
violent crimes (rape, assault, and robbery); those in poor,
single-parent households are more than 3 times as likely.
The difference in the incidence of personal theft between
the poor and the nonpoor is not statistically significant, but
those in poor, single-parent households again suffer crimes at
a higher rate. Rates of theft for the nonpoor are 60 per 1,000
people per year, compared to 66 for the poor and 85 for those
in poor, single-parent households. The rates of incidence for
household crimes (burglary, household theft, or motor vehicle
theft) are high for both the poor and the poor in single-parent
families. Poot households are almost one and a half times as
likely and poor, single-parent households are more than twice
as likely as nonpoor households to suffer these crimes.
Consistent with the statistics on crime victimization, the
poor are less likely to report living in safe neighborhoods.
Ninety-three percent of the nonpoor live in families whose
family head reports that the neighborhood is safe from crime,
compared to only 78 percent of the poor, 72 percent of those
in poor, single-parent families, and 67 percent of those in
families receiving welfare. Similarly, the poor are more likely
to live in families whose head reports being afraid to go
outTM: this was the case for only 9 percent of the nonpoor,
compared with 19.5 percent of the poor, 21 percent of those

in poor, single-parent families, and 25 percent of those in
families receiving welfare.

Overall, the poor are more likely to express dissatisfaction
with the communities in which they live: 18 percent of the
poor and 25 percent of those in poor, single-parent families
are in households that report that their neighborhood is bad
enough that they would like to move, compared with only 7
percent of the nonpoor. Similarly, 15 percent of the poor and
20 percent of persons in poor, single-parent families are in
families that report that community services in their neigh-
borhoods are bad enough that they would like to move, com-
pared with only 6 percent of the nonpoor.

Given that these measures of safety and neighborhood qual-
ity are subjective, it is plausible that differences would be
greater if measured on an absolute scale, because people tend
to adjust their expectations according to their experiences.”

Health and nutrition. Poor mothers are much more likely than
are nonpoor mothers to experience problems in birth and
pregnancy. (See table 6.) The number of infant deaths within the
first year is higher: 13.5 per 1,000 live births for poor mothers
and 14.6 for poor, single mothers, compared to 8.3 for nonpoor
mothers. Similarly, the percentage of live births with low weight
and the rate of preterm births is about twice as high for poor and
for single, poor mothers as for nonpoor mothers.”

Poor and nonpoor mothers also differ in quality of prenatal
care. The Centers for Disease Control defines inadequate pre-
natal care as lack of prenatal doctor visits in the first trimester,

a strong predictor of birth outcomes.

Characteristics of crime and neighborhood conditions in 1992 Forty-three percent of poor mothers

and 49 percent of poor, single mothers

ingle reported no prenatal doctor visits in the

Char Nonpoor tornes parent poor receiving first trimester, compared with only 16

fomilie families welfare percent of nonpoor mothers.

—}—- Poor children are more likely to

National Crime ition have had a disability or health impair-

crimes, par 1 om ment lasting more than 6 months:

Violent crimes, per 1,000 people 26.18 53.68 8750 24 percent of poor children (aged 3

59.69 66.01 84.68 through 7) suffered such problems,

143.29 207.10 317.59 compared to 18 percent of nonpoor

s ott a children. Similarly, 25 percent of poor

Progeam Participation children in single-parent families have

(percent of persons) had a disability,

Neighborhoods safe from crime $3.0 78. 1 72.4 67.4 Poor children also are less likely to

ao ak’ 1 90 ou ‘condition bad enough 2 9. 207 246 have a particular clinic, health center,

that one Would like 10 MOVE sn 65 184 24.5 27.5 or doctor’s office that they usually visit

Community aagvices ad enough at 55 184 197 208 when sick, and are more likely to use an

Note: For the National Crime Victimization Interview Survey, results are presented for households or | “TMeTeNCY room as their usual clinic, if

persons vig housek, rather than for familie. Famiy. ‘and Fousshok ove data are person-weighted, they have one. Twenty-three percent of
rs data from ional Crime Victimization Interview Survey. Person-level data are presented for A

crimes and thefts. National Crime Victimization Interview Suwvey dala wore collected between Poor children usually ust an emergency

1992 and June 1993, with 1992 as the reference period, Survey of income and Program Participation data room or have no usual clinic when sick,

colfection and reference periods are September through December 1992. compared to only 8 percent of nonpoor

Monthly Labor Review May 1996 9

~~


Poor in America

Housing characteristics in 1992 and 1993

{Percent of persons}
Fomiles
Nonpoor Poor Single-
Housing characterstic tories Parent poor | receiving
families fornilies welfare
78 408 243 249
42 192 16.7 238
33 13 125 19
17 38 44 43
Conditions in home un
enough that one would like to move . 95 28.6 93.5 348
In the past 12 months, there was a
time when the household:
Did not pay the full amount of the
. 75 259 28.0 28.1
4 24 24 26

Period.

Nore: Family-level data, person-weighted. American Housing Survey data were collected from July
through December 1993, with 1993 as the reference period. Survey of Income and Program Participation
data were collected from September through December of 1992, with these same months as the reference

Table 4. Durable items and utilities 1992 and 1993

{Percent of persons}
Single- Fomilies
Nonpoor Poor
Durable or utility tem lies fomilies Parent poor wa
Survey of Income and
Program Participation
items currently in the home or building
that are in working condi
Washing machine 92.7 nT 675 66.3
87.3 60.2 43.9 44.8
99.5 97.9 98.1 98.2
98.5 92.8 92.1 92.2
99.5 97.7 97.3 98.0
19 496 46.0 40.7
97.2 76.7 69.9 67.5
In the past 12 months, there was a
time when the household:
Did not pay the full amount of the
gas, oil, or electricity bill. 98 92.4 37.0 40.7
Had service tumed off by
electric, or oil company 18 85 10.1 10.5
Had telephone service di
because payment was not made .. 32 16.0 18.0 20.3
American Housing Survey
Car or truck owner. 972 76.8 64.1 65.3

Nore: Family-level data, person-weighted. Survey of Income and Program Participation data collection
and reference periods are September through December 1992. American Housing Survey data were
collected between July and December 1993, with 1998 as the reference period.

8 Monthly Labor Review May 1996

durables, the poor and nonpoor differ
little in access. (See table 4.) Almost
all of the poor, like the nonpoor, have
access to refrigerators and stoves:
98 percent versus 99.5 percent. Also,
92 percent of people in poor and in
single-parent poor families and 98
percent of people living in non-
poor families have access to a color
television.”

For several other consumer dura-
bles, the poor have considerably lower
rates of access, although for most of
the items measured, their access rates
are still above 50 percent. For ex-
ample, 77 percent of the poor and 70
percent of the single-parent poor have
access to a telephone, compared with
97 percent of the nonpoor. Similarly,
72 percent of the nonpoor live in fami-
lies that have air conditioning (central
or room), while 50 percent of those in
poor families and 46 percent of those
in poor, single-parent families do.
People in poor families also are con-
siderably less likely to have access to
washing machines and apparel dryers.
(Because the Survey of Income and
Program Participation asks whether
the family has these items in either the
home or the building, actual owner-
ship rates of some items are likely
lower.) About 77 percent of the poor
and 64 percent of those in poor, single-
parent families have a household car
or truck available, compared to 97 per-
cent of the nonpoor.

Finally, the poor are more likely to
have problems paying utility bills and
to have services cut off. The poor and
the single-parent poor are more than 3
times as likely as the nonpoor to have
not paid their utility bill at some time
during a 12-month period. The poor
are more than 4 times as likely to have
their utilities cut off, while the single-
parent poor are more than 5 times as
likely. Finally, the poor are 5 times as
likely as the nonpoor to have their tele-
phone service disconnected because
payments were not made, while the
single-parent poor are 6 times as likely.



USIACRAE Educational characteristics of persons in 1992-93

[lo percent of persons)

School

Nonpoor Poor Single-porent
Characteristic forviles fornes fomies
Current Population Survey—Education Supplement
Percent of children under age 15:
Children (in school) who use a computer at schoo! 63.3 54.8 51.9
Children who use @ computer at home ... 23.0 32 25
National Household Education Survey
‘and Discipline
Percent of students grades 3 to 12:
Student has repeated a grade since starting school ..... 15.4 313 316
Student has been expelled from school (at some point) .. 1.0 34 35
Percent of students grades 6 to 12:
Student thinks he/she will attend schoo! after high school 96.1 90.1 90.2
Student thinks he/she will graduate from a 4-year college. 89.7 82.7 82.3
School has security guards 28.8 43.3 462
‘School has metal detectors ay 11.5 128
‘Schoo! Readiness Component
Percent of prekindegarten children:
Child not enrolled in preschool or Head Start... 58 86 7A
Child enrolled in public (not private) preschoo/Head Start program 31.0 75.5 78.2
Child attends Head Start program... 1.41 48.2 545
Child attends a preschool program (other than Head Start) 86.2 52.9 49.3
Percent of children aged § to 7:
Child has fewer than 10 books ... 5.4 27.2 28.5
Child watches more than 3 hours of television per day 32.9 49.4 52.3
Child watches more than 4 hours of television per day 15.1 29.2 20.8
Child moved three or more times between birth and Sth birthday 19.5, 28.0 279
High School and Beyond Survey
Percent of persons in 1980 sophomore cohort who:
Attended either a 2- or a 4-year collage .... 696 48.3 476
Completed requirements for a bachelor's degree 92.6 16.9 13.2

Nore: Data are for individuals. Current Population Survey—Education
‘Supplement data collection and reference periods are October 1999. Na-
tional Household Education Survey data were collected from January through
‘April 1993; the reference period is the period since the beginning of the 1992~

93 school year or the current period. High School and Beyond Survey data
were collected in 1992 and earty 1993, with reference periods of tall of 1980
through spring of 1992 for edcuation questions and 1991 for total household
income before taxes.

poor students are considerably more likely to attend schools
with security guards and metal detectors.

Both poor and nonpoor students have high expectations
that they will attend and graduate from college. Ninety per-
cent of poor students expect to attend school after high school
and 83 percent anticipate graduating. Ninety-six percent of
nonpoor students expect to continue their education, and 90
percent expect to graduate college. On the other hand, actual
attendance and graduation rates exhibit differences. Forty-
eight percent of poor students and 70 percent of nonpoor stu-
dents attend either a 2- or 4-year college; 17 percent of poor
students and 33 percent of nonpoor students complete a
bachelor’s degree.*!

Home computer use by children (aged 14 and younger)
varies dramatically by income, although it was not prevelant
for either the poor or the nonpoor. Twenty-three percent of
children in nonpoor families use a computer at home, com-
pared with only 3 percent of children in poor families and 2.5
percent of children in poor, single-parent famities. Children

have more equitable use of computers at school: 63 percent
of nonpoor students compared with 55 percent of poor stu-
dents and 52 percent of students in poor, single-parent fami-
lies use a computer at school.

Most poor and nonpoor prekindergarten children are en-
rolled in a nursery or preschool program; only 9 percent of
poor and 6 percent of nonpoor children did not attend such a
program. The poor are much more likely to attend a Head
Start program or other public preschool.

Young children (aged 5 to 7) in poor families watch more
television than do those in nonpoor households and have
fewer books. Almost one-third of them watch more than 4
hours of television per day, compared to only 15 percent of
nonpoor children, Twenty-seven percent of poor children and
29 percent of poor children in single-parent families have
fewer than 10 books, compared to only 5 percent of nonpoor
children.

Finally, poor children change residence more often.
Twenty-eight percent of poor children aged 5 to 7 move 3 or

Monthly Labor Review May 1996 11



Maya Federman,
Thesia |. Garner,
Kathleen Short

W Borman Cutter IV,
John Kiely,

David Levine.
Duane McGough,
and

Marilyn McMillen

Authors’ afflliations are
on page 13. The
interpretations
Presented in this article
are the authors’ own,
and do not represent
those of agencies with
which they are, or
have been, affillated.

Poor in America

What does it mean

to be poor in America?

An examination of a variety of measures

of material well-being shows those

individuals

living in poor families, in single-parent families,

and in families receiving welfare
to be significantly worse off

than those living in nonpoor families

poverty and living conditions, a multifac-

eted understanding of what it means to be
poor is required. In one sense, the answer to the
question “What does it mean to be poor?” is
straightforward—having cash income below the
official poverty line for a given family size. In a
broader sense, the living conditions of the poor
are difficult to measure, both because annual
cash income is only one factor related to living
conditions, and because the poor are quite het-
erogeneous,

‘This article represents an effort to get closer to
the answer by summarizing findings from nine na-
tional surveys that shed light on the living condi-
tions of individuals living in poor and nonpoor
families. It differs from earlier examinations of liv-
ing conditions and the material well-being of
American families in that it draws upon a broader
set of household surveys and attempts to maximize
uniformity in the definition of family types and
poverty. This work represents a coordinated effort
of representatives of various Federal agencies that
produce and analyze data from nationally repre-
sentative surveys.' The aim in this process has been
to produce measurements of material well-being
for an expanded set of dimensions, following a
methodology that would promote comparability
across surveys as much as possible.

Te understand the relationship between

Related research?

Although the official poverty measure in the
United States is defined in terms of current be-
fore-tax cash income, some aspects of economic
welfare can be more accurately gauged by mea-
suring consumption or other dimensions of liv-
ing conditions. Income measures ignore home-
ownership and other assets that can be impor-
tant sources of consumption. Thus, some people,
such as those who are retired or those whose in-
comes are only temporarily low, may be classi-
fied as poor based on income but do not have
low consumption. Furthermore, the official pov-
erty rate does not account for taxes or in-kind
transfers such as food stamps or government-
provided medical insurance, which improve liv-
ing conditions without affecting a family's offi-
cial poverty status.*

To address some of the limitations of basing
the measure of poverty solely on cash income,
David M. Cutler and Lawrence F. Katz compare
poverty rates constructed using consumption ex-
penditure data from the Consumer Expenditure
Survey with the official poverty rates based on
income from the Current Population Survey.*
They find that, while the poverty rate is lower
when measured using expenditures, trends in
poverty rates based on both income and expen-

Monthly Labor Review May 1996 3



Poor in America

Garcia Coll, “Children and Poverty: Issues in Contemporary Research,” Child
Development (Special Issue: “Children and Poverty”), vol. 65, no. 2, 1994,
pp. 275-82; Paul A. Jargowsky, “Beyond the Street Comer: The Hidden
Diversity of Ghetto Neighborhoods,” mimeo. (University of Texas at Dal-
las, 1995); Christopher Jencks and Kathryn Edin, “Do poor women have a
right to bear children?” The American Prospect, Winter 1995, pp. 43-52;
‘Susan Mayer and Christopher Jencks, “Recent Trends in Economic Inequal-
ity in the United States: Income versus Expenditure versus Material Well-
being,” in Dimitri B. Papadimitriou and Edward N. Wolff, eds., Poverty and
prosperity in the USA in the late twentieth century (New York, St. Martin's
Press, 1993); C-T. Ramey, D.M. Bryant, B.H. Wasik, JJ. Sparling, KH. Fendt,
and L.M. LaVange, “The Infant Health and Development Program for low
birth weight premature infants: Program elements, family participation,
and child intelligence,” Pediatrics, March 1992, pp. 454-56; Martina Shea,
“Dynamics of Economic Well-Being: Poverty, 1990-1992,” Current Popu-
lation Reports Series P70-42 (Bureau of the Census, 1995); Peter Townsend,
Poverty in the United Kingdom: A Survey of Household Resources and Stan-
dards of Living (Harmondsworth, England, Penguin Books, 1979); and Pe-
ter Townsend, The Internation Analysis of Poverty (Hemel Hempstead, En-
gland, Harvester-Wheatsheaf, 1992).

>The National Academy of Sciences Poverty Panel recently released a
report recommending several changes to the official poverty measure, in-
cluding adjusting for taxes and transfers. See Constance F, Citro and Robert
T. Michael, eds., Meauring Poverty: A New Approach (Washington, Na-
tional Academy Press, 1995).

* David M. Cutler and Lawrence F. Katz,“Rising Inequality: Changes in
the Distribution of Income and Consumption in the 1980's,” American Eco-
nomic Review, May 1992, pp. 546-51.

> Daniel T. Slesnick, “Gaining Ground: Poverty in the Postwar United
States,” Journal of Political Economy, February 1993, pp. 1-38.

* Robert Rector, “How the Poor Really Live: Lessons for Welfare Re-
form,” Heritage Foundation Backgrounder No. 875 (The Heritage Founda-
tion, Jan, 31, 1992).

7 Arloc Sherman, Wasting America's Future: The Children's Defense Fund
Report on the Costs of Child Poverty (Boston, Beacon Press, 1994).

* Susan Mayer and Christopher Jencks, “Has Poverty Really Increased
Among Children Since 19707 Working Paper 94-14 (Northwestem Uni-
versity, Center for Urban Affairs and Policy Reaseach, 1995).

9 William D. Passero, “Spending Behavior of Families Receiving Wel-
fare or Public Assistance, 1992-94,” Paper presented at the 42nd Annual
Conference of the American Counci} on Consumer Interests, Nashville, TTM,
March 27-30, 1996. This paper is available from its author at the Bureau of
Labor Statistics, Washington, Dc.

'® Welfare is defined as including Aid to Families with Dependent Chil-
dren, general assistance, emergency assistance, Cuban Refugee Assistance,
Indian Assistance, Alaska Longevity Pay, and job training grants, such as
Job Corps.

"To be considered working, the member had to be over 15 years of age
and employed full time or part time; whether the member was paid for work-
ing was not relevant for Passero’s definition. His analysis is limited to con-
sumer units with a reference person under the age of 65 years,

Mark Lino, “Income and Spending of Poor Households with Children,”
Family Economics and Nutrition Review, vol 9, no. 1, 1996.

8 About 9 percent of all households with children were classified as poor
using this definition, compared to the 16 to 18 percent of families with chil-
dren classified as poor by the Census Bureau for the same period.

TM Thresholds are adjusted for age, family size, and number of children.
(Poverty rates are published annually in U.S. Department of Commerce, Pov-
erty in the United States, Series P-60-185.)

'S For each survey, appendix B lists poverty rates for individuals and
descriptions of the calculation of poverty status.

* Person-weights are available in the Survey of Income and Program
Participation. For the American Health Survey, the Consumer Expenditure
Survey, and the Current Population Survey, person-weights were developed
using the population household or consumer-unit weight, multiplied by the
number persons in the family.

14 Monthly Labor Review May 1996

"” See tables C-1 and C-2 in appendix C.

" The Consumer Expenditure Survey, the Current Population Sur-
vey, and the Survey of Income and Program Participation include only
families in which the child is related to the household head by birth or legal
arrangement.

» The family had to have at least one child under age 18.

® For this study, welfare for the Consumer Expenditure Survey is de-
fined to include Aid to Families with Dependent Children, general assis-
tance, emergency assistance, Cuban Refugee Assistance, Indian Assistance,
Alaska Longevity Pay, job training grants such as Job Corps, and supple-
mental security income; the American Health Survey defines welfare as in-
cluding Aid to Families with Dependent Children, general assistance, and
supplemental security income; the Current Population Survey includes Aid
to Families with Dependent Children and public assistance; and the National
Maternal and Infant Health Survey and the Survey of Income and Program
Participation includes only Aid to Families with Dependent Children. A com-
parable measure of welfare assistance is not available in the other surveys

For those individuals who both are poor and receive welfare, family
income is $7,769, of which 56.0 percent comes from public assistance and
welfare (based on person-weighted results).

% Gamer, Johnson, and Kokoski found that 52 percent of the income-
poor (based on before-tax income) had total consumer unit expenditures less
than the poverty line, while 61 percent of expenditure-poor consumer units
had incomes below the thresholds. ‘Their results are based on Consumer
Expenditure Survey data from 1982-84. (See Thesia I. Gamer, David S.
Johnson, and Mary F. Kokoski, “Experimental Consumer Price Index for the
Poor” (ats Working Paper, Bureau of Labor Statistics, 1996]. This paper is
available from the authors at the Bureau of Labor Statistics.) Rogers and
Gray found similar results when they examined quintiles of income and ex-
penditure outlays. (See John Rogers and Maureen Gray, “ce data: quintiles
of income versus quintiles of outlays,” Monthly Labor Review, December
1994, pp. 32-37.)

> ft is important to point out that these are arithmetic means, and not
medians or modes. If the distribution of income is positively skewed, and
that of expenditures is negatively skewed, higher mean expenditures would
result, Skewness is not examined for in this study, however.

TM Family expenditures for those individuals who both are poor and re-
ceive welfare are $11,012, and the share spent on necessities is 78.6 percent
(based on person-weighted results).

% The U.S. Department of Housing and Urban Development defines mod-
erate (severe) upkeep problems as the presence of 3 (5) or more of the fol-
lowing 6 problems: broken plaster or peeling paint, rats or mice, cracks in
the wall, pipes or plumbing leaks, dents or holes in the floor, and roof, win-
dow, or basement leaks.

% Mayer and Jencks note that color televisions are a low-cost form of
entertainment for poor families. See Susan Mayer and Christopher Jencks,
“Has Poverty Really Increased.

7 The National Crime Victimization Survey did not have measures for
families available; thus, crime results are presented for individuals in poor
and nonpoor households.

2 "The respondent reports that, in the past month, there were times when
the he or she wanted to go somewhere but stayed home instead because he or
she thought it would be unsafe to leave home.

® R. Janoff-Bulman, “Lottery Winners and Accident Victims: Is Happi-
ness Relative?” Journal of Personality and Social Psychology, vol. 36, no.
8, pp. 917-27; and Robert H. Frank, “Frames of Reference and the Quality
of Life,” American Economic Review, May 1989, pp. 80-85.

* The income differentials in birth outcomes hold across age groups.

> Students who drop out of school before their sophomore year of high
school are not included in the sample. Differences may be slighily greater if
they are included.

» For the Survey of Income and Program Participation, residences with
moderate upkeep problems are defined as having three or four of the
following: leaking roof or ceiling; toilet, hot water heater, plumbing not



income and expenditure values were considered to be valid
responses and were included in the calculation for the be-
low-poverty populations. Negative incomes often are due to
business losses or capital losses, and thus are a poor indicator
that a family is poor. Calculations from the American Hous-
ing Survey suggest that excluding families that report nega-
tive or zero annual incomes from the poverty population in-
creases the gap between the poor and the nonpoor for most
variables. For example, homeownership among persons in
poor families falls from 41 percent to 36 percent when such
persons are excluded. Persons in families with negative or
zero income have relatively high homeownership rates, 64
percent.

The difference in living conditions also may be under-
stated due to a lack of adjustment for quality. If, for example,
the durables owned by the poor were older or of lower qual-
ity, the differences between poor and nonpoor families would
be understated.

Finally, certain populations, such as the homeless or per-
sons who are institutionalized, are rarely included in the
sample design of Federal household surveys such as these. It
is likely that the most severe deprivation is concentrated
among some of these unrepresented groups. If so, the re-
sults presented here understate the differences between
the poor and the nonpoor. To more accurately identify
the poor, changes in sample design and survey instruments
need to be developed to specifically get at these vulnerable
populations.

‘THE RESULTS PRESENTED IN THIS ARTICLE paint a broad picture of
the living conditions of individuals in American families
across a variety of measures of well-being, and allow com-
parisons across family types and income levels. Clear differ-

Footnotes

ences between the poor and nonpoor are evident. However,
the analysis makes it clear that generalizations across the en-
tire poverty population can be misleading. For example, home-
ownership rates for people in poor, single-parent families and
for people in families receiving welfare are only three-fifths
the rate for those in all poor families.

It is also important to note that the findings do not neces-
sarily reflect a causal relationship between income and living
conditions. By definition, raising a family's income will end
its poverty. At the same time, higher income may not remove
the differences in the living conditions or deprivations that
have been identified. For example, if low parental education
is highly related to both low income and a low probability
that a child will attend college, then raising family income
will not necessarily lead to an increase in the likelihood that
the child will attend college. Determining the causality of
these relationships is a subject for further study.

The current study can be extended along a number of di-
mensions. While data from a large number of surveys are
analyzed here, many important aspects of living conditions
remain unmeasured. For example, measures of assets, access
to credit, employment patterns, homelessness, environmen-
tal hazards, accumulation of “cultural capital” such as con-
nections to social networks, and more objective characteris-
tics of neighborhoods could be included in future research.
Further separating the family categories along other dimen-
sions such as length of poverty spells, income to poverty
threshold ratios, race, ethnicity, and geographic region would
be useful. Similarly, different resource measures than before-
tax cash income or expenditures and different thresholds than
the official poverty threshold could be used. For greater
progress to be made towards understanding the poor, these
and other dimensions also need to be examined. o

AUTHORS’ IDENTIFICATION: Maya Federman is a doctoral candidate in
the Department of Economics, Harvard University; at the time this study
‘was prepared, she was serving with the Council of Economic Advisors. Thesia
1, Garner is a senior research economist with the Bureau of Labor Statistics.
Kathleen Short is Chief of the Poverty and Health Statistics Branch, U.S.
Bureau of the Census. W Boman Cutter IV, formerly a research assistant
with the U.S. Department of the Treasury, is currently serving with the Peace
Corps. John Kiely is Director of Housing and Demographic Analysis, with
the National Center for Health Statistics. David Levine is an associate pro-
fessor in the Haas School of Business, The University of California at Ber-
keley; at the time this study was prepared, he was serving with the Council
of Economic Advisors. Duane McGough is Chief of the Infant and Child
Health Studies Branch, U.S. Department of Housing and Urban Develop-
ment. Marilyn McMillen is a senior statistician at the National Center for
Education Statistics.

ACKNOWLEDGEMENTS: Comments, statistical assistance, and direction
from Richard Bavier and John Greenlees were integral to the project. Addi-
tional comments and statistical assistance were provided by Stacy Bondanella,
Pau} Burke, Kathryn Chandler, Aurora D'Amico, Barbara Hawkins, Tom
Kane, Chuck Nelson, Joanne Pascale, Bill Passero, Phil Rones, Anna Sand-
ers, Kathryn Silbersiepe, Beth Schlaline, Martina Shea, Stephanie Shipp.

‘Toby Stickler, Wolf Weber, and Barbara Wootton.

This article is drawn from a larger report containing results for addi-
tional variables and family types. The complete tables are available in Maya
Federman and others, “Living Conditions of Individuals Living in Poor and
Non-Poor Families,” Institute of Industrial Relations Working Paper No.
64 (The University of California at Berkeley, May 1996).

? The following works, although not referenced separately, also provided
background for the present study: Robert Cage, Thesia I. Gamer, Richard
Miller, William Passero, and Elizabeth Reise, “Data Comparability Across
Federal Household Surveys,” Working Document (Bureau of Labor Statis-
tics, 1992); David M. Cutler and Lawrence F. Katz, “Macroeconomic Per-
formance and the Disadvantaged,” Brookings Papers on Economic Activity,
no, 2 (Washington, The Brookings Institution, 1991); Klaas de Vos and Thesia
1. Gamer, “An Evaluation of Subjective Poverty Definitions: Comparing
Results from the U.S. and the Netherlands,” Review of Income and Wealth
Series 37, no. 3, September 1991; Hiram B. Fitzgerald, Barry M. Lester, and
Barry Zuckerman, eds., Children of Poverty: Research, Health Care, and
Policy Issues (New York, Garland, 1995); Aletha C. Huston, ed., Children
in Poverty: Child Development and Public Policy (New York, Cambridge
University Press, 1991); Aletha C. Huston, Vonnie McLoyd, and Cynthia

Monthly Labor Review May 1996 13



Poor in America

children. Poor and nonpoor children do not differ as to whether
they have a usual place to which they go for routine care.

Poor and nonpoor children under age 18 do not differ sig-
nificantly in terms of whether they had visited a doctor in the
past year, perhaps because medicaid is available to poor cl
dren. However, poor children are less likely to see a dentist
regularly. Sixty-two percent of nonpoor children have seen a
dentist within the last year, compared with only 41 percent of
the poor,

Differences also exist in the presence and source of health
insurance coverage. Thirteen percent of those in nonpoor
families, compared with 29 percent of those in poor families,
are not covered by health insurance at any time during the year.
Those in poor, single-parent families actually have a lower rate,
19 percent, than do all poor families. The higher coverage of the
single-parent poor most likely results from their access to medi-
caid. The poor are less likely to be covered by private health in-
surance and are more likely to be covered by medicaid for all or
part of the year. Only 24 percent of the poor (17 percent of those

in poor, single-parent families) have private health insurance,
while 46 percent are covered by medicaid (68 percent of the
single-parent poor). In contrast, 78 percent of the nonpoor have
private health insurance and only 6 percent are covered by
medicaid.

Finally, the poor are more likely to live in families that
report sometimes or often not having enough food to eat.
Ninety-nine percent of the nonpoor live in families where
the head reports having enough food to eat, compared to 89
percent of persons in poor families and 87 percent of per-
sons in poor, single-parent families.

Education. Poor students are more likely to have repeated
a grade and to have been expelled from school. (See table 7.)
Thirty-one percent of poor youth (grades 3 through 12) are
reported by their parents to have repeated a grade, which is
twice the rate for nonpoor students, 15 percent. Poor students
are more than 3 times as likely as are nonpoor students to be
expelled from school, 3.4 percent versus 1.0 percent. Also,

Health characteristics of persons in 1988, 1992, and 1993

Single- Families
Nonpoor Poor
Characteristic Parent poor receiving
fomllies families families welfare
National Maternal and Infant Health Survey
Number per 1,000 live births
Infant deaths in first yea a3 13.5 148 143
Percent of live births:
Low birth weight (less than 2,500 grams) .. 55 10.2 128 16
Preterm (gestation under 37 weeks) .. 7.3 13.0 15.2 15.1
Percent of mothers:
15.6 434 40.8 42.4
National Household Education Survey
Percent of children aged 3 to 7 years:
Is there a particular clinic, health center, doctor's office, or
‘other place the child is usually taken when sick?
Yes, an emergency room 53 14.7 172
No 34 83 61
Child has a usual place where they are taken for routine care 418 40.1 40.2
Child ever had one or more disabling conditions .. 175 23.8 24.7
National Health Interview Survey
Percent of children under age 18 who:
Visited the doctor in the past year.. 84.0 80.0
Visited the dentist in the past year 62.0 41.0
Current Population Survey
Percent of persons:
Covered by private heatth insurance for all or part of the year 80.0 214 16.0
Covered by medicaid for all or part of the year ..., 61 54.5 718
Not covered by health insurance at any time during the year. 124 26.8 18.0
Survey of Income and Program Participation
Percent of persons living in families that had enough food in
the past 4 months 98.6 89.0 86.9 85.8

Nore: Data are for individuals, except that the Survey of income and Pro-
‘gram Participation results are based on family-level data, person-weighted.
National Matemal and Infant Health Survey data were collected in 1989 and
1990, with 1988 as the reference period. Current Population Survey data were
collected in March 1994, with 198 as the reference period. National House-
hold Education Survey data were collected from January through April 1993;

the reference period is the period since the beginning of the 1992-93 schoo!
year, or the current period. Survey of Income and Program Particpation data
collection and reference periods are September through December 1992.
‘National Health Interview Survey data were collected from January through
December 1993, with the 12 months prior to the interview as the reference
Period.

10 Monthly Labor Review May 1996



Poor in America

dren’® that report receiving welfare assistance sometime dur-
ing the reference period. To allow for maximum compara-
bility of results, the following discussion usually focuses on
poor, single-parent families because the definition of fami-
lies receiving welfare varies across some surveys and is ab-
sent in others.” The accompanying tables present data for all
individuals living in families receiving welfare assistance,
rather than for persons in poor families that receive assis-
tance. It is not uncommon for families who receive welfare at
some point over the reference period to have income above
the poverty line measured over the entire interval. For ex-
ample, job loss or divorce could make a family eligible for
welfare assistance at some point in the period, even if the
average income over the whole period is above the poverty
line. In addition, some programs have eligibility thresholds
above the poverty line. Because results are similar for both
groups, we present tabulations for only one. In those cases in
which results are substantially different, results for poor fami-
lies receiving welfare also are noted.

Percent distributions of persons and of mean income and
expenditures of families are presented for four family types:
nonpoor families; poor families; poor, single-parent families;
and families receiving welfare.

A portrait of the poor

The results for individuals living in poor and nonpoor fami-
lies are divided into seven categories: income sources,
spending patterns, housing, consumer durables and utilities,
crime and neighborhood, health and nutrition, and educa-
tion. In the first four categories, the unit of data collection is
the family; thus, results are presented by family chracteristic.
For example, the mean total expenditures of poor families is
$11,596. The unit of data collection for the last two catego-
ries is the individual in general; thus, results are for the aver-
age individual of the relevant population. For example, 27
percent of poor children aged 5 to 7 years have fewer than
10 books. The crime and neighborhood category has mea-
sures of both family (or household) and individual charac-
teristics. The final table presents an “index of deprivation”
for individuals that reflects several family characteristics.

Summary tables of all variables discussed in the text are
provided for each category. The source survey for each vari-
able is noted in each table. All differences discussed below
are statistically significant at the 1-percent level.

Income sources. Poor families differ from nonpoor fami-
lies both in the levels and sources of their incomes. (See table
1.) The average poor person lives in a family whose income
is about a sixth as much as the family income of the average
nonpoor person ($8,501 versus $55,394). For the single-par-
ent poor and those in families receiving welfare, average

6 Monthly Labor Review May 1996

Income and selected faxes and transfers
of families in 1993

Single- | Fomilies
nom |Nompeet| PE, | meet oc
families | welfare
Current Population
Survey
Total before-tax
family inCOMA nn) $55,394 | $8,501] $6,704 | $12,678
Percent of income
from:
Wages and salaries.., 78.9] 50.0 35.8 46.0
Self-employment
‘eamings .. wf 6.2 17 8 13
Public assistance/
welfare ... so 2] 203 30.8 346
Selected taxes and
transfers:
Federal income tax...) $6,878 $15 7 $268
State income tax 4,805 19 7 95
FICA payroll 1ax.. 3,083 370 187 446
Eamed income tax
credit. wn] 16 484 356 321
Public assistance/
115] 1,727 2,701 4,381
65| 1392) 1,871 2)241
Nore: Family-leval data, person-weighted. Data collected in March 1994,
with 1993 as the reference period.

family incomes are $6,794 and $12,678."

The average nonpoor person lives in a family that receives
85.1 percent of its income from wages, salaries, and self-em-
ployment earnings, compared to 52 percent for the poor and
only 36 percent for those in poor, single-parent families. A
larger proportion of the income of poor families comes from
public assistance and welfare: 20 percent, compared with
only 0.2 percent for the nonpoor. For those in poor, single-
parent families, 40 percent of family income comes from pub-
lic assistance and welfare.

Not surprisingly, poor families pay less in taxes and re-
ceive more in government transfers than do the nonpoor. On
average, the Earned Income Tax Credit fully offsets the Fed-
eral and State income and FICA payroll taxes for the family of
the average poor person. Additional taxes, such as sales taxes,
are not included in these calculations. The family of the aver-
age nonpoor person pays an estimated $11,660 in Federal and
State income and FICA taxes (less the Earned Income Tax
Credit). The average poor person lives in a family that re-
ceives $1,727 in public assistance and welfare and $1,392 in
food stamps. For those in poor, single-parent families, wel-
fare and food stamp transfers are $2,701 and $1,871 ($4,381
and $2,241 for families receiving welfare).

Spending patterns. In this section, expenditure data from
the Consumer Expenditure Survey, in conjunction with the
official poverty thresholds, are used to determine if an indi-
vidual lives in a poor family. Individuals defined as poor us-
ing expenditure data may not have the same family charac-



1 person and annual income under $7,500, 2 or 3 persons and
annual income under $10,000, 4 persons and annual income under
$15,000, 5 persons and annual income under $17,500, 6 or 7 per-
sons and annual income under $20,000, 8 persons and annual
income under $25,000, or 9 or more persons and annual income
under $30,000. In the National Household Education Survey, a
family is considered under the poverty threshold if it has: 2 or 3
persons and annual income under $10,000, 4 or 5 persons and
annual income under $15,000, 6 or 7 persons and annual income
under $20,000, 8 persons and annual income under $25,000, or 9
or more persons and annual income under $30,000. For the High
School and Beyond Survey, children who report family incomes

below $8,000 are considered poor.

Poverty rates across surveys are fairly similar. From 13 to 16
percent of persons living in families in the United States are poor
based on data from the American Housing Survey, the Consumer
Expenditure Survey, the Current Population Survey, the National
Crime Victimization Survey, and the Survey of Income and Pro-
gram Participation. For the National Health Interview Survey (per-
sons under 18), the National Household Education Survey, and the
National Maternal and Infant Health Survey, the poverty rates are
higher (20 percent or greater) because the samples consist of chil-
dren in the relevant age group in the former two surveys and of
mothers giving birth in the reference period in the latter.

Appendix C: Family-weighted results for the cps and the Consumer Expenditure Survey

eBay Income and selected taxes and transfers of families in 1993
[Family-weighted]
Single-porent Families receiving
Income and selected taxes and transfers Nonpoor families Poot tomites pou faites Wettne
Current Population Survey
Total before-tax family income .. $52,785 $7,370 $8,209 $10,972
Percent of total before-tax family income from:
‘Wages and salaries .... 76.2 46.3 36.4 42.9
‘Seff-empicyment samings .. 6.2 43 7 13
Public assistance/weltare 2 20.8 39.0 370
Selected taxes and transfer
Federal income tax $6,639 $9 $4 $220
State income tax 1,726 18 7 80
FCA payroll tax 2,881 299 178 963
Eamed Income 98 417 358 301
Public assistance/welfare 83 1,538 2,421 4,055
Food stamps 48 1,204 1,628 2,049
Nore: Family-level data, family-weighted. Data were collected in March 1994, with 1993 as the reference period.
Consumer expenditures by families in 1992-93
[Family-weighted]
Si rent Fomities
Expenditures Nonpoor families Poor families poo ‘arihes receiving welare
‘Consumer Expenditure Interview Survey
Total family expenditures .. $35,038 $10,212 $8,636 $15,193
Percent of total family expenditures for:
Food .. 15.4 29.8 33.3 252
Shelter 18.5 27 259 242
Utilities .. 79 145 13.8 108
rel. 48 48 66 64
Transportation 20.0 102 64 13.3
Health care 58 35 13 22
Entertainment 5.4 29 29 40
Personal insurance and pensions 10.9 5.0 24 45
Nore: Family-level data, tamily-weighted. Quarterly data were collected from January 1992 to December 1993, with a raference period from October 1991
to November 1993. Results are presented for expenditure nonpoor and poor families,
-

Monthly Labor Review May 1996 17



during the survey period.) Fifty-four percent of the poor
households report receiving wages or salaries, and 54 percent
report receiving some type of public assistance. In addition,
Lino finds that, of those households with reference persons
who are unemployed, 65 percent report not working because
they were taking care of family members and 18 percent
Teport not working because of illness.

Scope and method

Nine nationally representative surveys were analyzed to cre-
ate a comprehensive picture of the living situations of
families: the 1993 American Housing Survey, the 1992-93
Consumer Expenditure Survey, the 1993-94 Current Popula-
tion Survey (October 1993 Education Supplement and March
1994 Annual Demographic Supplement), the 1992 High
School and Beyond Survey, the 1992-93 National Crime Vic-
timization Survey, the 1993 National Health Interview Sur-
vey, the 1993 National Household Education Survey (School
Readiness Component and School Safety and Discipline Com-
ponent), the 1989-90 National Maternal and Infant Health
Survey, and the 1992 Survey of Income and Program Partici-
pation—Extended Measures of Well-Being topical module.
Here, the year of the survey refers to the interview or collec-
tion period. Reference periods are noted in the table footnotes
and in the survey descriptions presented in appendix A.

In general, results are shown for individuals living in both
poor and nonpoor families. Families are defined as including
a household head, or reference person, and household mem-
bers related to the head by blood, marriage, or other legal
arrangement. Thus, individuals living alone and unrelated in-
dividuals living in the household are not included. An excep-
tion is the analysis of the National Crime Victimization Sur-
vey; for this survey, results of all households are presented
because data on families were not available.

For all surveys but one, the poor are defined as those
individuals living in families whose before-cash incomes fall
below the official poverty thresholds for their family type.'* For
the Consumer Expenditure Survey, total family expenditures,
rather than incomes, are compared to the official thresholds, In
each of the other surveys, the definition of family before-tax
income is designed to be as close as possible to the definition of
income used by the Census Bureau in calculating official
poverty rates. The definition of family expenditures is the same
as that used in official Bureau of Labor Statistics publications.
(See appendix A.) Because of differences in the questions asked.
and in the definition of income used, it is not possible to match
income levels exactly across surveys. However, because poverty
tates for individuals in each family type are similar across most
of the surveys, any differences are likely to be minimal.

All of the estimates presented in this article were tabulated
on a person-weighted, rather than family-weighted, basis.'*

This is in contrast to the procedure followed in most of the
previous research cited above. In those other studies, aver-
ages across families rather than across individuals are pro-
duced when results by family characteristics of the poor and
nonpoor are tabulated. With the approach used here, one can
make statements about the living conditions of individuals.
For example, in 1993, 40.8 percent of all poor individuals
living in families lived in homes that their families owned. In
most cases, the use of person-weights has little impact on the
findings. For example, results from the American Housing
Survey and those from the Survey of Income and Program
Participation differ only marginally when estimated with per-
son-weights versus family-weights (results not shown). For
the Consumer Expenditure Survey and the Current Popula-
tion Survey, the use of person-weights leads to slightly higher
mean total family expenditures and incomes than when fam-
ily-weights are used; however, the percent distributions of
expenditures and income change little.!”

fson-weights, rather than family-weights, were used here
for two reasons. First, person-weighted results for sur-
veys in which the unit of data collection is the family (the
American Housing Survey; the Consumer Expenditure Sur-
vey; data on income sources, taxes, and benefits in the Cur-
rent Population Survey; and the Survey of Income and Pro-
gram Participation) are more directly comparable to results
from the surveys in which the unit of data collection is the
individual (the remaining five surveys, and the educational
attainment and health insurance receipts components of the
Current Population Survey). Second, the material living con-
ditions of family members are the focus of this article and
weighting each family’s characteristics by the number of
people in the family gives the best approximation of that con-
cept. There is, however, no adjustment for differences in
economies of scale in the household, nor is account taken of
differences between adults and children in terms of their
needs; this is most relevant for understanding the income and
expenditure results. One can say, for example, that the aver-
age family income of individuals living in poor families is
$8,501; however, this does not mean that each person has full
access to this income, but only that the average individual
lives in a household with this income. With greater family
size, individuals would likely be worse off in a welfare sense
than members of smaller families with the same income.

In addition to estimates for individuals living in poor and
nonpoor families, results also are produced for two sub-
populations: individuals in poor, single-parent families and
individuals in families receiving welfare. Poor, single-par-
ent families are defined as families that have incomes below
the official poverty threshold and that have an unmarried
head of household and at least one child under age 18.'*
Families receiving welfare are defined as famities with chil-

Monthly Labor Review May 1996 5



Poor in America

ditures are similar, and both rates rose during the 1980’s, par-
ticularly for the nonelderly.

Daniel T. Slesnick also finds that consumption expenditure-
based poverty rates are lower than income-based measures.>
He notes that the reported postwar trend poverty is sensitive
to the equivalence scale used and, for the late 1970's and the
1980s, to the price indexes used for the analysis.

Other researchers have analyzed measures of specific dimen-
sions of material and economic well-being such as housing,
neighborhood quality, consumer durables, income sources,
spending patterns, and health to study the living conditions of
low-income children and families. For example, Robert Rector
analyzes the 1989 American Housing Survey and finds that
nearly 40 percent of all households with incomes below the of-
ficial poverty line own their own homes, but that only 18 per-
cent of poor, single-parent families are homeowners,® The me-
dian value of homes owned by the poor is 58 percent of the
median value of all homes owned in the United States. In addi-
tion, he reports that only 8 percent of poor households are over-
crowded (defined as more than one person per room), and 53
percent of poor households have some type of air conditioning.

A recent Children’s Defense Fund report summarizes find-
ings along a large number of dimensions of disparities in re-
sources and outcomes between poor and nonpoor children.’
The evidence ranges from analysis of national data sources to
studies limited to a specific State or community. According to
the report, poor children have higher rates of various health
problems, inferior housing, inferior schools, less access to
computers and educational materials at home, inferior child
care, higher rates of child abuse, higher rates of parental sub-
stance abuse, more frequent moves, more exposure to toxic
chemicals and pollution, higher rates of lead poisoning, and
other disadvantages.

Ue” data from the American Housing Survey, the de-
cennial census, the Consumer Expenditure Survey, and
the National Health Interview Survey, Susan Mayer and Chris-
topher Jencks examine trends in various measures of the ma-
terial well-being of children from 1969 to 1989.8 They find
that children in families in the lowest quintile of income have
made both absolute and relative gains over time across a vari-
ety of measures of housing quality. Low-income children are
now less likely to live in crowded housing and more likely to
live in homes with indoor plumbing, central heat, and major
appliances such as air conditioners and dishwashers. In addi-
tion, they are now more likely to have seen a doctor in the
preceding year. At the same time, low-income children are
now less likely to live in households that own their own homes
or have access to an automobile, and are more likely to live in
neighborhoods identified by their parents as having a crime
problem.

Mayer and Jencks suggest that some of the improvement in

4 Monthly Labor Review May 1996

housing conditions may have resulted because newer housing
for low-income families became available as their more afflu-
ent counterparts moved to the suburbs. Government programs
may also have played a role in improving living conditions in
some dimensions. For example, these researchers report that
the proportion of low-income children having access to a tele-
phone grew during the 1970's, when universal access was a
government policy, but ceased growing during the 1980's
when universal access declined as a policy priority. In sum-
mary, Mayer and Jencks note that, despite the gains experi-
enced by low-income children, their measured living condi-
tions remain significantly lower relative to other children’s.

Um data from the 1992-94 Consumer Expenditure Sur-
vey, William D. Passero” examines selected characteris-
tics and spending patterns of working poor and nonworking
poor consumer units. A consumer unit is defined as poor if it
received welfare income" at any time during the preceding
12 months, and as working poor if the unit had at least one
member who worked outside the home for at least 27 weeks
over the preceding 12 months."'

Passero reports that consumer units in the working poor
group are larger; these units have an average of more than 4
persons, compared with 3.5 persons in the nonworking poor
group. Consumer units in the working group report average
total expenditures that are 85 percent higher than those of the
nonworking group. Not surprisingly, the nonworking poor
apportion a greater share of expenditures to commodities such
as food, shelter, and utilities. About 40 percent of spending is
for shelter and utilities and 30 percent is for food among the
nonworking group, while only 30 percent of the total is for
shelter and utilities and 20 percent is for food among the con-
sumer units with at least one working member. The spending
share on transportation for the working poor is almost twice
(18 percent) that of the nonworking poor. Ownership of vari-
ous durable items, or access to them in the home, is signifi-
cantly lower for the nonworking poor. However, home com-
puters are scarce among both groups; about 10 percent of the
working poor report home access to or ownership of comput-
ers, while 4 percent of the nonworking poor do so.

Mark Lino examines income sources, spending patterns, and
characteristics of poor households with at least one child, using
the 1990-92 Consumer Expenditure Survey.'? Lino applies a
stricter definition of poverty than has generally been used by
others: a household is poor if its before-tax income is below
the official poverty threshold and its total expenditures are below
the official poverty threshold.'* He reports that a majority of
these poor households have reference persons who are single
parents (51 percent) and that 97 percent of these single parents
are mothers. Food stamps is the most commonly reported source
of income for poor households with children. (Sixty-nine
percent of these households reported income from food stamps



working; broken windows; exposed wiring; holes in the floor; cracks or holes
in wall or ceiling; and rats, mice, or roaches. Problems are severe if there are
five or more of the above.

% Specifically, we include all variables, except “lives without a color
television,” for which 95 percent or more of nonpoor individuals do not live
in families that report the deprivation.

TM Patricia Ruggles, Drawing the Line—Alternative Poverty Measures and

Appendix A. Descriptions of the surveys

Their Implication for Public Policy (Washington, The Urban Institute Press,
1990)

S Sanders Korenman, Jane E. Miller, and John E. Sjaastad, “Long-Term
Poverty and Child Development in the United States: Results from the NLSY,”
Children and Youth Services Review, vol. 17, nos, | and 2, 1994.

% Jane E. Miller and Sanders Korenman, “Poverty and Children’s Nutri-
tional Status in the United States,” American Journal of Epidemiology, vol.
140, no, 3, 1994.

American Housing Survey

‘These data are from a sample of housing units interviewed between
July and December 1993, and were collected by the Bureau of the
census for the Department of Housing and Urban Development. The
reference period is 1993. The same basic sample of housing units is
interviewed every 2 years, The sample is updated by adding newly
constructed housing units and units discovered through coverage im-
provement efforts.

For the 1993 American Housing Survey—National, a sample of ap-
proximately 56,700 housing units was selected for interview. About
3,300 of these units proved to be ineligible because they no longer
existed or becanse they did not meet the definition of a housing unit
(intended for occupancy as separate living quarters, not as group quar-
ters). About 2,300 of the remaining units (both occupied and vacant
housing units) were classified as “type A” noninterview because (a) no
one was at home after repeated visits, (b) the respondent refused to be
interviewed, or (c) the interviewer was unable to find the unit.

Sampled units are followed up by telephone or personal visit until
an interview is obtained or they are classified as type A’s. There is no
oversampling. Biases that arise from nonsampling errors, which are
larger than those due to sampling errors, are corrected to the extent
possible through weighting changes.

Consumer Expenditure Interview Survey

The expenditure results presented in this article are based on data
collected from January 1992 through December 1993 in the quar-
terly interview portion of the Consumer Expenditure Survey. The
period to which the expenditures refer is October 1991 through No-
vember 1993. The survey is sponsored by the Bureau of Labor Sta-
tistics, with data collected by the Bureau of the Census under con-
tract to BLS.

The sample is designed to represent the total civilian noninsti-
tutional population and persons living in group quarters such as hous-
ing facilities for workers and college students. Military personnel
living on base are not sampled. Approximately 5,000 consumer units,
similar to households, are interviewed each quarter.

Expenditures are defined as the transaction costs, including ex-
cise and sales taxes, of goods and services acquired during the inter-
view period. Expenditures include those for gifts, but exclude the
value purchases or portions of purchases directly attributable to busi-
ness purposes. Also excluded are periodic credit or installment pay-
ments on goods or services already acquired, although data on inter-
est payments are collected, For each durable, the full purchase price
is included as the expenditure. Vehicle purchase expenditures include
the net outlays (purchase price minus trade-in value) on new and
used cars and trucks, and expenditures for other vehicles such as
motorcycles and private planes. For owned housing, neither the full
purchase price of the housing nor the mortgage principle payment is
included in expenditures; however, mortgage interest and related
charges are included. Each quarter is assumed to be an independent

sample and is treated as such when population weights are incorpo-
rated. Given this assumption, data from each quarterly interview
are aggregated and expenditures are annualized for the purposes of
this study.

Current Population Survey

‘Two supplements of the Current Population Survey are used for this
study: the 1994 March Supplement or Annual Demographic
Suppleinent, and the 1993 October Supplement on Education. The
income and health insurance questions were asked in the 1994
March Supplement, with 1993 as the reference period. The
collection and reference period for the education questions is
October 1993.

The Current Population Survey is conducted by the Bureau of the
Census for the Bureau of Labor Statistics. The population covered
includes the civilian noninstitutional population of the United States
and members of the Armed Forces in the United States living off post
or with their families on post, but excludes all other members of the
Armed Forces. The sample is about 60,000 households, including
families and unrelated individuals, data are reported for more than
150,000 people. Coverage does not include residents of U.S. territories
or other areas outside the 50 States and the District of Columbia.

High School and Beyond _Survey

‘The data used here are drawn from the 1992 follow-up survey of the
sophomores of 1980, conducted by the National Center for Educa-
tion Statistics. Data were collected in 1992 and early 1993, with
reference periods of fall 1980 through spring 1992 for education
questions, and 1991 for total household income before taxes.

The High School and Beyond Survey was used to interview some
15,000 sampled members of the sophomore cohort. The survey is a
longitudinal study of students enrolled in public, private, and
parochial secondary schools in 1980 at the sophomore and senior
grades. Parents, teachers, and school officials also were surveyed.
The schools were selected as a stratified probability sample.

Notional Crime Victimization Survey

The data from this survey were collected by the Bureau of the
Census for the Department of Justice between January 1992 and
June 1993, and reflect incidents occuring from January | through
December 31, 1992, The survey collects information on vic-
timization events for a sample of 60,000 households (130,000
persons). Usually, residents of each address are interviewed seven
times over 3 years, Data are gathered from residents living through-
out the United States, including persons living in group quarters,
‘such as dormitories, rooming houses, and religious group dwell-
ings. Crew members of merchant vessels, Armed Forces personnel
living in military barracks, and institutionalized persons, such as

Monthly Labor Review May 1996 15