Waging War on Poverty: Poverty Trends Using a Historical Supplemental Poverty Measure

Using data from the Consumer Expenditure Survey and the March Current Population Survey, we provide poverty estimates for 1967 to 2012 based on a historical supplemental poverty measure (SPM). During this period, poverty, as officially measured, has stagnated. However, the official poverty measure (OPM) does not account for the effect of near‐cash transfers on the financial resources available to families, an important omission since such transfers have become an increasingly important part of government antipoverty policy. Applying the historical SPM, which does count such transfers, we find that trends in poverty have been more favorable than the OPM suggests and that government policies have played an important and growing role in reducing poverty—a role that is not evident when the OPM is used to assess poverty. We also find that government programs have played a particularly important role in alleviating child poverty and deep poverty, especially during economic downturns.