H-1 

APPENDIX H-DATA ON POVERTY 

CONTENTS 

Measuring Poverty 

Trends in the Overall Poverty Rate 

Poverty Rates for Individuals in Selected Subgroups of the Population 

Poverty Rates for Families 

Poverty Under Alternative Measures of Income and Price Inflation 

Poverty by Metro Area and State 

Trends in Family Composition and Income, 1967-2002 

Definitions and Methods 

Income Measure 

Income Shares 

Trends in Pretax Cash Incomes by Type of Family 

Pretax Adjusted Family Income 

Average Family Cash Income By Family Type 

Antipoverty Effectiveness of Various Cash and Noncash Transfers 

References 

MEASURING POVERTY 

 When the Federal Government began measuring poverty in the early 

1960s, the continued existence of poor people in a time of the “Affluent 

Society” seemed anomalous. Official concern soon translated into efforts to 

measure the size of the poverty population, and the search began for 

programmatic ways to alleviate poverty. The first rough estimates of the 

incidence of poverty were based on survey data indicating that families 

generally spent about one-third of their income on food. A poverty level income 

was then calculated by using as a yardstick the amount of money necessary to 

purchase the lowest cost “nutritionally adequate” diet calculated by the 

Department of Agriculture (roughly equivalent to the current Thrifty Food Plan). 

This price tag was multiplied by three to produce a poverty threshold. The 

assumption underlying this procedure is that if a family did not have enough 

income to buy the lowest cost nutritionally adequate diet, and twice that amount 

to buy other goods and services, it was “poor.” Adjustments were made for the 

size of the family, the sex of the family head, and for whether the family lived 

on a farm. Farm families were assumed to need less cash income because their 

needs could be met partially by farm products, particularly food. The 

adjustments for sex of the family head and for farm-nonfarm residence were 

abolished in 1981. Policy officials made a major change to the basic approach 

for calculating the poverty threshold in 1969. Rather than multiplying the cost of 

the Thrifty Food Plan by three to establish the poverty threshold, officials 
H-2 

decided to simply increase the previous year's threshold by the change in the 

Consumer Price Index (CPI). 

 In addition to this major change, the Census Bureau made minor revisions 

in its method of estimating the poverty threshold four times—in 1966, 1974, 

1979, and 1981. These revisions changed the estimate of the poverty rate. The 

first two revisions slightly reduced the estimated number of poor, while the 

more recent revisions slightly increased the number. In 1984, the Census Bureau 

also revised its method of imputing missing values for interest income, which 

slightly lowered the estimated poverty rate. 

 Data on income and poverty after 1987 may not be comparable to data in 

earlier years because of changes in the methods used by the Census Bureau to 

process survey results. This new processing system was applied to 1987 data so 

that 1988 and 1987 data are comparable. Revised 1987 data are denoted as 

1987R. The new processing system increased aggregate income by 0.9 percent 

and lowered the poverty rate for 1987 by 0.1 percent. 

 The tables in this subsection provide poverty data calculated using the 

official Census definition of poverty. The Census definition of poverty has 

remained fairly standard over time and is useful for measuring progress against 

poverty. Under this definition, poverty is determined by comparing pretax cash 

income with the poverty threshold. 

 Table H-1 shows the population, number of persons in poverty, and the 

poverty rate in 2002 by age, race, region and family type. In 2002, 12.1 percent 

(34.6 million persons) of the total U.S. population lived in poverty. Of all 

demographic groups shown, poverty was second highest among female-headed 

families with children (33.1 percent). Among children under age 18, 16.7 

percent, or 12.1 million children, lived in poverty in 2002. 

 The weighted average poverty thresholds for families of various sizes for 

selected years between 1959 and 2002 are presented in Table H-2. 

TRENDS IN THE OVERALL POVERTY RATE1

 In 1959, the overall poverty rate for individuals in the United States was 

22 percent, representing 39.5 million poor persons (Tables H-3 and H-4). 

Between 1959 and 1969, the poverty rate declined dramatically and steadily to 

12.1 percent. As a result of a sluggish economy, the rate increased slightly to 

12.5 percent by 1971. In 1972 and 1973, however, it began to decrease again. 

The lowest rate over the entire 24-year period occurred in 1973, when the 

poverty rate was 11.1 percent. At that time roughly 23 million people were poor, 

42 percent less than were poor in 1959. 

 

1

 All poverty trend information is based upon published Census Bureau data contained in Current 

Population Reports, Series P-60, Nos. 124, 140, 145, 149, 154, 157, 161, 166, 168, 174, 180, and 

185. These figures may differ with other parts of this report which provide a more refined 

breakdown of this age category. Data for blacks, the aged, and nonaged population were not 

available for the years 1961-65. 
TABLE H-1 -- POVERTY STATUS OF PERSONS BY AGE, ETHNICITY, REGION, 

AND FAMILY TYPE, 2002 

Category Poverty rate (percent) Population (thousands) Percent total of population Number of poor (thousands) Percent of poverty population Poverty difference 2001-2002 Perc

diffe

Age: 

Under 18 16.7 72,696 25.5 12,133 35.1 400 018-64 10.6 178,388 62.5 18,861 54.6 1,101 0

65 and older 10.4 34,234 12.0 3,576 10.3 163 0

Race/Ethnicity:1

White2 10.2 230,376 80.7 23,466 67.9 727 0

Black3 24.1 35,678 12.5 8,602 24.9 466 1

Hispanic4 21.8 39,216 13.7 8,555 24.7 558 0

Region: 

Northeast 10.9 51,472 19.1 5,871 17.0 184 0Midwest 10.3 63,155 23.3 6,616 19.1 650 0

South 13.8 94,640 34.9 14,019 40.6 505 0West 12.4 61,522 22.7 8,064 23.3 325 0

Family Type: 5

Unrelated individuals 19.9 42,539 15.7 8,478 24.6 -209 -Female-headed families 33.1 39,000 14.4 12,907 37.4 -164 -Married-couple families 6.2 177,042 65.3 10,982 31.9 58 0

Unrelated subfamilies 48.8 1,288 4.8 628 1.8 -152 2

Total 12.1 285,317 100 34,570 100 1,663 0

1 Numbers in this category sum to more than national totals, and percentages to more than 100 due to responses regarding race. 2 Refers to people who reported white and did not report any other race category. 3 Refers to people who reported black and did not report any other race category. 4 Persons of Hispanic origin may be of any race. 5 About 1.5 million families are in categories other than the ones listed here. 

Source: U.S. Census Bureau (2003). 
TABLE H-2 -- WEIGHTED AVERAGE POVERTY THRESHOLD FOR NONFARM FAMILIES OF SPECIFIED 

SIZE, SELECTED YEARS 1960-2002 

Unrelated Individuals Two Persons Families of More Than Two Persons Calendar 

Year All 

ages 

Under 65 65 or older All 

ages 

Head 

under 65

Head 

65 or older 

Three 

persons 

Four 

persons 

Five 

persons 

Six 

persons 

Seve

person

1960 1,490 1,503 1,418 1,924 1,982 1,788 2,359 3,022 3,560 4,002 4,921965 1,582 1,526 1,512 2,048 2,114 1,906 2,514 3,223 3,797 4,264 5,248 

1970 1,954 1,626 1,861 2,525 2,604 2,348 3,099 3,968 4,680 5,260 6,468 

1975 2,724 2,010 2,581 3,505 3,617 3,257 4,293 5,500 6,499 7,316 9,022 1980 4,190 2,797 3,949 5,363 5,537 4,983 6,565 8,414 9,966 11,269 12,76

1985 5,469 5,400 5,156 6,998 7,231 6,503 8,573 10,989 13,007 14,695 16,651990 6,652 6,800 6,258 8,509 8,794 7,905 10,419 13,359 15,792 17,839 20,241991 6,932 7,086 6,532 8,865 9,165 8,241 10,850 13,924 16,456 18,587 21,051992 7,143 7,299 6,729 9,137 9,443 8,487 11,196 14,335 16,952 19,137 21,591993 7,363 7,518 6,930 9,414 9,728 8,740 11,522 14,763 17,449 19,718 22,831994 7,547 7,710 7,108 9,661 9,976 8,967 11,821 15,141 17,900 20,235 22,921995 7,763 7,929 7,309 9,933 10,259 9,219 12,158 15,569 18,408 20,804 23,551996 7,995 8,163 7,525 10,145 10,507 9,484 12,273 16,183 22,447 22,447 25,821997 8,183 8,350 7,698 10,473 10,805 9,712 12,802 16,400 19,516 21,885 24,801998 8,316 8,480 7,818 10,634 10,972 9,862 13,003 16,660 19,380 22,228 25,251999 8,501 8,667 7,990 10,869 11,214 10,075 13,290 17,290 19,680 22,727 25,9120002 8,794 8,959 8,259 11,239 11,590 10,419 13,738 17,603 20,127 23,528 26,75

2001 9,039 9,214 8,494 11,569 11,920 10,715 14,128 18,104 20,819 24,195 27,512002 9,183 9,183 8,628 11,756 12,110 10,885 14,348 18,392 21,405 24,576 28,00

1 Poverty threshold for seven persons, not seven persons or more. 2 Based on a November 2001 weighting correction. 

Source: U.S. Census Bureau, technical papers. 
H-5 

TABLE H-3 -- NUMBER OF PERSONS IN POVERTY BY 

DEMOGRAPHIC GROUPS, SELECTED YEARS 1959-2002 

[Numbers in Thousands]

Year Overall Aged Children1

Individuals 

in FemaleHeaded 

Families2

Black Hispanic 

Origin3 White 

1959 39,490 5,481 17,552 7,014 9,927 NA 28,484 

1960 39,851 NA 17,634 7,247 NA NA 28,309 

1965 33,185 NA 14,676 7,524 NA NA 22,496 

1970 25,420 4,793 10,440 7,503 7,548 NA 17,848 

1975 25,877 3,317 11,104 8,846 7,545 2,991 17,770 

1980 29,272 3,871 11,543 10,120 8,579 3,491 19,699 

1985 33,064 3,456 13,010 11,600 8,926 5,236 22,860 

1990 33,585 3,658 13,431 12,578 9,837 6,006 22,326 

1991 35,708 3,781 14,341 13,824 10,242 6,339 23,747 

19924

 38,014 3,928 15,294 14,205 10,827 7,592 25,259 

1993 39,265 3,755 15,727 14,636 10,877 8,126 26,226 

1994 38,059 3,663 15,289 14,380 10,196 8,416 25,379 

1995 36,425 3,318 14,665 14,205 9,872 8,574 24,243 

1996 36,529 3,428 14,463 13,796 9,694 8,697 24,650 

1997 35,574 3,376 14,113 13,494 9,116 8,308 24,396 

1998 34,476 3,386 13,467 12,907 9,091 8,070 23,454 

1999 32,258 3,167 12,109 11,764 8,441 7,876 22,169 

20005

 31,581 3,323 11,587 10,926 7,982 7,747 21,645 

2001 32,907 3,414 11,733 11,223 8,136 7,997 22,739 

20026

 34,570 3,576 12,133 11,657 8,602 8,555 23,466 1 All children including unrelated children. 

2

 Does not include females living alone. 

3

 Hispanic origin may be of any race; it is an overlapping category. 4

 For 1992, figures are based on 1990 Census population controls 

5

 Data for 2000 are consistent with 2001 data through implementation of Census 2000-based 

population controls and a 28,000 sample expansion to the March Current Population Survey. 

6

 Starting in 2002, “Black” refers to people who reported only black as their racial category, 

and “White” refers to people who reported only white as their racial category. 

NA-Not available. 

Source: U.S. Census Bureau (2003 and various years). 

 The poverty rate increased by 1975 to 12.3 percent, and after 1978 the 

poverty rate rose steadily, reaching 15.2 percent in 1983. Between 1983 and 

1993, the poverty rate moved up and down within a narrow range of about 2.5 

percentage points, declining somewhat during economic recoveries and rising 

somewhat during economic downturns. However, poverty declined every year 

between 1993 and 2000, reaching a low of 11.3 percent, the lowest rate since 

1974. The rate rebounded slightly in 2001 and 2002, rising to 12.1 percent, 

which absent recent years would have been lower than any year since the 1970s. 

The poverty rate for children followed a similar path, falling prior to 1969, 

fluctuating between about 15 and 17 percent in the 1970s, and then remaining 

between about 20 and 23 percent during the 1981 to 1996 period. Since 1996, 

the children’s poverty rate fell from 20.5 percent in 1996 to 16.2 percent in 
H-6 

2000 – a 21 percent decline. The rate rose slightly in 2001 and 2002, but 

remained in the 16 percent range last seen in 1979. 

TABLE H-4-- POVERTY RATES FOR DEMOGRAPHIC GROUPS, 

SELECTED YEARS 1959-2002 

Year Overall Aged Children1

Individuals 

in FemaleHeaded 

Families2

Black Hispanic 

Origin3 White 

1959 22.4 35.2 27.3 49.4 55.1 NA 18.1 

1960 22.2 NA 26.9 48.9 NA NA 17.8 

1965 17.3 NA 21.0 46.0 NA NA 13.3 

1970 12.6 24.6 15.1 38.1 33.5 NA 9.9 

1975 12.3 15.3 17.1 37.5 31.3 26.9 9.7 

1980 13.0 15.7 18.3 36.7 32.5 25.7 10.2 

1985 14.0 12.6 20.7 37.6 31.3 29.0 11.4 

1990 13.5 12.2 20.6 37.2 31.9 28.1 10.7 

1991 14.2 12.4 21.8 39.7 32.7 28.7 11.3 

19924

 14.8 12.9 22.3 39.0 33.4 29.6 11.9 

1993 15.1 12.2 22.7 38.7 33.1 30.6 12.2 

1994 14.5 11.7 21.8 38.6 30.6 30.7 11.7 

1995 13.8 10.5 20.8 36.5 29.3 30.3 11.2 

1996 13.7 10.8 20.5 35.8 28.4 29.4 11.2 

1997 13.3 10.5 19.9 35.1 26.5 27.1 11.0 

1998 12.7 10.5 18.9 33.1 26.1 25.6 10.5 

1999 11.9 9.7 17.1 30.5 23.6 22.7 9.8 

20005

 11.3 9.9 16.2 28.5 22.5 21.5 9.5 

2001 11.7 10.1 16.3 28.6 22.7 21.4 9.9 

20026

 12.1 10.4 16.7 28.8 24.1 21.8 10.2 1

 All children including unrelated children. 

2

 Does not include females living alone. 

3 Hispanic origin may be of any race; it is an overlapping category 

4 For 1992, figures are based on 1990 Census population controls. 5

 Data for 2000 are consistent with 2001 data through implementation of Census 2000-based 

population controls and a 28,000 sample expansion to the March Current Population Survey.

6

 Starting in 2002, "Black" refers to people who reported only Black as their racial category, 

and "White" refers to people who reported only White as their racial category. 

Source: U.S. Census Bureau (various years). 

POVERTY RATES FOR INDIVIDUALS IN SELECTED SUBGROUPS 

OF THE POPULATION 

 As Table H-4 illustrates, there are substantial differences between the 

overall poverty rate and the poverty rates of individuals in certain demographic 

subgroups. Most notably, blacks, individuals in female-headed households, and 

Hispanics have poverty rates that greatly exceed the average. The poverty rates 

for individuals in female-headed households remained above 35 percent over the 

1959-97 period. However, it declined every year after 1991 and in 2000 reached 

its lowest level ever at 28.5. The poverty rate for blacks and Hispanics has 

remained near 30 percent during the 1980s and mid 1990s. However, both rates 
H-7 

declined every year after the early 1990s and for blacks it reached its lowest 

level ever in 2000 at 22.5 percent, and for Hispanics reached a record low of 

21.4 percent in 2001. The poverty rate for the aged, which exceeded the overall 

poverty rate in 1959, fell quickly beginning in the 1960s. By 1999 it had reached 

the remarkably low level of 9.7, a decline of over 70 percent since 1959. The 

poverty rate for whites was below the overall poverty rate throughout the entire 

1959-2002 period. It was 10.4 percent in 2002. The poverty rate for children 

exceeded the overall poverty rate every year between 1959 and 2002. 

POVERTY RATES FOR FAMILIES2

 Table H-5 shows the composition of the poverty population for various 

demographic groups for selected years between 1959 and 2002. Table H-6 

presents poverty data for families and unrelated individuals (individuals living 

alone). Female-headed families with children and unrelated individuals are more 

likely to be poor than other families with children or families with aged 

members. In 2002, 33.6 percent of female-headed families with children were 

poor, compared with 7.6 percent of male-present families. Although only 6.7 

percent of all families with an aged member were poor, 19.5 percent of all aged 

unrelated individuals were poor. About 20.7 percent of nonaged unrelated 

individuals were poor. 

POVERTY UNDER ALTERNATIVE MEASURES OF INCOME AND 

PRICE INFLATION

 The Census Bureau publishes data that reflect two adjustments in the 

official definition of poverty. The first of these is an alternative inflation 

adjustment. The official poverty line is based on a procedure developed in 1965 

with yearly adjustments for inflation using the CPI. The CPI, in turn, is based on 

the yearly change in prices of goods used by most Americans. Prior to 1983, the 

CPI measured housing prices using a procedure that included changes in the 

asset value of owned homes. Because the asset value of houses was growing so 

much faster than the consumption value, the inflation rate that included asset 

values was excessive. 

 In 1983 the Bureau of Labor Statistics began using a rental equivalence 

approach to measure the value of housing. The official CPI-U inflation rate is 

based on the asset value of housing prior to 1983 and rental equivalence in 1983 

 

2

 Income figures reported in this subsection are from the March Current Population Survey (CPS) 

computer data files. There is a tendency in surveys, such as the CPS, for respondents to underreport 

their incomes by both source and amount. Reporting of income from earnings is usually more 

accurate than reporting of income from other sources. In general, CPS estimates of amounts or 

numbers of recipients of various cash and noncash transfer programs tend to be lower than 

administrative program totals. As a result, the data are a better reflection of general trends and 

patterns than of absolute numbers with income from a particular source, or the amount received. 

Unrelated subfamilies are included as families in this analysis. The Census Bureau excludes such 

families from its poverty counts. 
H-8 

and later. To provide a consistent time series, the Bureau constructed an 

experimental series, the CPI-U-X1, for 1967-82 based on rental equivalence. 

 The general effect of using the CPI-U-X1 is to lower inflation in past 

years which in turn has the effect of lowering poverty thresholds for those years. 

A lower threshold means that fewer people are poor. As can be seen by 

comparing the first two columns in Table H-7, adjusting the poverty threshold 

using the CPI-U-X1 reduced the official poverty rate by between 1.3 and 1.5 

percentage points in most years between 1979 and 2002. In 2002, the CPI-U-X1 

reduced the poverty rate by 1.3 percentage points (11 percent or 3.8 million 

persons). 

 The second adjustment in the official poverty rate made by the Census 

Bureau is to expand the definition of income to take into account some noncash 

income, including government benefits. Under the procedures by which the 

official poverty rate is calculated, only cash is counted in determining whether a 

family is poor; income from cash welfare programs counts, but benefits from 

food programs, medical care, social services, education and training, and 

housing are not included in the calculation. Moreover, because government 

spending on means-tested noncash benefits has increased more rapidly than 

spending on means-tested cash benefits over the years, ignoring noncash 

benefits may be an increasingly serious omission if we want a broad picture of 

the impact of government programs on poverty. 

 The question of how to value noncash benefits raises a variety of 

substantive and technical issues. The Census Bureau has been working on these 

issues, consulting with academic experts, sponsoring conferences, and issuing 

technical reports for many years. In 1997, the Bureau published a consistent 

historical data series, covering the years 1979-91, to trace the impact of a variety 

of taxes and noncash benefits on poverty and income. The measurement of 

noncash benefits extended beyond government spending for the poor to include 

government spending programs such as Medicare that are not means tested as 

well as to employer contributions to employee health plans. 

 To examine the impact on income and poverty of various State and 

Federal taxes, government noncash programs, employer-provided benefits, and 

so forth, the Bureau has adopted a framework that includes 15 definitions of 

income. By comparing income under these multiple definitions, it is possible to 

estimate the impact of the various income sources on the average income and 

the poverty rates of individuals and families. 

 Income definition 14 is of interest to those concerned with the impact of 

government means-tested, noncash benefits on poverty rates. Unlike the official 

poverty rate, which includes only cash government benefits, definition 14 

includes the effects of State and Federal taxes, employer-provided benefits, nonmeans-tested government benefits, and means-tested noncash benefits including 

food stamps, housing, school lunch, and the fungible value of Medicaid. 
TABLE H-5--COMPOSITION OF POVERTY POPULATION FOR SELECTED DEMOGRAPHIC GROUPS

SELECTED YEARS 1959-2002 

 1959 1966 1975 1985 1990 1993 1996 1999 2000 2001 Aged 13.9 17.9 12.8 10.5 10.9 9.6 9.4 9.8 10.5 10.4 Children 43.6 42.6 42.1 38.8 39.5 39.5 38.8 36.7 36.0 34.8 Nonaged Adults 42.5 39.5 45.1 50.7 49.7 50.9 51.8 53.5 53.5 54.8 Individuals in Female-Headed Familes2 26.3 36.0 47.4 49.5 53.4 52.4 53.5 52.8 52.7 51.8 

Individuals in All Other Families2 73.7 64.0 52.6 50.5 46.6 47.6 46.5 47.2 47.3 48.2 

Blacks 25.1 31.1 29.2 27.0 29.3 27.7 26.5 25.9 25.3 24.7 

Whites 72.1 67.7 68.7 69.1 66.5 66.8 67.5 68.0 68.5 69.1 Other Races 2.8 1.2 2.1 3.9 4.2 5.5 6.0 6.1 6.2 6.2 

Hispanic Origin 3 NA NA 11.6 15.8 17.9 20.7 23.8 23.1 24.5 24.3 

Individuals in Families:4

With Children NA NA NA NA 68.0 68.7 66.7 63.3 61.5 60.4 

Male Present NA NA NA NA 30.7 32.0 30.1 28.8 28.3 27.9 Female-Headed NA NA NA NA 37.2 36.7 36.5 34.5 33.3 32.5 

Individuals in All Other Families NA NA NA NA 32.0 31.3 33.3 36.7 38.5 39.6 

1 Demographic data are for March of the following year. 2 Includes unrelated or single individuals. 3 Hispanic Origin may be of any race, therefore numbers add to more than 100 percent. 4 Family includes related children under the age of 18. 5 2002 data are not directly comparable to earlier years. Beginning in 2002, CPS respondents could for the first time on the CPS Report belongin

more than one racial group. The 2002 categories for black and whites represent respondents who reported a single race. In earlier years, person

mixed race may have reported themselves as being black, white, or some other race. NA- Not available. Source: 1959-1985 estimates based on data from 'Money Income and Poverty Status of Families and Persons in the United States 1985,' p. 60 N1986-2002 data from March; Current Population Survey; table prepared by CRS. 
TABLE H-6--POVERTY RATES BY FAMILY TYPE, SELECTED YEARS 1987-2002, 

AND PERCENTAGE OF FAMILIES AND UNRELATED INDIVIDUALS BY RATIO OF 

TOTAL INCOME TO POVERTY THRESHOLD, 2002 1, 2

Poverty Rate Ratio of Total Income to Poverty Threshold, 2002 

Family Type 1987 1990 1993 1996 1999 2002 Under 0.50 0.50 to 0.99 1.00 to 1.24 1.25 to 1.49 1.50 to 1.99 2.00 to 2.99 3.00 and Over 2002 T

(Thousa

Total: 

Families 11.0 11.1 12.7 11.3 9.5 9.7 3.9 5.8 3.7 4.2 8.5 17.0 56.9 76,14Unrelated individuals 20.4 20.7 22.1 20.8 19.1 20.4 9.2 11.2 6.3 7.3 10.4 17.9 37.7 47,15

No members age 65 or older: 

Families 11.9 12.2 14.0 12.4 10.1 10.4 4.4 6.0 3.6 4.0 7.7 15.7 58.5 61,52

Unrelated individuals 19.1 19.1 21.3 20.7 18.9 20.7 11.1 9.6 4.6 5.6 8.4 17.9 42.9 35,82

Any member age 65 or older: 

Families 7.2 6.4 7.0 6.4 5.4 6.7 1.8 4.8 4.0 5.1 11.7 22.3 50.2 14,61Unrelated  individuals 23.9 24.7 24.1 20.9 19.7 19.5 3.2 16.3 11.8 12.6 16.8 18.0 21.3 11,33

Families with children: 

Female headed, no husband present 

46.3 45.3 46.7 42.3 36.0 33.6 16.2 17.4 8.9 7.7 12.9 18.6 18.3 9,82

Male-present 8.1 8.5 9.9 8.5 7.1 7.6 2.4 5.2 3.7 4.4 8.9 18.2 57.2 29,52

1 Based on Census “Orshansky” Poverty Levels. 2 Unrelated subfamilies are treated as separate families. Related subfamilies are not treated as separate, but as members of the primary family with w

they reside.. Source: Current Population Survey, table prepared by Congressional Research Service. 
H-11 

TABLE H-7 -- POVERTY UNDER ALTERNATIVE MEASURES OF PRICE 

INCOME AND INFLATION, SELECTED YEARS 1980-2002 

 Poverty Rate Percentage Reduction in Official 

Poverty Associated With: Year Official 

(CPI-U) 

Using 

CPI-U-X1 

CPI-U-X1 With 

Noncash Benefits1 CPI-U-X1 CPI-U-X1 With 

Noncash Benefits1

1980 13.0 11.5 8.6 11.5 33.8 

1985 14.0 12.5 10.1 10.7 27.9 

1990 13.5 12.1 9.5 10.4 29.6 

1991 14.2 12.7 9.9 10.6 30.3 

1992 14.8 13.4 10.5 9.5 29.1 

1993 15.1 13.7 10.7 9.3 29.1 

1994 14.5 13.2 9.8 9.0 29.7 

1995 13.8 12.3 9.0 10.9 34.8 

1996 13.7 12.2 8.9 10.9 35.0 

1997 13.3 11.8 8.8 11.3 33.8 

1998 12.7 11.3 8.2 11.0 35.4 

19992

 11.9 10.6 7.7 10.9 35.3 

20003

 11.3 10.3 7.6 8.8 32.7 

2001 11.7 10.4 7.8 11.1 33.3 

2002 12.1 10.8 8.2 10.7 32.2 

Percent 

change, 

1980-2002 

-6.9 -6.1 -4.7 NA NA 

1

 Including income from capital gains, health insurance supplements to wage or salary income, nonmeans-tested and means-tested government noncash transfers, the value of Medicare, 

the value of regular-price school lunches, the value of Medicaid, the earned income tax credit (EIC), 

less Social Security payroll taxes, less Federal income taxes (excluding the EIC), 

less State income taxes. 

2

 Reflecting Census 2000-Based population controls. 

3

 Reflecting Census 2000-Based population controls and a 28,000 household expansion. 

NA- Not available. 

Source: U.S. Census Bureau (2003 and various years). 

 The question of whether to include medical benefits when measuring 

poverty has great implications on poverty rates. The valuation of medical 

benefits is particularly difficult. Most poverty experts believe that medical 

coverage should not by itself raise poor individuals above the poverty line or 

constitute a major portion of the poverty threshold. The development of the 

poverty thresholds did not take into account medical costs. Although poor 

persons are clearly better off with medical coverage, such benefits cannot be 

used by recipients to meet other needs of daily living. Also, since health 

insurance costs are not imputed to the incomes of those above poverty, it seems 

inappropriate to count health benefits as income for those below the poverty 

line. 
H-12 

POVERTY BY METRO AREA AND STATE 

 Tables H-8 and H-9 present poverty rates for non-metro and metro areas 

and by race in non-metro and metro areas respectively. Table H-8 shows that 

over the period depicted poverty rates in nonmetro areas have consistently been 

several percentage points higher than in metro areas, but several percentage 

points lower than in central cities only, which consistently have had the highest 

poverty rates. For all three areas, poverty rates in 2002 are well below their 

most recent 1993 peak rates in all three areas. For nonmetro areas, the 2002 

poverty rate was 17 percent below its 1993 value; for metro areas, 21 percent 

below; and for central cities only, 22 percent below. 

TABLE H-8 -- POVERTY RATES IN NONMETRO 

AND METRO AREAS, SELECTED YEARS 1980-2002 

 [In Percent] 

Metro 

Year Nonmetro 

Total Central Cities Only 

1980 15.4 11.9 17.2

1985 18.3 12.7 19.0

1990 16.3 12.7 19.0

1991 16.1 13.7 20.2

19921

 16.9 14.2 20.9

1993 17.2 14.6 21.5

1994 16.0 14.2 20.9

1995 15.6 13.4 20.6

1996 15.9 13.2 19.6

1997 15.9 12.6 18.8

1998 14.4 12.3 18.5

1999 14.2 11.2 16.4

20002

 13.4 10.8 16.1

2001 14.2 11.1 16.5

2002 14.2 11.6 16.7

1 For 1992, figures are based on 1990 Census population controls. 

2 Data for 2000 are consistent with 2001 data through implementation of Census 2000-based 

population controls and a 28,000 sample expansion to the March Current Population Survey. 

Source: U.S. Census Bureau (2003 and various years). 

 Table H-9 shows that despite recent progress, poverty among blacks and 

Hispanics remains much higher than poverty among whites in metro areas, nonmetro areas, and inner cities. 

 Table H-10 presents poverty rates by State for 1988-2002, based on 

3-year averages. The data are shown as 3-year averages due to poor statistical 

reliability of State poverty rates in a single year, resulting from small sample 

sizes. 
H-13 

TABLE H-9 -- PERCENTAGE OF PERSONS IN POVERTY BY RACE, 

BY METRO AND NONMETRO RESIDENCE, 2002 

 Metro Race Nonmetro 

 Total Central Cities Only 

All Races 14.2 11.6 16.7 

White only, non-Hispanic 11.0 7.2 9.1 

Black only, non-Hispanic 33.3 22.9 27.0 

Hispanic1

 26.7 21.4 25.1 

1 Persons of Hispanic origin may be of any race. 

Source: U.S. Census Bureau (2003). 

TRENDS IN FAMILY COMPOSITION AND INCOME, 1967-2002 

 In the past 30 years, the level of and inequality among family incomes 

has changed significantly according to all income measures. Between 1967 and 

1973, income increased for all quintiles, and income inequality went down. As 

measured by the Congressional Budget Office, over this time period the lowest 

quintile experienced an increase in mean adjusted family income (AFI; family 

income divided by the poverty threshold for the appropriate family size) of 30 

percent, while income for the highest quintile grew by 21 percent. Since 1973, 

income of the bottom quintile declined through the remainder of the 1970s and 

the 1980s, and rose modestly in the 1990s. Income for the highest quintile has 

risen through this period. 

 While the general trends in families' economic well-being are similar 

regardless of how measured, varying results for the distribution of family 

incomes are obtained depending on which income measure is used. Three 

commonly used income measures (all adjusted for inflation) are family cash 

income, family cash income per capita, and AFI. While no measure perfectly 

captures the economic well-being of families, AFI most accurately accounts for 

differences in family size by incorporating the scale implicit in the official 

Federal poverty thresholds. 

 Family composition in the United States has undergone pronounced 

changes since 1973 (Table H-11). The number of married couples with children 

has been almost flat since 1973. By contrast, the number of families headed by a 

single mother grew by 93 percent over the entire 1973-2000 period, the number 

of non-elderly childless units grew by 105 percent, and the number of elderly 

childless units grew by 61 percent. 

 Changes in family composition also are reflected in the number of 

persons and earners per family. The average family has become smaller, 

reflecting in part relatively fewer families with children (and fewer children in 

those families). The average family also had fewer earners in 2000 than in 1973.
TABLE H-10 -- STATE POVERTY RATES: 3-YEAR AVERAGES, 1988-2002 

State 1988-1990 1990-1992 1992-1994 1994-1996 1996-1998 1998-2000 2000-20

Alabama 19.1 18.4 17.0 16.8 14.7 14.6 14.6 Alaska 11.0 11.1 9.8 8.5 8.8 8.3 8.3 Arizona 14.0 14.5 15.7 17.5 18.1 13.6 13.3 Arkansas 19.8 18.1 17.6 15.8 17.2 15.8 18.0 

California 13.3 15.1 17.5 17.2 16.3 14.0 12.8 

Colorado 12.8 11.6 9.9 9.5 9.3 8.5 9.4 

Connecticut 4.3 8.0 9.7 10.7 9.9 7.6 7.8 

Delaware 8.5 7.3 8.8 9.1 9.5 9.8 8.1 District of Columbia 18.1 20.0 22.6 22.5 22.7 17.3 16.8 Florida 13.5 15.0 16.1 15.1 13.9 12.1 12.1 

Georgia 14.9 16.9 15.1 13.6 14.3 12.6 12.1 Hawaii 11.1 9.9 9.3 10.4 12.3 10.5 10.6 Idaho 13.3 14.6 13.4 12.8 13.2 13.3 11.8 Illinois 13.0 14.2 13.9 12.3 11.1 10.5 11.2 

Indiana 12.3 13.5 12.6 10.3 8.6 8.2 8.7 Iowa 10.0 10.4 10.8 10.8 9.4 7.9 8.3 Kansas 9.7 11.2 13.0 12.3 10.1 10.4 9.4 

Kentucky 17.0 18.6 19.5 16.7 15.5 12.5 13.1 

Louisiana 23.2 22.3 25.5 22.0 18.6 18.6 17.0 

Maine 12.2 13.5 12.8 10.6 10.6 9.8 11.3 Maryland 9.6 10.2 10.7 10.4 8.6 7.3 7.3 Massachusetts 9.3 10.6 10.2 10.3 10.3 10.2 9.6 Michigan 13.2 14.0 14.4 12.5 10.8 10.2 10.3 

Minnesota 11.6 12.6 12.1 10.2 9.9 7.8 6.5 Mississippi 25.0 24.6 23.1 21.3 18.3 15.5 17.6 

Missouri 12.9 14.6 15.8 11.5 10.4 9.7 9.6 Montana 15.5 15.1 13.4 14.6 16.4 16.0 13.7 Nebraska 11.1 10.0 9.9 9.5 10.8 10.6 9.5 Nevada 9.7 11.9 11.9 10.1 9.9 10.0 8.3 

New Hampshire 6.9 7.4 8.8 6.5 8.4 7.4 5.6 
New Jersey 7.9 9.6 10.1 8.7 9.0 8.1 7.8 

New Mexico 21.1 21.4 20.0 24.0 22.4 19.3 17.8 New York 13.4 15.0 16.4 16.7 16.6 14.7 14.0 

North Carolina 12.6 14.4 14.8 13.0 12.5 13.2 13.1 

North Dakota 12.5 13.4 11.2 11.1 13.2 12.7 11.9 

Ohio 11.5 12.4 13.2 12.8 11.6 11.1 10.1 Oklahoma 15.9 17.0 18.5 16.8 14.8 14.1 14.7 

Oregon 10.3 11.3 11.7 11.6 12.8 12.8 11.2 Pennsylvania 10.6 11.2 12.5 12.1 11.3 9.9 9.2 Rhode Island 8.0 10.0 11.3 10.6 11.8 10.0 10.3 South Carolina 16.2 17.2 17.2 15.6 13.3 11.9 13.5 South Dakota 13.6 14.0 14.6 13.6 13.0 9.3 10.2 

Tennessee 17.8 16.5 17.1 15.3 14.5 13.3 14.2 Texas 17.0 17.1 18.3 17.7 16.1 14.9 15.3 Utah 8.7 10.1 9.4 8.0 8.5 8.1 9.3 Vermont 9.0 11.3 9.4 10.2 10.6 10.1 9.9 

Virginia 10.9 10.1 10.0 11.1 11.3 8.1 8.7 Washington 9.1 9.8 11.7 12.0 10.0 9.4 10.8 West Virginia 17.2 19.4 21.0 17.9 17.6 15.8 16.0 Wisconsin 8.5 10.0 10.8 8.8 8.6 8.8 8.6 Wyoming 10.5 10.4 11.0 11.1 12.0 11.0 9.5 

Total 13.1 14.1 14.5 14.0 13.2 11.9 11.7 

Source: U.S. Census Bureau (2003). 
H-16 

DEFINITIONS AND METHODS 

 Analyzing trends in the distribution of family incomes over time requires 

making decisions about a number of variables: How should variation in incomes 

be measured? What is the appropriate timeframe over which to examine 

changes? How should inflation be taken into account? And, finally, what is the 

appropriate measure of income to use? 

Measuring Variation 

 Most of the data in this section are presented for income quintiles, each of 

which represents one-fifth of the income distribution (either families or persons, 

as indicated). Quintiles are calculated by ordering all relevant family units from 

those with the lowest income to those with the highest. For the analysis of 

changes in incomes among different types of families, quintiles are defined 

separately for each family type. 

 The analysis of changes in the distribution of family incomes over time is 

done by examining average incomes, adjusted for inflation, by income quintile 

for specific types of families. 

Timeframe 

 Most of the analysis focuses on data for 4 years: 1973, 1979, 1989, and 

2000. The first 3 years reflect peaks in the business cycle, and allow 

comparisons to be made across time periods in which general economic 

conditions were broadly similar. Information also is presented for 2000, the 

most recent year for which data are available. 

 Income data provided by the Census Bureau to outside researchers are 

frequently limited in certain ways both to protect confidentiality and to reduce 

the impact of reporting and coding errors on statistical calculations. Beginning 

with information for 1995, the Census Bureau substantially increased the 

maximum earnings it reports for individuals on public-use computer files. As a 

result, comparisons of incomes for high-income individuals and families in 

years before and after 1995 may reflect actual differences in their economic 

circumstances, differences in the way their income is coded, or both. 

 To account for this reporting change, income data for 2000 are presented 

here in two ways. First, individuals' earnings for 2000 are limited to (or 

top-coded at) the same inflation-adjusted value they were limited to in 1989 

($99,999 in 1989; $138,870 in 2000.) Second, individuals' earnings in 2000 are 

presented the same way they are reported on the Census Bureau's public-use 

files ($1 million upper limit). 

Adjustment for inflation

 To examine changes in family income over time, the dollar amounts must 

be adjusted for inflation to compare actual buying power. Adjustment for 

inflation is done here using the CPI-U-X1, a revised version of the official 

Consumer Price Index that provides a consistent treatment of the costs of home 
H-17 

ownership over the years examined. The CPI-U-X1 is an index of the cost of a 

market basket of goods and services representing the average consumption of 

the urban population (Table H-7). 

INCOME MEASURE 

 The purpose of examining the distribution of family incomes over time is 

to analyze changes in family economic well-being. Two important issues in 

choosing an appropriate income measure are how to adjust for differences in 

family size and what to include as income. 

 One measure is real family cash income, which is the sum of wage, 

salary, and self-employment earnings, private pension and retirement income, 

interest and dividends, and government cash transfers received by each family 

member. By this measure, which takes inflation into account but not changes in 

family size, noncash transfers, or taxes, the average income of families increased 

throughout the 1973-2000 period (Table H-12, top panel). However, the 

increases were uneven over time and among families with different levels of 

income. Regarding the former, the period from 1973 to 1979 was one of 

relatively slow growth in family income while the period from 1979 to 1989 saw 

more rapid growth. The period from 1989 to 2000 saw growth roughly 

comparable to the prior decade under one measure and more robust growth 

under the income measure that allows more income in the top quintile. It is 

notable that for the 60 percent of American families in the middle- and upperincome quintiles, average income growth over the decade of the 1980s is 

stronger than growth during the preceding period, when a similar method of 

computing income in the upper quintile is used for both periods. Further, 

average income growth during the period 1989-2000 exceeded growth during 

the 1980s across all income quintiles, with the exception of the highest, when 

using this comparable measure. 

 These figures for mean family growth over the three periods mask very 

large differences in the patterns of growth in the five income quintiles. The table 

shows clearly that progress in family income over the 1973-89 period was 

negative for the bottom two income quintiles. This was reversed by modest 

increases in income for these two quintiles from 1989 through 2000. By 

contrast, growth was consistently substantial for the upper two income quintiles, 

especially after 1979. 
TABLE H-11-FAMILY COMPOSITION AND NUMBER OF EARNERS PER FAMILY, SELECTED YEARS 1973

Year Percent change Family group 1973 1979 1989 2000 1973-79 1979-89 1989

Distribution of families by family type (in thousands): 

Families with children 31,098 32,166 34,768 37,823 3.4 8.1 8Married couples with children 24,798 24,166 24,378 25,096 -2.5 0.9 2

Single mothers with children 4,126 5,650 7,123 7,968 36.9 26.1 1Nonelderly childless units1 28,183 35,730 46,467 57,709 26.8 30.1 2

Elderly childless units2 13,884 16,331 20,428 22,384 17.6 25.1 9

Total number of families 73,166 84,229 101,663 117,917 15.1 20.7 1

Distribution of persons by family type (in thousands): 

Families with children 134,248 130,426 135,381 148,866 -2.8 3.8 1Married couples with children 108,976 101,318 99,471 104,705 -7.0 -1.8 5

Single mothers with children 14,240 18,132 21,504 23,808 27.3 18.6 1

Nonelderly childless units1 40,148 60,514 77,025 90,414 20.7 27.3 1

Elderly childless units2 23,129 26,778 33,440 36,519 15.8 24.9 9

Total number of persons 207,525 217,718 245,846 275,799 4.9 12.9 1

Average number of persons per family: 

Under 18 0.94 0.75 0.63 0.61 -20.2 -16.1 -318-64 1.64 1.55 1.50 1.45 -5.5 -3.4 -365 and older 0.30 0.28 0.29 0.28 -6.7 3.9 -3

Total 2.87 2.59 2.42 2.34 -9.8 -6.6 -3

Average number of earners per family: 

Male earners 0.81 0.75 0.69 0.65 -7.4 -8.5 -5Female earners 0.57 0.59 0.58 0.58 3.5 -1.1 0

Total 1.39 1.34 1.27 1.23 -3.6 -5.2 -2

1 Families in which both the head and spouse are under age 65 and there are no children under 18, and unrelated individuals under age 65. 2 Families in which either the head or the spouse is 65 or older and there are no children under 18, and unrelated individuals 65 and older. 

Source: Congressional Budget Office based on data from the March 1974, 1980, 1990, and 2001 Current Population Surveys. 
TABLE H-12 -- ALTERNATIVE MEASURES OF FAMILY INCOME BY INCOME QUINTILE AND CHANG

TIME, SELECTED YEARS 1967-2000 FOR ALL FAMILIES

[In 2000 dollars]

Percent change 

Income measure and quintile 1967 1973 1979 1989 20001 20002 1973-79 1979-89 1989-20001 1

Mean family cash income (family weighted): 

Lowest NA $8,417 $8,324 $8,146 $8,216 $8,216 -1.1 -2.1 0.9 Second NA 21,408 21,256 20,979 21,567 21,567 -0.7 -1.3 2.8 

Middle NA 35,980 35,563 35,861 36,576 36,576 -1.2 0.8 2.0 

Fourth NA 52,696 53,715 56,068 59,657 59,657 1.9 4.4 6.4 Highest NA 92,160 94,752 107,925 118,760 132,487 2.8 13.9 10.0 

Total NA 42,135 42,722 45,797 48,955 51,701 1.4 7.2 6.9 

Mean adjusted family income (person weighted): 3

Lowest 0.69 0.90 0.90 0.86 0.92 0.92 0 -4.3 6.8 Second 1.54 1.94 2.06 2.09 2.22 2.22 6.2 1.3 6.4 Middle 2.26 2.82 3.07 3.27 3.49 3.49 8.9 6.7 6.6 

Fourth 3.16 3.94 4.32 4.77 5.21 5.21 9.6 10.4 9.3 Highest 5.67 6.87 7.39 8.84 9.90 11.20 7.60 19.6 12.0 

Total 2.66 3.29 3.55 3.97 4.35 4.61 7.90 11.7 9.6 

1 Individuals’ earnings in 2000 are limited to $138,870. That topcoded value is equal to the 1989 topcoded value ($99,999) adjusted for inflation2 Individuals’ earnings in 2000 are as reported on Census public-use files (which use a topcoded value of $1 million). 3 Family income divided by the poverty threshold. Thresholds are based on the 1989 distribution of family sizes, with no adjustment for the age 

of the household or the number of children. NA- Not available. Note- Income is pretax income. Source: Congressional Budget Office tabulations of data from the March Current Population Survey, 1968, 1974, 1980, 1990, 2001.
H-20 

 Examining the income data by quintiles also shows why the two measures 

of computing family income for the 1989 through 2000 period yield such 

different estimates of income growth; namely, $45,797 to $48,955 or 6.9 percent 

under one definition versus $45,797 to $51,701 or 12.9 percent under the other. 

Not surprisingly, the decision to allow more income at the top of the distribution 

has an impact only on the top income quintile (see the last two columns of the 

top panel). More specifically, income growth in the top quintile under the more 

restricted income definition is only from $107,925 to $118,760 or 10.0 percent, 

whereas growth under the broader income definition used by the Congressional 

Budget Office starting in 1995 is from $107,925 to $132,487 or 22.8 percent. 

Thus, the difference in the two measures of average family income growth over 

the 1989-2000 period is accounted for entirely by the top quintile. 

 Family cash income has several shortcomings as a measure of change in 

economic well-being. Most notably, it fails to take into account change in family 

size and composition: a family of one with $30,000 in income is treated as being 

as well off as a family of four with $30,000 in income. This assumption is 

inappropriate, however, as a family of four requires more income to attain the 

same standard of living as a single person. 

 An alternative approach to measuring family economic well-being is to 

take advantage of the family size adjustment implicit in the official Federal 

poverty thresholds. This scale assumes, for example, that a family of four needs 

about twice as much income as a single person to attain an equivalent standard 

of living (Table H-13). The equivalence scale implicit in the poverty thresholds 

may not perfectly capture the disparate needs of families of different sizes, but it 

yields a better assessment of relative economic well-being than making no 

adjustment (mean family cash income) or assuming no economies of scale 

(mean family cash income per capita). 

 The AFI measure shown in the second panel of Table H-12 incorporates 

the equivalence scale underlying the poverty thresholds. Each family's pretax 

cash income is divided by its poverty threshold, yielding family income as a 

multiple of poverty. Thus, for example, the average family in the middle quintile 

in 2000 had an income of 3.49 times its poverty threshold.3

 By taking family size into account, the AFI measure greatly reduces the 

income losses in the bottom two quintiles over the 1973-89 period. In fact, it 

completely eliminates income losses in the second quintile. It also increases the 

income gains experienced by the top three income quintiles. The obvious 

conclusion to be drawn from the comparison of the two income definitions is 

that taking family size into account substantially improves the picture of family 

income changes over the years since 1973. However, as Chart H-1 shows, the 

difference in income between the top and bottom quintiles, even under the AFI 

measure, grew substantially throughout the 1973-2000 period. 

 

 

3

 Poverty thresholds for one- and two-person families in this section do not vary by the age of the 

family head. The 1989 weighted averages are adjusted for inflation using the CPI-U-X1. 
H-21 

CHART H-1--RATIO OF AVERAGE ADJUSTED FAMILY INCOME OF 

HIGHEST QUINTILE TO AVERAGE ADJUSTED FAMILY INCOME OF 

LOWEST QUINTILE, 1973-2000 

1

2

7.0

7.5

8.0

8.5

9.0

9.5

10.0

10.5

11.0

11.5

12.0

12.5

13.0

1973 1979 1989 2000

1 Individuals’ earning in 2000 are limited to $138,780. That topcoded value is equal to the 1989 

topcoded value ($99,999) adjusted for inflation. 

2 Individuals’ earnings in 2000 are as reported on Census public-use files (which use a topcode value 

of $1 million). 

Source: Congressional Budget Office. 

INCOME SHARES 

 Another way of tracking income trends is to look at changes in the 

percentage share of income received by families in each quintile. Income shares 

measure whether families have gained or lost in relative terms. That is, a given 

quintile may receive a smaller share of real income even as its average income 

has increased. 

 All three income measures (family cash income, AFI, family income per 

capita) show broadly similar trends in the share of income received by each 

quintile (Table H-14). In general, between 1973 and 2000, the shares of the 

lowest four quintiles fell, and the share of the top quintile rose. The measures 

show somewhat different patterns of shares at any point in time, however. For 

example, in 2000 the top quintile had 48.5 percent of income under the family 

cash income definition, but 45.5 percent under the AFI definition. In that same 

year, the bottom quintile had 3.4 percent under the family cash income 

definition, but 4.2 percent under the AFI definition. Even so, the income shares 

analysis, like the other analyses in this section, generally shows that the top 

quintile had an increasing percentage of the income pie over the period 1973-

2000.
H-22 

TABLE H-13 -- POVERTY THRESHOLDS AND EQUIVALENCE 

VALUES FOR DIFFERENT FAMILY SIZES, 2000 

Family size 

(persons) 

Official Poverty 

 Threshold 

Adjusted Poverty 

Threshold 

Equivalence 

Value1

1 $8,794 $8,064 1.0 

2 11,239 10,319 1.3 

3 13,738 12,631 1.6 

4 17,603 16,196 2.0 

5 20,819 19,154 2.4 

6 23,528 21,621 2.7 

7 26,754 24,485 3.0 

8 29,701 27,252 3.4 

9 or more 36,060 32,557 4.1 

1 Equivalence value is calculated on the official poverty thresholds. Values would be slightly 

different using the adjusted poverty threshold because of different numbers of children in a family 

of a given size. 

Note- Poverty thresholds shown for one- and two-person families are a weighted average of the 

separate official thresholds for elderly and nonelderly individuals and families. Adjusted 

thresholds are computed using the CPI-U-X1 to adjust for inflation. The official poverty 

threshold is adjusted for inflation using the Consumer Price Index (CPI). 

Source: Congressional Budget Office. 

TABLE H-14 -- SHARES OF FAMILY INCOME BY INCOME QUINTILE 

FOR ALL FAMILIES, SELECTED YEARS 1967-2000 

 [In Percent] 

Income measure 

and quintile 1967 1973 1979 1989 20001

 20002

Family cash income (family weighted): 

Lowest NA 4.0 3.9 3.6 3.4 3.2 

Second NA 10.2 10.0 9.2 8.8 8.3 

Middle NA 17.1 16.6 15.7 14.9 14.1 

Fourth NA 25.0 25.1 24.5 24.4 23.1 

Highest NA 43.7 44.4 47.1 48.5 51.3 

Adjusted family income (person weighted):3 

Lowest 5.2 5.5 5.1 4.3 4.2 4.0 

Second 11.6 11.8 11.6 10.5 10.2 9.6 

Middle 16.9 17.1 17.3 16.5 16.1 15.1 

Fourth 23.7 23.9 24.3 24.0 24.0 22.6 

Highest 42.6 41.7 41.7 44.6 45.5 48.6 1

 Individuals’ earnings in 2000 are limited to $138,870. That topcoded value is equal to the 1989 

topcoded value ($99,999) adjusted for inflation. 

2

 Individuals’ earnings in 2000 are as reported on Census public-use files (which use a topcoded 

value of $1 million). 

3 Family income divided by the poverty threshold. Thresholds are based on the 1989 distribution of 

family sizes, with no adjustment for the age of the head of the household or the number of children. 

Source: Congressional Budget Office tabulations of data from the March Current Population 

Survey, 1968, 1974, 1980, 1990, 2001. 
H-23 

TRENDS IN PRETAX CASH INCOMES BY TYPE OF FAMILY 

 As we have seen (Table H-11), the composition of the typical family has 

changed over time. Compared with 1973 and 1979, there were fewer persons in 

each family in 2000, on average, and married couples with children made up a 

smaller fraction of all families (Table H-15). Additional insights can therefore 

be gained by looking at changes in incomes for specific family types. This 

analysis distinguishes six types of family units: 

1. Married couples with children, which are families composed of a married 

couple living only with their own or related children, at least one of 

whom is under age 18; 

2. Single mothers with children, which are families composed of unmarried, 

divorced, separated, or widowed mothers living only with their own or 

related children, at least one of whom is under age 18; 

3.Non-elderly childless families, which are families composed of two or 

more related people living together, in which the family head and the 

spouse of the head are both under age 65 and there are no children under 

age 18; 

4.Non-elderly unrelated individuals, which are people over age 17 and 

under age 65 who are not living with relatives; 

5.Elderly childless families, which are families composed of two or more 

related people living together, in which either the family head or the 

spouse of the head is 65 or older and there are no children under age 18; 

and 

6.Elderly unrelated individuals, which are people 65 or older who are not 

living with relatives. 

TABLE H-15--AVERAGE FAMILY SIZE AND NUMBER OF 

FAMILIES1

 BY FAMILY TYPE, WEIGHTED BY FAMILIES, 

SELECTED YEARS 1973-2000 

Family type 

and year 

Persons 

per family 

Number of families 

(thousands) 

Percent 

of families 

All families:1

1973 2.87 73,166 100.0 

1979 2.59 84,229 100.0 

1989 2.42 101,663 100.0 

2000 2.34 117,917 100.0 

All families with children: 

1973 4.35 31,098 42.5 

1979 4.09 32,166 38.2 

1989 3.89 34,768 34.2 

2000 3.94 37,823 32.1 

Married couples with children: 

1973 4.42 24,798 33.9 

1979 4.23 24,166 28.7 

1989 4.08 24,378 24.0 

2000 4.17 25,096 21.3 
H-24 

TABLE H-15--AVERAGE FAMILY SIZE AND NUMBER OF 

FAMILIES, 1 BY FAMILY TYPE, WEIGHTED BY FAMILIES, 

SELECTED YEARS 1973-2000-continued

Family type 

and year 

Persons 

per family 

Number of families 

(thousands) 

Percent 

of families 

Single mothers with children: 

1973 3.50 4,126 5.6 

1979 3.24 5,650 6.7 

1989 3.02 7,123 7.0 

2000 2.99 7,968 6.8 

Nonelderly childless units: 

1973 1.76 28,183 38.5 

1979 1.68 35,730 42.4 

1989 1.66 46,467 45.7 

2000 1.57 57,710 48.9 

Nonelderly childless families: 

1973 2.32 16,363 22.4 

1979 2.35 17,931 21.3 

1989 2.44 21,257 20.9 

2000 2.40 23,354 19.8 

Nonelderly unrelated individuals: 

1973 1.00 11,820 16.2 

1979 1.00 17,799 21.1 

1989 1.00 25,210 24.8 

2000 1.00 34,355 29.1 

Elderly childless units: 

1973 1.64 13,884 19.0 

1979 1.62 16,331 19.4 

1989 1.64 20,428 20.1 

2000 1.63 22,384 19.0 

Elderly childless families: 

1973 2.17 7,590 10.4 

1979 2.16 8,676 10.3 

1989 2.23 10,600 10.4 

2000 2.40 11,733 10.0 

Elderly unrelated individuals: 

1973 1.00 6,294 8.6 

1979 1.00 7,655 9.1 

1989 1.00 9,828 9.7 

2000 1.00 10,651 9.0 1

 Corresponds more closely to Census definition of household. Includes families of one person. 

Source: Congressional Budget Office tabulations of data from the March Current Population 

Survey, 1974, 1980, 1990, and 2001. 

In addition, results also are presented for four aggregates: 

1.All families with children, which comprises married couples, single 

mothers, and other families with children; 

2.Nonelderly childless units, which comprises nonelderly childless 

families and non-elderly unrelated individuals; 

3.Elderly childless units, which comprises elderly childless families and 

elderly unrelated individuals; and 

4.All families, which comprises all families and unrelated individuals 

(i.e., the noninstitutional U.S. population). 
H-25 

 Unless otherwise noted, the analysis of changes in income for each family 

type listed above is based on quintiles computed for that family type. This 

procedure permits comparisons within, but not across, family types; the quintile 

in which a particular family is found says nothing about its place among all 

families, but measures its position in relation to families of the same type. For 

example, individuals in the middle quintile of single mothers with children may 

be in the lowest quintile of the all-families grouping. 

 Comparisons over time show how the incomes of families of a given type 

compare with similar families at another time, not how incomes have changed 

for a particular type of family. Families may move among income quintiles as 

their incomes—or the incomes of other families—rise or fall; they also may 

change types as their members grow older, have children, marry, or divorce. In 

addition, the average number of members and earners within a given type of 

family may change over time, as may the characteristics of those persons. 

PRETAX ADJUSTED FAMILY INCOME 

 Trends in incomes for different family types show more variation than 

trends for families overall. Between 1973 and 1979, adjusted family income 

(AFI) grew 12.2 percent, on average, for all families with children (Table H-16). 

This compares with an income gain of only 7.9 percent for all families. For 

families with children, average AFI fell 4.5 percent during this period for the 

lowest quintile, from 88 percent of poverty to 84 percent of poverty. For the 

highest quintile, average AFI rose 7.3 percent, compared with 7.6 percent for all 

families. During the 1979-89 period, the bottom two quintiles of families with 

children experienced reduced income, by 11.7 percent and 4.1 percent 

respectively for the lowest and second quintiles; meanwhile, the highest quintile 

had an income increase of 17.0 percent. These losses at the bottom were greater 

for families with children than for all families. 

 Most of the divergence in incomes among families with children reflects 

compositional change, as families of single mothers with children became 

increasingly common (Table H-11). The lowest quintile of married couples with 

children had a 3.0-percent decline in average AFI between 1979 and 1989; the 

lowest quintile of single mothers with children fared much worse, with a 

22.0-percent decline during the same period. These two family types as a whole, 

however, showed income gains over the period: 11.2 percent for married 

couples with children and 3.3 percent for single mothers with children. More 

recently, during the 1989-2000 period, all quintiles of both family types have 

experienced rising incomes. Single mothers in the bottom experienced the 

greatest increases in income, far exceeding increases among married families 

with children during this period. These developments in the bottom quintiles are 

almost certainly due to increased work by poor and low-income mothers in 

general and by mothers leaving welfare in particular (see Appendix L). 
TABLE H-16 -- AVERAGE PRETAX ADJUSTED FAMILY INCOME (INCOME AS A MULTIPLE OF POVE

BY FAMILY TYPE AND INCOME QUINTILE, WEIGHTED BY PERSONS, 

SELECTED YEARS 1967-2000 

Year Percent Change Family type and quintile 1967 1973 1979 1989 20001 20002 1973-1979 1979-1989 1989-20001 1989

All families: 

Lowest 0.69 0.90 0.90 0.85 0.92 0.92 0.00 -4.30 6.80 6Second 1.54 1.94 2.06 2.09 2.22 2.22 6.20 1.30 6.40 6Middle 2.26 2.82 3.07 3.27 3.49 3.49 8.90 6.70 6.60 6

Fourth 3.16 3.94 4.32 4.77 5.21 5.21 9.60 10.40 9.30 9Highest 5.67 6.87 7.39 8.84 9.90 11.20 7.60 19.60 12.00 2

Total 2.66 3.29 3.55 3.97 4.35 4.61 7.90 11.70 9.60 1

All families with children: 

Lowest 0.74 0.88 0.84 0.74 0.84 0.84 -4.50 -11.70 13.30 1Second 1.54 1.88 1.95 1.87 2.04 2.04 3.70 -4.10 9.10 9Middle 2.13 2.65 2.84 2.93 3.20 3.20 7.20 3.30 9.10 9

Fourth 2.84 3.54 3.85 4.14 4.69 4.69 8.80 7.50 13.30 1

Highest 4.77 5.73 6.15 7.20 8.60 10.07 7.30 17.00 19.50 3

Total 2.40 2.94 3.30 3.38 3.87 4.17 12.20 2.30 14.70 2

Married couples with children: 

Lowest 0.89 1.16 1.18 1.14 1.24 1.24 1.70 -3.00 8.30 8Second 1.66 2.12 2.29 2.34 2.57 2.57 8.00 2.00 10.00 1Middle 2.23 0.84 3.12 3.34 3.77 3.77 9.90 7.10 12.80 1

Fourth 2.93 3.71 4.11 4.52 5.27 5.27 10.80 10.10 16.50 1

Highest 4.88 5.94 6.41 7.67 9.19 11.25 7.90 19.70 19.80 4

Total 2.52 3.15 3.42 3.80 4.41 4.82 8.60 11.20 15.90 2

Single mothers with children: 

Lowest 0.21 0.33 0.32 0.25 0.31 0.31 -3.00 -22.00 24.20 2Second 0.59 0.71 0.75 0.64 0.89 0.89 5.60 -14.00 38.00 3Middle 0.91 1.03 1.22 1.14 1.48 1.48 18.40 -6.10 29.30 2

Fourth 1.45 1.67 2.01 2.03 2.37 2.37 20.40 0.90 16.90 1

Highest 2.78 3.29 3.65 4.14 4.84 4.97 10.90 13.60 16.70 1

Total 1.19 1.41 1.59 1.64 1.98 2.00 12.80 3.30 20.40 2
Nonelderly childless units: 

Lowest 0.80 1.22 1.24 1.19 1.06 1.06 1.60 -3.70 -11.30 -1

Second 2.19 2.81 2.91 2.94 2.88 2.88 3.60 1.00 -2.00 -2Middle 3.28 4.09 4.27 4.45 4.48 4.48 4.40 4.30 0.60 0

Fourth 4.47 5.49 5.78 6.29 6.54 6.54 5.30 8.80 4.00 4

Highest 7.42 8.95 9.35 10.94 11.91 13.28 4.50 17.00 8.80 2

Total 3.63 4.51 4.71 5.16 5.37 5.65 4.40 9.60 4.10 9

Nonelderly childless families: 

Lowest 1.03 1.74 1.85 1.80 1.85 1.85 6.30 -2.80 2.90 2Second 2.47 3.31 3.59 3.68 3.84 3.84 8.50 2.40 4.40 4Middle 3.52 4.53 4.89 5.20 5.48 5.48 7.90 6.40 5.30 5

Fourth 4.70 5.88 6.33 7.03 7.57 7.57 7.70 11.10 7.70 7Highest 7.65 9.33 9.94 11.72 12.97 14.73 6.50 17.90 10.60 2

Total 3.87 4.96 5.32 5.89 6.34 6.69 7.30 10.70 7.70 1

Nonelderly unrelated individuals: 

Lowest 0.32 0.51 0.61 0.61 0.57 0.57 19.60 -0.30 -6.20 -6

Second 1.14 1.49 1.72 1.83 1.88 1.88 15.40 6.60 2.60 2Middle 2.12 2.53 2.78 3.00 3.09 3.09 9.90 7.90 3.00 3Fourth 3.23 3.82 4.03 4.46 4.60 4.60 5.50 10.70 3.10 3

Highest 5.88 7.00 7.11 8.48 9.11 9.76 1.60 19.30 7.40 1

Total 2.54 3.07 3.25 3.68 3.85 3.98 5.90 13.10 4.70 8

Elderly childless units: 

Lowest 0.48 0.76 0.84 0.95 0.97 0.97 10.50 13.40 1.80 1

Second 0.95 1.34 1.50 1.73 1.82 1.82 11.90 15.20 5.30 5Middle 1.48 1.97 2.26 2.64 2.74 2.74 14.70 16.70 3.90 3

Fourth 2.40 3.02 3.38 4.02 4.10 4.10 11.90 19.00 1.90 1

Highest 5.32 6.54 6.85 8.63 9.43 9.73 4.70 26.00 9.20 1

Total 2.13 2.73 2.97 3.59 3.81 3.87 8.80 21.00 6.00 7

Elderly childless families: 

Lowest 0.60 0.96 1.06 1.20 1.26 1.26 10.40 13.10 5.10 5

Second 1.16 1.63 1.86 2.15 2.27 2.27 14.10 15.40 5.70 5Middle 1.77 2.34 2.67 3.14 3.23 3.23 14.10 17.50 3.00 3

Fourth 2.76 3.50 3.83 4.61 4.71 4.71 9.40 20.50 2.10 2
TABLE H-16 -- AVERAGE PRETAX ADJUSTED FAMILY INCOME (INCOME AS A MULTIPLE OF 

POVERTY) BY FAMILY TYPE AND INCOME QUINTILE, WEIGHTED BY PERSONS, 

SELECTED YEARS 1967-2000-continued 

 Year Percent Change Family type and quintile 1967 1973 1979 1989 20001 20002 1973-1979 1979-1989 1989-20001 1989

Highest 5.73 7.12 7.37 9.54 10.15 10.53 3.50 29.50 6.40 1

Total 2.40 3.11 3.36 4.13 4.32 4.40 8.00 22.90 4.70 6

Elderly unrelated individuals: 

Lowest 0.35 0.54 0.64 0.73 0.71 0.71 18.50 13.80 -2.50 -2

Second 0.63 0.93 1.01 1.17 1.21 1.21 9.70 15.10 3.00 3Middle 0.86 1.23 1.37 1.62 1.70 1.70 11.40 18.60 4.70 4

Fourth 1.29 1.73 2.05 2.46 2.58 2.58 18.50 20.30 4.60 4

Highest 3.44 4.08 4.83 5.58 6.43 6.53 18.40 15.50 15.30 1

Total 1.31 1.70 1.98 2.31 2.53 2.55 16.50 16.90 9.20 1

1 Individual's earnings in 2000 are limited to $138,870. That topcoded value is equal to the 1989 topcoded value ($99,999) adjusted for inflation2 Individual's earnings in 2000 are as reported on Census public-use files (which use a topcode value of $1 million). 

Note- Poverty thresholds are based on the 1989 distribution of family sizes, with no adjustment for the age of the head of household or the numb

children. Quintiles are based on the number of persons. Source: Congressional Budget Office tabulations of data from the March Current Population Survey, 1968, 1974, 1980, 1990, 2001.
H-29 

 Elderly persons experienced income gains across the board between 1973 

and 2000. For elderly childless units, which include both single persons and 

married couples, average AFI rose 10.5, 13.4, and 1.8 percent respectively for 

the lowest quintile across the three periods shown in the last panel of table H-16 

and 4.7, 26.0, and 12.7 percent respectively over the same periods for the 

highest quintile (using the new method of income coding). Despite their gains, 

the elderly generally had much lower incomes than the non-elderly. In 2000, for 

example, the average income of elderly childless units was about 3.9 times 

poverty; the average income of non-elderly childless units, by comparison, was 

about 5.6 times poverty (not shown in table). 

AVERAGE FAMILY CASH INCOME BY FAMILY TYPE 

 For all families, average cash income grew more slowly than average 

pretax AFI between 1973 and 2000. This was also generally true for specific 

family types. At the same time, those groups of families whose average cash 

incomes declined had more pronounced decreases than occurred in pretax AFI. 

 Average family cash income grew throughout the 1973-2000 period for 

families with children (Table H-17, second panel). However, families at the 

bottom of the income distribution lost ground during the 1973-89 period, with 

income declines of 11.0 percent during the 1973-79 period and 17.7 percent 

during the 1979-89 period. The decline stopped between 1989 and 2000 when 

the income of families with children in the bottom quintile increased at a faster 

pace than all quintiles except for the highest. As was the case with all the 

measures we have examined, average family cash income of families in the top 

two quintiles improved substantially throughout the entire period after 1973. 

 As compared with the cash family income losses in the bottom quintile 

for all families, the pattern of losses in the bottom quintile was even greater for 

single mothers with children before 1989 (Table H-17, fourth panel). From 1979 

to 1989, for example, these mothers lost almost a quarter of their income. 

However, between 1989 and 2000 this group made up for at least some of the 

lost ground as their income increased by 28.0 percent. During this period, which 

included strengthened efforts to encourage and support low-income parents, 

many of them single mothers, in work, income gains by single mothers with 

children in the lowest, second, and middle quintiles far exceeded gains at the top 

of the income spectrum for this group. It is also interesting that during both the 

1973-79 and the 1989-2000 periods, income gains in the second, third, and 

fourth income quintiles of single mothers with children were usually greater 

than income gains in the top quintile. 

 Because the change in family size among elderly persons was almost 

negligible over the period, their trend in average family cash incomes is almost 

identical to the trend in average pretax AFI. Elderly childless units and elderly 

childless families experienced income gains in every quintile during every 

period between 1973 and 2000. 
TABLE H-17--AVERAGE FAMILY CASH INCOME BY FAMILY TYPE AND INCOME QUINTILE, 

SELECTED YEARS 1973-2000 

Family type and Year Percent change

income quintile 1973 1979 1989 20001 20002 1973-79 1979-89 1989-20001 1989

All families: 

Lowest $8,417 $8,324 $8,146 $8,216 $8,216 -1.1 -2.1 0.9 Second 21,408 21,256 20,981 21,567 21,567 -0.7 -1.3 2.8 Middle 35,980 35,563 35,863 36,576 36,576 -1.2 0.8 2.0 Fourth 52,696 53,715 56,071 59,657 59,657 1.9 4.4 6.4 Highest 92,160 94,752 107,929 118,760 132,487 2.8 13.9 10.0 2

Total 42,132 42,722 45,798 48,955 51,701 1.4 7.2 6.9 1

All families with children: 

Lowest 14,622 13,011 10,714 12,390 12,390 -11.0 -17.7 15.6 1

Second 32,185 31,058 28,700 31,058 31,058 -3.5 -7.6 8.2 Middle 45,294 46,268 45,927 50,298 50,298 2.1 -0.7 9.5 

Fourth 60,306 62,409 65,581 74,045 74,045 3.5 5.1 12.9 1Highest 97,793 101,336 113,842 134,145 157,981 3.6 12.3 17.8 3

Total 50,040 50,816 52,953 60,387 65,154 1.6 4.2 14.0 2

Married couples with 

Lowest 21,456 21,036 20,287 22,660 22,660 -2.0 -3.6 11.7 1Second 37,731 39,292 39,807 44,419 44,419 4.1 1.3 11.6 1Middle 49,317 52,345 55,115 63,261 63,261 6.1 5.3 14.8 1Fourth 63,579 67,514 73,756 86,465 86,465 6.2 9.2 17.2 1Highest 101,156 106,302 122,446 147,093 180,788 5.1 15.2 20.1 4

Total 54,648 57,298 62,282 72,780 79,519 4.8 8.7 16.9 2

Single mothers with children: 

Lowest 4,867 4,636 3,562 4,559 4,559 -4.8 -23.2 28.0 2Second 11,014 11,279 9,362 12,776 12,776 2.4 -17.0 36.5 3

Middle 16,556 18,242 16,405 20,036 20,036 10.2 -10.1 22.1 2Fourth 24,812 27,641 27,005 30,840 30,840 11.4 -2.3 14.2 1

Highest 46,425 49,596 53,353 61,878 63,584 6.8 7.6 16.0 1

Total 20,735 22,279 21,938 26,018 26,359 7.4 -1.5 18.6 2
Nonelderly childless units: 

Lowest 8,067 8,142 7,954 7,064 7,064 0.9 -2.3 -11.2 -11Second 22,061 21,953 22,001 21,330 21,330 -0.5 0.2 -3.0 -3.Middle 35,498 35,269 36,323 35,744 35,744 -0.6 3.0 -1.6 -1.

Fourth 52,313 53,072 56,315 57,457 57,457 1.5 6.1 2.0 2.0 Highest 93,232 96,018 110,479 114,951 126,358 3.0 15.1 4.0 14.

Total 42,234 42,891 46,614 47,309 49,591 1.6 8.7 1.5 6.4

Nonelderly childless families: 

Lowest 18,114 19,277 19,045 19,704 19,704 6.4 -1.2 3.5 3.5 

Second 35,207 38,569 40,113 42,244 42,244 9.5 4.0 5.3 5.3 

Middle 48,960 53,603 57,942 61,720 61,720 9.5 8.1 6.5 6.5 Fourth 65,546 70,905 80,159 86,298 86,298 8.2 13.1 7.7 7.7 

Highest 106,746 115,299 136,687 147,465 167,956 8.0 18.6 7.9 22.

Total 54,915 59,530 66,789 71,486 75,584 8.4 12.2 7.0 13.

Nonelderly unrelated individuals: 

Lowest 4,094 4,866 4,892 4,584 4,584 18.9 0.5 -6.3 -6.Second 11,971 13,827 14,751 15,148 15,148 15.5 6.7 2.7 2.7 

Middle 20,314 22,310 24,150 24,903 24,903 9.8 8.2 3.1 3.

Fourth 30,697 32,399 35,902 37,078 37,078 5.5 10.0 3.3 3.Highest 56,319 57,236 68,312 73,486 78,723 1.6 19.4 7.6 15

Total 24,679 26,127 29,601 31,040 32,087 5.9 13.3 4.9 8.4

Elderly childless units: 

Lowest 5,760 6,433 7,254 7,349 7,349 11.7 12.8 1.3 1.

Second 10,493 11,619 13,426 14,213 14,213 10.7 15.5 5.9 5.Middle 16,148 18,505 21,454 22,746 22,746 14.6 15.9 6.0 6.0 Fourth 25,797 29,443 34,759 36,186 36,186 14.1 18.1 4.1 4.

Highest 62,875 66,071 82,007 88,687 91,301 5.1 24.1 8.1 11

Total 24,215 26,414 31,780 33,836 34,359 9.1 20.3 6.5 8.

Elderly childless families: 

Lowest 9,836 10,921 12,421 13,101 13,101 11.0 13.7 5.5 5.

Second 16,767 19,221 22,185 23,518 23,518 14.6 15.4 6.0 6.Middle 23,886 27,427 32,487 33,586 33,586 14.8 18.4 3.4 3.4 Fourth 36,279 40,118 48,451 49,953 49,953 10.6 20.8 3.1 3.
TABLE H-17 AVERAGE FAMILY CASH INCOME BY FAMILY TYPE AND INCOME QUINTILE, 

SELECTED YEARS 1973-2000

Family type and Year Percent Change

income quintile 1973 1979 1989 20001 20002 1973-79 1979-89 1989-20001 1989-2

 Highest 77,957 80,494 104,329 110,059 114,323 3.3 29.6 5.5 9.

 Total 32,945 35,636 43,975 46,043 46,896 8.2 23.4 4.7 6.

Elderly unrelated individuals: 

Lowest 4,316 5,162 5,863 5,706 5,706 19.6 13.6 -2.7 -2.Second 7,489 8,238 9,653 9,792 9,792 10.0 14.8 3.6 3.Middle 9,879 11,058 13,077 13,737 13,737 11.9 18.3 5.0 5.Fourth 13,951 16,499 19,846 20,790 20,790 18.3 20.3 4.8 4.

Highest 32,810 38,862 44,912 51,883 51,883 18.4 15.6 15.5 17

Total 13,689 15,964 18,630 20,382 20,382 16.6 16.7 9.4 10

1 Individuals earnings in 2000 are limited to $138,870. That topcoded value is equal to the 1989 topcoded value ($99,999) adjusted for inflation. 2 Individuals earnings in 2000 are as reported on Census public-use files (which use a topcoded value of $1 million). 

Note- Quintiles are based on the number of families. Source: Congressional Budget Office tabulations of data from the March Current Population Survey, 1974, 1980, 1990, 2001. 
TABLE H-18 -- FAMILY CASH INCOME LIMITS1 BY QUINTILE AND FAMILY TYPE, 

SELECTED YEARS 1973-2000 

 [In 2000 Dollars]

Percent Change Family type 1973 1979 1989 2000 1973-79 1979-89 198

All families: 

Lowest 14,666 14,726 14,515 15,000 0.4 -1.4 

Second 28,600 27,912 27,781 28,300 -2.4 -0.5 Middle 43,800 43,993 44,508 46,235 0.4 1.2 Fourth 63,546 65,201 69,878 75,732 2.6 7.2 

All families with children: 

Lowest 24,688 23,259 20,097 22,000 -5.8 -13.6 

Second 38,952 38,971 37,417 40,000 0.0 -4.0 

Middle 51,872 53,581 54,715 60,977 3.3 2.1 Fourth 70,470 72,749 78,344 90,647 3.2 -13.6 

Married couples with children: 

Lowest 31,393 31,865 31,493 35,000 1.5 -1.2 

Second 43,800 46,147 47,369 53,793 5.4 2.6 Middle 55,457 58,812 63,220 73,000 6.0 7.5 Fourth 73,514 77,919 86,378 103,430 6.0 10.9 

Single mothers with children: 

Lowest 8,541 8,443 6,624 9,060 -1.1 -21.5 

Second 13,761 14,430 12,498 16,280 -2.9 -13.4 

Middle 20,075 22,660 20,831 24,832 12.9 -8.1 

Fourth 30,459 33,726 34,627 38,700 10.7 2.7 

Nonelderly childless units: 

Lowest 15,330 15,584 15,349 14,500 1.7 -1.5 

Second 28,798 27,964 28,539 28,000 -2.9 2.1 

Middle 43,303 43,065 44,578 44,904 -0.5 3.5 Fourth 63,856 65,146 70,381 73,540 2.0 8.0 

Nonelderly childless families: 

Lowest 28,064 30,632 31,246 32,126 9.1 2.0 
TABLE H-18 -- FAMILY CASH INCOME LIMITS1 BY QUINTILE AND FAMILY TYPE, 

SELECTED YEARS 1973-2000-continued 

 [In 2000 Dollars] 

Percent Change Family type 1973 1979 1989 2000 1973-79 1979-89 198

Second 42,018 46,351 48,619 51,757 10.3 4.9 Middle 56,472 61,405 67,908 72,084 8.7 10.6 Fourth 76,648 82,820 95,459 103,104 8.1 15.3 

Nonelderly unrelated individuals: 

Lowest 7,884 9,418 9,999 10,000 19.5 6.2 Second 16,133 18,142 19,442 20,000 12.5 7.2 Middle 25,530 26,781 29,191 30,000 4.9 9.0 Fourth 36,927 39,425 43,932 46,067 6.8 11.4 

Elderly childless units: 

Lowest 8,428 9,136 10,368 10,818 8.4 13.5 Second 12,957 14,668 16,963 18,036 13.2 15.7 Middle 19,761 22,876 26,731 28,169 15.8 16.9 Fourth 33,944 37,837 44,954 47,564 11.5 18.8 

Elderly childless families: 

Lowest 13,841 15,670 17,730 18,741 13.2 13.1 

Second 19,860 23,053 27,016 28,292 16.1 17.2 

Middle 28,762 32,144 38,884 40,102 11.8 21.0 Fourth 46,318 50,566 60,270 63,274 9.2 19.2 

Elderly unrelated individuals: 

Lowest 6,183 6,945 7,899 8,146 12.3 13.7 Second 8,713 9,527 10,976 11,346 9.3 15.2 Middle 11,289 13,183 15,787 16,411 16.8 19.8 Fourth 17,345 20,933 25,081 26,277 20.7 19.8 

1 Income cutoff between quintiles. Source: Congressional Budget Office tabulations of data from the March Population Survey, 1974, 1980, 1990, and 2001. 
H-35 

 Table H-18 shows family cash income limits (the income cutoffs between 

quintiles) by quintile and family type. Between 1973 and 1989, income limits 

among families with children declined or grew slowly while those for the elderly 

increased, in some cases significantly. This pattern reversed itself in the 1989-

2000 period, as income limits for families with children grew at roughly twice 

the pace as among elderly childless units. In general during the 1973-2000 

period, income limits among the higher quintiles increased more than among the 

lower quintiles. In fact, income limits for the lower quintiles have decreased for 

several family types during several periods. A notable exception involves the 

limits among single mothers with children. Following declines in the 1979-1989 

period, income limits for this group rose sharply in the 1990s, with especially 

steep increases at the bottom of the income ladder. For example, the 

36.8 percent increase noted for the lowest quintile of single mothers with 

children was the greatest for any group during any period from 1973-2000. 

ANTIPOVERTY EFFECTIVENESS OF VARIOUS CASH AND 

NONCASH TRANSFERS 

 Tables H-19 through H-21 provide estimates of the number and 

percentage of individuals removed from poverty by market income and by social 

insurance programs (Social Security, unemployment compensation, and 

workers' compensation), means-tested cash programs (Aid to Families with 

Dependent Children, Supplemental Security Income, and general assistance), 

means-tested noncash programs (food stamps, housing benefits, and school 

lunch), and Federal payroll and income taxes and the earned income credit 

(EIC). Tables are provided separately for elderly persons, for children, and for 

persons in units with an unmarried head and children under age 18, for selected 

years between 1979 and 2002. 

 The tables present alternative measures of poverty to the official measure. 

They include counts of the number of people below the poverty line before any 

government benefits are taken into account, after each type of benefit is added to 

income, and after the government cash and noncash benefits and Federal taxes 

and the EIC are added to (or subtracted from) income. 

 The tables also measure the effect of these government programs on the 

“poverty gap” - the gap between a poor family's income and the poverty line. 

The poverty gap represents the degree of poverty by showing the amount of 

money that would be needed to lift every poor person exactly to the poverty line. 
TABLE H-19 -- ANTIPOVERTY EFFECTIVENESS OF CASH AND NON-CASH TRANSFERS (INCLUDING 

FEDERAL INCOME AND PAYROLL TAXES) FOR ALL PERSONS AGE 65 AND OLDER, 

SELECTED YEARS 1979-2002 

Number of elderly and poverty measure 1979 1983 1989 1993 1996 1999 200

Total population (in thousands): 24,194 26,313 29,094 30,779 31,877 32,621 34,23Number of poor persons (thousands): 

Cash income before transfers 13,120 13,253 13,853 15,640 15,977 15,568 17,08Plus social insurance 4,202 4,095 3,934 4,270 3,905 3,592 3,94Plus means-tested cash transfers 3,682 3,625 3,312 3,755 3,428 3,167 3,57Plus means-tested noncash benefits 3,261 3,158 2,793 3,123 2,936 2,729 3,06Plus EITC and less Federal payroll and income taxes 3,276 3,177 2,841 3,159 2,943 2,737 3,07

Number of persons (in thousands) removed from poverty due to: 

Social insurance 8,918 9,158 9,919 11,370 12,072 11,976 13,13Means-tested cash 520 470 622 515 477 425 373 Means-tested noncash benefits 421 467 519 632 492 438 508 EITC and Federal payroll and income taxes -15 -19 -48 -36 -7 -8 -10 

Total number removed from poverty 9,844 10,076 11,012 12,481 13,034 12,831 14,00

Percent of persons removed from poverty due to: 

Social insurance 68.0 69.1 71.6 72.7 75.6 76.9 76.9 Means-tested cash 4.0 3.5 4.5 3.3 3.0 2.7 2.2 Means-tested noncash benefits 3.2 3.5 3.7 4.0 3.1 2.8 3.0 EITC and Federal payroll and income taxes -0.1 -0.1 -0.3 -0.2 0.0 -0.1 -0.1 

Total percent removed from poverty 75 76 80 80 82 82 82 

Poverty rate (in percent): 

Cash income before transfers 54.2 50.4 47.6 50.8 50.1 47.7 49.9 Plus social insurance 17.4 15.6 13.5 13.9 12.3 11.0 11.5 Plus means-tested cash transfers 15.2 13.8 11.4 12.2 10.8 9.7 10.4 Plus means-tested noncash benefits 13.5 12.0 9.6 10.1 9.2 8.4 9.0 Plus EITC and less Federal payroll and income taxes 13.5 12.1 9.8 10.3 9.2 8.4 9.0 

Total reduction in poverty rate 40.7 38.3 37.8 40.6 40.9 39.3 40.9 

Poverty gap (billions of 2002 dollars): 
Cash income before transfers 65.2 66.7 69.4 77.9 82.2 79.4 89.7 

Plus social insurance 11.4 11.1 10.5 11.9 11.4 10.2 11.Plus means-tested cash transfers 7.7 7.3 7.0 8.8 7.9 7.5 8.1 Plus means-tested noncash benefits 6.4 6.3 5.7 7.4 6.9 6.5 7.0 Plus EITC and less Federal payroll and income taxes 6.4 6.3 5.7 7.4 6.9 6.5 7.0 

Poverty gap per poor person (in 2002 dollars): 

Cash income before transfers 4,967 5,030 5,006 4,983 5,145 5,099 5,25Plus social insurance 2,713 2,704 2,673 2,790 2,907 2,850 2,82Plus means-tested cash transfers 2,086 2,015 2,103 2,344 2,308 2,366 2,26Plus means-tested noncash benefits 1,976 1,990 2,036 2,372 2,343 2,378 2,28Plus EITC and less Federal payroll and income taxes 1,967 1,990 2,014 2,353 2,338 2,380 2,28

Reduction in poverty gap (in billions) due to: 

Social insurance 53.8 55.6 58.8 66.0 70.9 69.1 78.5 Means-tested cash 3.7 3.8 3.6 3.1 3.4 2.7 3.1 Means-tested noncash benefits 1.2 1.0 1.3 1.4 1.0 1.0 1.1 EITC and Federal payroll and income taxes 0.0 0.0 0.0 0.0 0.0 0.0 0.0 

Total reduction in poverty gap (in billions) 58.7 60.3 63.6 70.5 75.3 72.9 82.6 

Percent reduction in the poverty gap due to: 

Social insurance 82.5 83.4 84.8 84.7 86.2 87.1 87.6 Means-tested cash 5.7 5.7 5.1 4.0 4.2 3.5 3.4 Means-tested noncash benefits 1.9 1.5 1.8 1.8 1.3 1.3 1.2 EITC and Federal payroll and income taxes 0.0 -0.1 -0.1 0.0 0.0 0.0 0.0 

Total percent reduction in the poverty gap 90.1 90.5 91.7 90.5 91.6 91.8 92.2 

Note - Poverty gap dollars for each year adjusted to 2002 dollars. Source: Table prepared by the U.S. Department of Health and Human Services based on U.S. Census Bureau calculations of Current Population Surdata. 
H-38 

 Table H-19 shows the anti-poverty effectiveness of market income and 

government programs for the elderly. Based both on cash income before 

transfers and on post-transfer income, the poverty rates among the elderly in 

2002 were among the lowest on record. As compared with 1979, when over 

54 percent of the elderly were poor before transfers, by 2002 only about 

50 percent of the elderly were poor before transfers. The comparable figures for 

the percentage of the elderly in poverty after transfers were 13.5 in 1979 and 

9.0 in 2002. The impact of Social Security transfers is by the far the greatest 

reason so many of the poor are removed from poverty by government transfers. 

In 1979 the poverty rate was dropped from 54.2 to 17.4 by Social Security 

payments; in 2002 the comparable figures were 49.9 to 11.5 percent. In 1979, a 

total of 8.9 million elderly persons were removed from poverty by Social 

Security; in 2002, the number had jumped to 13.1 million. The figures for the 

poverty gap for the elderly are not quite as impressive as the overall figures. 

Both the total number of dollars required to close the poverty gap and the size of 

the poverty gap per person in poverty have been almost stagnant in recent years. 

Even so, in 2002 the poverty gap is only $7.0 billion or $2,284 per person in 

poverty. As we will see, no other government program has as huge an impact on 

poverty among any group as does Social Security among the elderly. 

 The impact of market income and the safety net on children's poverty are 

shown in Table H-20. The poverty rate among children before transfers was 

19.7 percent in 2002, among the lowest levels since 1979 and more than 6 

percentage points lower than in 1993. Similarly, the child poverty rate after 

transfers in 2002 was 12.6, its lowest level since 1979 and 7.4 percentage points 

or 37 percent below its level in 1993. These figures show substantial progress 

against children's poverty, both before and after government transfers. That the 

pre-transfer level is so low suggests that the substantial increase in work by 

former welfare mothers after the 1996 welfare reform legislation (see Appendix 

L) has played an important role in poverty reduction among children. 

 The important role of work by single mothers in reducing child poverty is 

also shown by the data on percentage of children removed from poverty due to 

Federal taxes. The row of figures for taxes in all the panels of Table H-20 show 

that Federal tax policy is having a major and growing effect in reducing child 

poverty. In 1983, Federal taxes actually increased the poverty level among 

children by 5.1 percent. However, as the Federal Government reduced taxes and 

increased the EIC for low-income families with children by enacting reform 

legislation in 1986, 1990, 1993, and 2001, the impact of taxes actually became 

positive. By 2002, EIC payments to families reduced the child poverty rate from 

14.8 percent to 12.6 percent. It seems reasonable to conclude that the 

effectiveness of the EIC in fighting poverty can be attributed to two factors—the 

increasing generosity of EIC policy itself and the increase in work by lowincome families with children, especially families headed by mothers. 
TABLE H-20 -- ANTIPOVERTY EFFECTIVENESS OF CASH AND NON-CASH TRANSFERS (INCLUDING 

FEDERAL INCOME AND PAYROLL TAXES) FOR ALL CHILDREN UNDER 18, SELECTED YEARS 1979-20

Number of children and poverty measure 1979 1983 1989 1993 1996 1999 20

Total population (in thousands): 63,375 62,333 65,602 69,292 70,650 71,731 72,6Number of poor persons (thousands): 

Cash income before transfers 12,761 16,146 14,954 18,198 16,642 14,054 14,3

Plus social insurance 11,364 14,405 13,846 16,685 15,426 12,825 12,6Plus means-tested cash transfers 10,377 13,911 13,154 15,727 14,463 12,109 12,

Plus means-tested noncash benefits 8,421 12,464 11,409 13,874 12,576 10,683 10,7

Plus EITC and less Federal taxes 8,620 13,293 11,811 13,853 11,341 9,275 9,1

Number of persons (in thousands) removed from poverty due to: 

Social insurance 1,397 1,741 1,108 1,513 1,216 1,229 1,6Means-tested cash 987 494 692 958 963 716 50Means-tested noncash benefits 1,956 1,447 1,745 1,853 1,887 1,426 1,3

EITC and Federal taxes -199 -829 -402 21 1,235 1,408 1,5

Total persons removed from poverty 4,141 2,853 3,143 4,345 5,301 4,779 5,1

Percent of persons removed from poverty due to: 

Social insurance 10.9 10.8 7.4 8.3 7.3 8.7 11Means-tested cash 7.7 3.1 4.6 5.3 5.8 5.1 3

Means-tested noncash benefits 15.3 9.0 11.7 10.2 11.3 10.1 9EITC and Federal taxes -1.6 -5.1 -2.7 0.1 7.4 10.0 10

Total percent removed from poverty 32.5 17.7 21.0 23.9 31.9 34.0 35

Poverty rate (in percent): 

Cash income before transfers 20.1 25.9 22.8 26.3 23.6 19.6 19Plus social insurance 17.9 23.1 21.1 24.1 21.8 17.9 17Plus means-tested cash transfers 16.4 22.3 20.1 22.7 20.5 16.9 16

Plus means-tested noncash benefits 13.3 20.0 17.4 20.0 17.8 14.9 14Plus EITC and less Federal taxes 13.6 21.3 18.0 20.0 16.1 12.9 12

Total reduction in poverty rate 6.5 4.6 4.8 6.3 7.5 6.7 7

Poverty gap (billions of 2002 dollars): 
TABLE H-20 -- ANTIPOVERTY EFFECTIVENESS OF CASH AND NON-CASH TRANSFERS (INCLUDING 

FEDERAL INCOME AND PAYROLL TAXES) FOR ALL CHILDREN UNDER 18, SELECTED YEARS 1979-2

continued

Number of children and poverty measure 1979 1983 1989 1993 1996 1999 20

Cash income before transfers 36.6 48.6 44.5 55.8 48.3 37.6 37Plus social insurance 30.7 40.9 38.7 48.2 41.8 31.9 30Plus means-tested cash transfers 20.2 29.2 27.7 34.7 31.4 26.3 26

Plus means-tested noncash benefits 13.8 20.3 18.5 23.0 21.0 19.0 19Plus EITC and less Federal taxes 13.8 20.9 18.5 22.4 18.5 16.4 17

Poverty gap per poor person (in 2002 dollars): 

Cash income before transfers 2,872 3,008 2,978 3,067 2,903 2,673 2,6

Plus social insurance 2,704 2,839 2,795 2,892 2,711 2,486 2,4Plus means-tested cash transfers 1,946 2,101 2,103 2,206 2,169 2,170 2,1

Plus means-tested noncash benefits 1,635 1,630 1,625 1,661 1,673 1,777 1,8

Plus EITC and less Federal taxes 1,597 1,573 1,569 1,620 1,629 1,771 1,8

Reduction in poverty gap (in billions) due to: 

Social insurance 5.9 7.7 5.8 7.6 6.5 5.7 6

Means-tested cash 10.5 11.7 11.0 13.5 10.4 5.6 4.

Means-tested noncash benefits 6.4 8.9 9.1 11.7 10.3 7.3 7EITC and Federal taxes 0.0 -0.6 0.0 0.6 2.6 2.6 2

Total reduction in poverty gap (in billions) 22.9 27.7 26.0 33.4 29.8 21.1 20

Percent reduction in the poverty gap due to: 

Social insurance 16.1 15.8 13.1 13.6 13.4 15.1 18

Means-tested cash 28.8 24.0 24.8 24.3 21.6 14.9 10

Means-tested noncash benefits 17.5 18.4 20.5 20.9 21.4 19.4 18EITC and Federal taxes 0 -1.2 0 1.1 5.3 6.8 6

Total percent reduction in poverty gap 62.4 56.9 58.4 59.8 61.8 56.3 54

Note - Poverty gap dollars for each year adjusted to 2002 dollars. Source: Table prepared by the U.S. Department of Health and Human Services based on U.S. Census Bureau calculations of Current Population Surdata. 
TABLE H -21 -- ANTIPOVERTY EFFECTIVENESS OF CASH AND NON-CASH TRANSFERS (INCLUDING 

FEDERAL INCOME AND PAYROLL TAXES) FOR PERSONS IN UNITS WITH AN UNMARRIED HEAD AN

RELATED CHILDREN UNDER 18, SELECTED YEARS 1979-2002 

Number of persons and poverty measure 1979 1983 1990 1995 1999 2002 

Total population (in thousands): 23,547 25,559 30,508 36,428 36,220 38,36Number of poor persons (in thousands): 

Cash income before transfers 11,786 13,751 15,110 17,199 14,217 14,42Plus social insurance (other than Social Security) 11,568 13,501 14,841 16,882 13,971 13,89Plus Social Security 10,645 12,611 14,203 16,058 13,108 12,78Plus means-tested cash transfers 9,491 12,063 13,324 14,930 12,223 12,24Plus food and housing benefits 7,115 10,531 11,313 12,381 10,740 10,69

Plus EITC and less Federal payroll and income taxes 7,141 10,800 11,234 11,338 9,104 9,124 

Number of persons (in thousands) removed from poverty due to: 

Social insurance (other than Social Security) 218 250 269 317 246 535 Social Security 923 890 638 824 863 1,103 Means-tested cash 1,154 548 879 1,128 885 546 Food and housing benefits 2,376 1,532 2,011 2,549 1,483 1,544 EITC and Federal payroll and income taxes -26 -269 79 1,043 1,636 1,573 

 Total persons removed from poverty 4,645 2,951 3,876 5,861 5,113 5,30

Percent of persons removed from poverty due to: 

Social insurance (other than Social Security) 1.85 1.82 1.78 1.84 1.73 3.71 Social Security 7.83 6.47 4.22 4.79 6.07 7.65 

Means-tested cash 9.79 3.99 5.82 6.56 6.22 3.79 

Food and housing benefits 20.16 11.14 13.31 14.82 10.43 10.70 

EITC and Federal payroll and income taxes -0.22 -1.96 0.52 6.06 11.51 10.90 

Total percent removed from poverty 39.41 21.46 25.65 34.08 35.96 36.75 

Poverty rate (in percent): 

Cash income before transfers 50.05 53.80 49.53 47.21 39.25 37.60 

Plus social insurance (other than Social Security) 49.13 52.82 48.65 46.34 38.57 36.2Plus Social Security 45.21 49.34 46.56 44.08 36.19 33.33 

Plus means-tested cash transfers 40.31 47.20 43.67 40.98 33.75 31.9
TABLE H -21 -- ANTIPOVERTY EFFECTIVENESS OF CASH AND NON-CASH TRANSFERS (INCLUDIN

FEDERAL INCOME AND PAYROLL TAXES) FOR PERSONS IN UNITS WITH AN UNMARRIED HEAD A

RELATED CHILDREN UNDER 18, SELECTED YEARS 1979-2002-continued

Number of persons and poverty measure 1979 1983 1990 1995 1999 2002 

Plus food and housing benefits 30.22 41.20 37.08 33.99 29.65 27.88 Plus EITC and less Federal payroll and income taxes 30.33 42.26 36.82 31.12 25.14 23.78 

 Total reduction in poverty rate 19.73 11.55 12.70 16.09 14.12 13.82 

Poverty gap (millions of 2002 dollars): 

Cash income before transfers 38,880 49,935 52,894 54,630 42,067 42,84

Plus social insurance (other than Social Security) 37,779 48,096 51,487 53,327 40,822 40,69

Plus Social Security 33,364 43,348 47,466 48,212 36,430 35,34Plus means-tested cash transfers 19,252 28,479 32,224 33,194 28,739 29,75

Plus food and housing benefits 11,946 18,508 19,481 20,312 19,692 20,70

Plus EITC and less Federal payroll and income taxes 11,861 18,626 19,251 18,509 17,162 18,43

Poverty gap per poor person (in 2002 dollars): 

Cash income before transfers 3,299 3,631 3,501 3,176 2,959 2,970 Social insurance 3,134 3,437 3,342 3,002 2,779 2,764 

Means-tested cash 2,028 2,361 2,418 2,223 2,351 2,43

Food and housing benefits 1,679 1,758 1,722 1,641 1,834 1,936 EITC and Federal payroll and income taxes 1,661 1,725 1,714 1,633 1,885 2,020 

Reduction in poverty gap (in millions) due to: 

Social insurance (other than Social Security) 1,101 1,839 1,407 1,303 1,245 2,152 Social Security 4,415 4,749 4,021 5,115 4,392 5,343 

Means-tested cash 14,112 14,869 15,243 15,018 7,692 5,590 

Food and housing benefits 7,305 9,970 12,743 12,882 9,047 9,049 EITC and Federal payroll and income taxes 85 -117 230 1,803 2,530 2,276 

 Total reduction in poverty gap (in millions) 27,019 31,309 33,643 36,120 24,905 24,41

Percent reduction in the poverty gap due to: 

Social insurance (other than Social Security) 2.83 3.68 2.66 2.39 2.96 5.02 Social Security 11.35 9.51 7.60 9.36 10.44 12.47 

Means-tested cash 36.30 29.78 28.82 27.49 18.28 13.05 
Food and housing benefits 18.79 19.97 24.09 23.58 21.51 21.12 

EITC and Federal payroll and income taxes 0.22 -0.24 0.43 3.30 6.01 5.31 

 Total percent reduction in poverty gap 69.49 62.70 63.60 66.12 59.20 56.98 

Note – Poverty gap dollars for each year adjusted to 2002 dollars. Source: Table prepared by the U.S. Department of Health and Human Services based on Congressional Budget Office calculations of Current Popu

Survey data. 
H-44 

 Data on the poverty gap for children are somewhat mixed. Data on the 

pre-transfer poverty gap are uniformly positive. Despite the fact that the number 

of children grew by over 10 million or nearly 17 percent between 1983 and 

2002, the poverty gap before transfers nonetheless fell from almost $49 billion 

to about $37 billion, in constant 2002 dollars, a real decline of 23 percent. 

Similarly, the pre-transfer poverty gap per poor child in 2002 continued to fall to 

$2,615, its lowest level during this period. However, the post-tax, post-transfer 

poverty gap per poor child rose during this period. This period saw significant 

declines in receipt of cash and other welfare benefits, and means-tested cash 

(and, especially in recent years, non-cash) benefits have become generally less 

effective in removing children from poverty; as shown in the middle two rows 

of the last panel of Table H-20, taken together these policies reduced by only 

29.5 percent in 2002 as compared with 46.3 percent in 1979, 45.3 percent in 

1989, 43.0 percent in 1996, and 34.3 percent in 1999. The effect of the EIC in 

reducing the poverty gap, however, remained potent; in fact, at 6.2 percent it 

was greater than in any previous year shown other than 1999. Despite the 

effectiveness of the EIC, the overall impact of government programs reduced the 

poverty gap less than in any previous year. The major reason for the reduced 

effectiveness of government programs in reducing the poverty gap seems to be a 

decline in the impact of means-tested cash benefits. In 1979 these benefits 

reduced the poverty gap by 28.8 percent. By contrast, in 2002 they reduced the 

poverty gap by only 10.9 percent. Undoubtedly, the decline in the welfare rolls 

and in cash benefits from the Temporary Assistance for Needy Families 

Program play an important role here. 

 Poverty data for persons in units headed by single parents is generally 

consistent with the data for children. The first point to emphasize with these data 

(see the top row of Table H-21), which simply reinforces the conclusion from 

the data on single mothers in Table H-15, is that there has been a very large 

increase in the number of persons in families with unmarried heads. The number 

jumped from 23.5 million in 1979 to 38.4 million in 2002, an increase of more 

than 60 percent. By contrast, the number of persons in married couple families 

increased from 101.3 million to only 104.7 million in 2000 (see Table H-11), an 

increase of about 3 percent. Thus, the family type with the highest poverty rate 

has been increasing more than 10 times as fast as the family type with the lowest 

poverty rate. These demographic developments make progress against poverty 

somewhat difficult. 

 Even so, the pre-transfer poverty rate among persons in families with an 

unmarried head nearly matched its lowest level ever in 2002 at 37.6 percent. 

Compared with the 53.8 percent pre-transfer rate in 1983, that's a drop of over 

30 percent. Progress against pre-transfer poverty among these families was 

continuous and rapid during the 1990s economic expansion, with a drop of 21 

percent from 49.5 percent in 1990 to 39.3 percent in 1999. Despite the 2001 

recession, this figure continued to fall, to 37.6 percent in 2002. Again, as we 

saw in the case of children, progress against pre-transfer poverty has been 
H-45 

substantial in recent years, in all likelihood due to the increase in work by single 

mothers. 

 On the other hand, again as was the case with children, progress against 

poverty as measured by the poverty gap has been uneven. Although the pretransfer poverty gap at $42.8 billion for these families nearly matches its low 

since 1979, and although the gap has fallen 22 percent just since 1995, meanstested cash programs have been increasingly less effective in reducing the 

poverty gap. By contrast, as with children, Federal tax policy has been more 

effective at reducing the poverty gap. Even so, the combination of the reduced 

pre-transfer poverty gap and the increased effectiveness of the EIC in reducing 

the poverty gap failed to outweigh the declining effectiveness of means-tested 

cash and noncash transfers in reducing the poverty gap. As a result, the 

reduction in the post-tax, post-transfer poverty gap for these families was lower 

than in the past as measured either by dollars or percentage reduction. 

REFERENCES 

U.S. Census Bureau. (1986). Money income and poverty status of families and 

persons in the United States: 1985. Current Population Reports (Series P60, No. 154). Washington, DC: U.S. Government Printing Office. 

U.S. Census Bureau. (1993). Money income of households, families, and 

persons in the United States: 1991. Current Population Reports (Series P60, No. 180). Washington, DC: U.S. Government Printing Office. 

U.S. Census Bureau. (1996 and various years). Income, poverty, and valuation 

of noncash benefits, 1994. Current Population Reports (Series P-60, No. 

189). Washington, DC: U.S. Government Printing Office. [Several 

publications from the P-60 Series were used in preparing the tables for 

this chapter. These include numbers 124, 140, 145, 149, 154, 157, 161, 

166, 168, 174, and 180.]