Census Bureau Releases 2015 Supplemental Poverty Measure

Written By: Trudi Renwick and Liana Fox

Today the U.S. Census Bureau, in collaboration with the Bureau of Labor Statistics, released its sixth annual supplemental poverty measure report.  This measure extends information provided by the official poverty measure by explicitly including benefits from many of the government programs designed to assist low-income families and individuals.

According to the report, the supplemental poverty measure (SPM) rate in 2015 was 14.3 percent, which was significantly lower than the rate of 15.3 percent in 2014. The supplemental rate was higher than the official poverty rate of 13.5 percent in 2015.

Since the publication of the first official U.S. poverty estimates in 1964, there has been a continuing discussion about the best approach to measure income and poverty in the United States. In 2009, an interagency group asked the Census Bureau, in cooperation with the Bureau of Labor Statistics, to develop a supplemental measure to allow for an improved understanding of the economic well-being of American families and the impact of federal policies.

The supplemental poverty measure differs from the official measure in several key ways. First, the official measure only looks at pretax money income, while the supplemental measure adds the value of noncash benefits, such as the Supplemental Nutrition Assistance Program, school lunches, housing assistance and refundable tax credits like the Earned Income Tax Credit into the definition of “income” or “resources.” Additionally, necessary expenses for essential goods and services such as taxes, childcare and work expenses, and contributions toward the cost of medical care and health insurance premiums are deducted from income in the supplemental measure.

The supplemental measure also uses a more inclusive definition of family (including unmarried partners and their relatives, unrelated children and foster children). Finally, the supplemental measure applies geographically-adjusted thresholds that adjust for family composition and housing tenure status.

One important contribution of the supplemental poverty measure is that it allows one to gauge the effectiveness of tax credits and transfers in reducing poverty. It can also show the impact of necessary expenses, such as paying taxes or work-related and medical out-of-pocket expenses, on a family’s ability to meet basic needs.

For example, the SPM report shows that:

  • Without Social Security benefits, the supplemental poverty rate overall would have been 8.3 percentage points higher. This represents about 26.6 million more individuals in poverty, including 17.1 million individuals age 65 and older.
  • People 65 and older had a supplemental poverty rate of 13.7 percent, equating to 6.5 million people in poverty. Excluding Social Security from income would more than triple the poverty rate for this group, resulting in a poverty rate of 49.7 percent.
  • Not including refundable tax credits (the Earned Income Tax Credit and the refundable portion of the child tax credit) in resources would have resulted in an additional 9.2 million individuals falling into poverty, a 2.9 percentage point increase.
  • Not accounting for refundable tax credits for children would have resulted in a poverty rate of 22.6 percent rather than 16.1 percent. This difference represents 4.8 million children who would have been considered poor in the absence of these credits.
  • Taking account of other noncash benefits also lowered poverty rates. For example, Supplemental Nutrition Assistance Program benefits lowered the overall poverty rate by 1.4 percentage points or 4.6 million people.

The figure below shows the effect of various elements of the supplemental poverty measure on the number of individuals below poverty for 2015. Each bar is divided by the age composition of the population affected by the inclusion of each element.


Social Security transfers and refundable tax credits had the largest impacts in raising individuals above the SPM poverty thresholds, with Social Security affecting the largest number of adults ages 18 to 64 and 65 years and older, while refundable tax credits affected the largest number of children.

For more information, check out The Supplemental Poverty Measure: 2015 report.

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Another Look at Health Insurance Coverage Rates for Young Adults

Written by: Jennifer Cheeseman Day, Marina Vornovitsky and Danielle Taylor

In the last half decade, young adults (ages 19 to 25) gained health insurance coverage more than any other age group (Figure 1). In 2010, young adults had the highest uninsured rate compared with every other age group — with about one-third of them lacking health insurance. Since then, their uninsured rate has dropped dramatically, with the most recent figures indicating one in six of young adults lack health insurance coverage. How did this group improve so much?


The change occurred in two waves: between 2010 to 2013 and 2013 to 2015. As shown in the report, Health Insurance Coverage of Young Adults Aged 19 to 25: 2008, 2009, and 2011, young adults benefited from the federal law change in 2010 when adult children under age 26 could now be covered by their parents’ private health insurance plans. Prior to this change, only young adults enrolled in school could be included on their parents’ plans. Then, after 2013, further provisions in the healthcare law expanded health insurance coverage options for everyone, including young adults not already covered through their parents’ private plan.

So let’s look at the numbers. In 2010, the uninsured rate for young adults enrolled in school was about one-half that of their counterparts, who were not enrolled, 20.3 percent compared with 41.9 percent (Figure 2). Between 2010 and 2013, the uninsured rate improved 10 percentage points for young adults not enrolled and 3 percentage points for those enrolled in school. During the most recent two years (between 2013 and 2015), both young adult groups, enrolled and not enrolled, experienced sharp declines, though the uninsured rate for enrolled young adults remained lower than that of those not enrolled (10.0 percent and 20.6 percent).


So what kind of health insurance did young adults get? Looking at Figure 3, we can see that between 2010 and 2013, almost all of the changes in health insurance coverage were concentrated in employment-based health insurance, most likely through a parent’s employer. The rates of employment-based health insurance for young adults not enrolled in school increased by 10 percentage points compared with 3 percentage points for those enrolled in school. After 2013, the increased health insurance coverage of young adults, both enrolled and not enrolled in school, mirrored that of all working-age adults, gaining coverage through direct purchase and Medicaid, as well as making further gains in employment-based health insurance.


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2015 Drop in Poverty is Largest on Record Since 1999

Written by: Ashley Edwards, Chief, Poverty Statistics Branch

Estimates released today from the Current Population Survey Annual Social and Economic Supplement (CPS ASEC) show the official poverty rate in the United States declined to 13.5 percent in 2015, a 1.2 percentage point drop from 2014. The last time poverty rates declined this much from year to year was from 1998 to 1999 – making this the largest decline in poverty rates over the past 16 years.

Since 1959, the first year for which the U.S. Census Bureau released poverty estimates, there has been only one year with a larger decline in poverty rates, 1966, when poverty declined by 2.6 percentage points following the implementation of a revised methodology for processing income data. poverty-blog-fig-1
Between 2014 and 2015, poverty rates declined for many different demographic groups. Poverty rates fell for both males and females. In 2015, 12.2 percent of males were in poverty while 14.8 percent of females were in poverty.

Poverty rates declined for all three major age groups between 2014 and 2015. Poverty decreased to 12.4 percent for people aged 18 to 64, to 8.8 percent for people aged 65 and older, and declined to 19.7 percent for children under 18.

Poverty rates also declined for most racial and ethnic groups in the population. In 2015, the poverty rate for non-Hispanic whites declined to 9.1 percent. Poverty rates for Hispanics decreased to 21.4 percent in 2015 while the poverty rate for blacks fell to 24.1 percent. Asians did not experience a statistically significant change in their poverty rates between 2014 and 2015.

In 2015, poverty rates decreased in three of the four regions: the South, West and the Midwest. The Northeast did not experience a statistically significant change in the poverty rate between 2014 and 2015.


You can find out more about this decline in poverty by visiting <www.census.gov/topics/income-poverty/poverty.html> to explore income and poverty data across additional demographic groups for 2015 as well as previous years.

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Grandparents and Grandchildren

In Honor of Grandparents Day, a Look at a Collection of Statistics about Grandparents Who Live With Their Grandchildren

Statistics from the American Community Survey provide information on grandparents living with their grandchildren, including those who have primary care of them. These statistics help federal, state and local program managers understand the needs of this group and design programs for both generations.

2014 American Community Survey data released last year tell us who these grandparents are and how their numbers and profiles have changed since data on grandparent caregivers were collected in Census 2000.

Are there more grandparents who live with their grandchildren now than in 2000?

The percentage of the population 30 years and older living with grandchildren has increased from 3.6 percent in 2000 to 3.8 percent in 2014.

A variety of factors may be contributing to this increase. For example, recent immigrants are more likely to live in extended family households. Births outside of marriage are associated with a mother and child more likely to live with the mother’s parent(s). Economic need leads parents to leave a child with a grandparent while they travel for work, and some race/ethnic groups are more likely to live in multigenerational households.

Is there a difference among racial and ethnic groups?

Non-Hispanic whites are the least likely to live under the same roof as their grandchildren (2.6%), an increase from 2.2% in 2000. The largest drop happened among blacks, who saw a decline from 8.2 percent in 2000 to 5.6 percent in 2014.

Native Hawaiians and Other Pacific Islanders were most likely to live with grandchildren in 2014 (9.9 percent), followed by American Indians and Alaska Natives and people of Some Other Race (both at 7.6 percent), Hispanics (7.1 percent) and Asians (6.0 percent).


Are grandparents the primary caregivers?

Not necessarily and, in fact, the percentage responsible for their grandchildren dropped during the same period, from 42.0 percent in 2000 to 36.4 percent in 2014. There was no change in the percentage of grandparents responsible for grandchildren where the grandchild’s parents were not living in the household, which remained stable at about 34.0 percent.

Since 2000, there has been a drop in grandparents who are their grandchildren’s primary caregivers among most race groups. For instance, the percent of blacks living with grandchildren who were responsible for those grandchildren dropped from 51.7 percent in 2000 to 44.0 percent in 2014.

Comparing race and ethnic groups in 2014, American Indian and Alaska Native grandparents who live with grandchildren were most likely to be responsible for raising them (51.1 percent). Asians were least likely (14.8 percent).

The U.S. Census Bureau began collecting data on grandparents who have primary responsibility for the care of their grandchildren in 1999 during a test for the American Community Survey. The 2000 Census asked about grandparents as caregivers and the questions remain on the American Community Survey today.


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What Does it Mean to be in Poverty in the U.S., Statistically Speaking?

Written by Ashley Edwards and Jose Pacas, Poverty Statistics Branch

You may have heard public officials or the media talk recently about the poverty rate in America. In advance of the U.S. Census Bureau’s release of its annual income and poverty reports next week, we thought it might be worth reviewing how poverty is officially defined and measured in the United States.

The official poverty measure for the United States was established in 1969 and is calculated based on data collected in the Annual Social and Economic Supplement to the Current Population Survey (CPS). The CPS is a household survey sponsored jointly by the U.S. Census Bureau and the U.S. Bureau of Labor Statistics and has data dating back to 1965 on key socio-economic topics about the population.

Two factors are used to determine a family’s or individual’s poverty status: (1) their family or individual income and (2) their poverty threshold. If a family’s total income for the year is below its assigned poverty threshold, then that family — and every individual in it — is considered to be in poverty.

It seems simple, but understanding how poverty is measured and how to interpret the resulting statistics can be confusing. Let’s start with how we define a family. The Census Bureau groups people living in a household into families based on their relationships to one another. Families consist of individuals who are related by birth, marriage or adoption. A household can consist of a single family, a single individual, multiple families, multiple unrelated people living together (such as roommates), or some combination of families and  unrelated individuals (Table 1).


Once people are grouped into families within a household, the appropriate incomes are combined into a total family income measure. For an unrelated individual, their personal income is their family income. However, many people are surprised by what is and is not included in this income measure. When calculating the official poverty measure, family income is calculated from only pretax cash income. That includes things like earnings before taxes, Social Security, pensions and retirement income, cash public assistance and child support, but excludes capital gains, noncash benefits such as food assistance or housing subsidies, as well as the value of property and money saved in bank accounts.

Once total family income is calculated, poverty status is determined by comparing a family’s annual income to their assigned poverty threshold. Poverty thresholds are set by the Office of Management and Budget’s Statistical Policy Directive 14 and are updated every year for inflation. Thresholds vary by only two factors: (1) size of the family and (2) age of the family members. Thresholds do not vary geographically, meaning families of the same composition will have the same poverty threshold regardless of where they live in the United States. See Table 2 for 2015 poverty thresholds.


If a family’s total annual income is below their poverty threshold, then that family (including every individual in it) is considered to be in poverty for the year.

Measures of poverty in the United States are extremely valuable, as they provide a statistical yardstick to gauge the well-being of families and evaluate year-to-year changes in poverty for the country as a whole and for specific subgroups. It is important to understand how these estimates are produced and how those methods impact the interpretation of these statistics. The poverty thresholds used for the official poverty measure are not intended to serve as a complete description of what people and families need to live, and the pretax cash income measures may not fully capture the resources available to families to meet their living expenses.

On September 13, 2016, the Census Bureau will release the new official poverty estimates, along with estimates from the Supplemental Poverty Measure (SPM). The SPM makes alternate assumptions about the grouping of families, the assignment of poverty thresholds, and the calculation of family income. While the SPM is not the “official” source of poverty and is not used to determine eligibility for government programs, it does provide valuable information on the well-being of low-income individuals. We invite the public and data users of all levels to learn more about how the Census Bureau measures poverty in the United States.


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