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Measuring Poverty with the SIPP and the CPS

Written by:
Working Paper Number SEHSD-WP1988-10 or SIPP-WP-45

Introduction

Official poverty statistics estimated by the Bureau of the Census are widely used to gauge the well-being of low-income families.  These statistics are obtained by comparing cash income received by a family—as reported on the March supplement to the Current Population Survey (CPS)—against poverty thresholds designed to denote the amount of money required over a year to keep families out of poverty.  In recent months, data from an alternative source, the Survey of Income and Program Participation (SIPP), have become available that allow the calculation of  alternative measures of poverty.  This paper uses these new data to obtain a variety of poverty rate estimates for 1984, and compares those estimates with the official poverty statistics derived from the CPS.

The analysis examines two basic questions.  First, how do poverty rates differ across alternative definitions?  The SIPP data allow estimation of both monthly and annual poverty rates, as well as different formulations of annual rates.  Second, and perhaps more important for policy purposes, how different are annual poverty statistics calculated from CPS and SIPP data?

Page Last Revised - October 8, 2021
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