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L2 Sept 1 - Official US Definition of Poverty Developed by...

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Official US Definition of Poverty Developed by Mollie Orshansky in 1960s Poverty lines/thresholds Based on the minimum cost of a nutritionally adequate diet (Thrifty Food Plan) x 3 to account for other necessities adjustments for family size Based on expenditures of 1950s Only adjusted for inflation since then 11
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Identifying the poor Compare Resources - PRE-TAX, PRE-TRANSFER MONEY INCOME Includes : Wages, business income, government cash transfers, pension income, interest/dividends Does not include : In-kind government transfers (food stamps (SNAP), Medicare, Medicaid, housing subsidies) or EITC 22
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2009 Poverty Thresholds ($) Size of Fam ily Unit None One Tw o Three Four One perso n (unrelat ed individual) ...... Under 65 years ...... 11,161 65 years an d over ...... 10,289 Tw o people ...... Househ older und er 65 years ...... 14,366 14,787 Househ older 65 years and over ...... 12,968 14,731 Three people ...... 16,781 17,268 17,285 Fou r peo ple ...... 22,128 22,490 21,756 21,832 Five p eop le ...... 26,686 27,074 26,245 25,603 25,211 Related children under 18 years Source: U.S. Census Bureau | Poverty | Last Revised: June 22, 2010 33
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Some key characteristics of U.S. poverty measure Family-based measure (related by blood, marriage, or adoption) Single national threshold Adjustments for family size and composition, only YES/NO indicator Does not consider social isolation or material hardship Current annual income 44
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Poverty Rates Over Time 55
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Poverty Rates by Age 66
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Assessing Cause Observational studies Provide information about relationships Ex: education and income Experimental studies randomization Natural experiments or quasi- experiments Use observational data but find ways to “re-create” an experiment 77
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Examples
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