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Understanding Poverty Rates and Gaps: Concepts, Trends, and Challenges

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  • Ziliak, James P.

Abstract

I survey key developments in applied and theoretical research on poverty rates and poverty gaps over the past two decades, and provide a detailed analysis of poverty trends across a variety of income measures and poverty indexes. Included is an extensive summary of how poverty thresholds and economic resources are measured and several proposed recommendations for revision. In addition I discuss axiomatically derived alternatives to the standard poverty rate that provide estimates not only of the incidence of poverty, but also the intensity and the inequality of poverty. The empirical analysis shows that while poverty rates fell in the late 1990s, deep poverty held steady and even rose for broad income measures that include the usual private and public income sources along with in-kind transfers such as food stamps and subsidized housing, and tax credits such as the EITC. I conclude with a discussion of a number of new challenges facing poverty measurement, especially issues of data quality in the Current Population Survey, and recommendations for future research and policy on poverty measurement.

Suggested Citation

  • Ziliak, James P., 2006. "Understanding Poverty Rates and Gaps: Concepts, Trends, and Challenges," Foundations and Trends(R) in Microeconomics, now publishers, vol. 1(3), pages 127-199, August.
    • Handle: RePEc:now:fntmic:0700000009
    DOI: 10.1561/0700000009
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    Cited by:

    1. James P. Ziliak, 2015. "Recent developments in antipoverty policies in the United States," Chapters, in: John Karl Scholz & Hyungypo Moon & Sang-Hyup Lee (ed.), Social Policies in an Age of Austerity, chapter 9, pages 235-262, Edward Elgar Publishing.
    2. Yanliang Yang & George C Davis & Wen You, 2019. "Measuring Food Expenditure Poverty in SNAP Populations: Some Extensions with an Application to the American Recovery and Reinvestment Act," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 41(1), pages 133-152, March.
    3. Jonathan Fisher & Bradley L. Hardy, 2023. "Money matters: consumption variability across the income distribution," Fiscal Studies, John Wiley & Sons, vol. 44(3), pages 275-298, September.
    4. David Brady & Zachary Parolin, 2020. "The Levels and Trends in Deep and Extreme Poverty in the United States, 1993–2016," Demography, Springer;Population Association of America (PAA), vol. 57(6), pages 2337-2360, December.
    5. Oliver Denk & Robert P. Hagemann & Patrick Lenain & Valentin Somma, 2013. "Inequality and Poverty in the United States: Public Policies for Inclusive Growth," OECD Economics Department Working Papers 1052, OECD Publishing.

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