444PART SIXTHE ECONOMICS OF LABOR MARKETSannual incomes. What people care about, however, is not their incomes but theirability to maintain a good standard of living. For various reasons, data on the in-come distribution and the poverty rate give an incomplete picture of inequality inliving standards. We examine these reasons below.In-Kind TransfersMeasurements of the distribution of income and thepoverty rate are based on families’ money income. Through various governmentprograms, however, the poor receive many nonmonetary items, including foodstamps, housing vouchers, and medical services. Transfers to the poor given in theform of goods and services rather than cash are called in-kind transfers.Standardmeasurements of the degree of inequality do not take account of these in-kindtransfers.Because in-kind transfers are received mostly by the poorest members of soci-ety, the failure to include in-kind transfers as part of income greatly affects themeasured poverty rate. According to a study by the Census Bureau, if in-kind
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Household income in the United States, Census Bureau, in-kind transfers