The California Poverty Measure - Welfare Research · 2014. 12. 27. · Poverty and Inequality at...
Transcript of The California Poverty Measure - Welfare Research · 2014. 12. 27. · Poverty and Inequality at...
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The California Poverty Measure
Sarah Bohn, Caroline Danielson, Matt Levin, Beth Mattingly, Chris Wimer
A Collaboration between PPIC and the Center on Poverty and Inequality at Stanford University
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SPM a Shock for California
2SOURCE: Short, 2012.
0
5
10
15
20
25
United States California U.S. outside ofCalifornia
Percent
Official
Supplemental
+2.6 million
+2.7 million
-130,000
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Outline
❧Measuring Poverty
❧Data, Methodology, and Contributions
❧Preliminary Estimates and Program Effects
❧Conclusions and Next Steps
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Measuring Poverty: The OPM
❧Official poverty statistics (“OPM”) developed in the early 1960s, officially adopted in 1969
❧Thresholds: “Economy” diet from 1955, multiplied by 3 for other necessities, indexed for inflation;
❧Resources: Pre-tax cash income; no in-kind benefits, excludes many safety net programs
❧Expenses: No accounting for non-discretionary expenses
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OPM vs. SPM/CPM
OPM CPM/SPM
Poverty thresholds
National thresholds 3x 1950s subsistence diet; updated for inflation.
Derived from expenditures on food, clothing, shelter and utilities (Consumer Expenditure survey). Adjusted regionally for cost of living.
Resources
Pre-tax cash income (includes earnings, investments, and cash-based government programs).
Adds in-kind government programs and net taxes.
Expenses N/A
Out-of-pocket expenses for commuting/other work expenses, medical costs, and child care subtracted from resources.
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0
5000
10000
15000
20000
25000
30000
35000
4000036349
30785
24518 23236
Renters
Owners
Owners without mortgages
OPM threshold: $22,811
OPM VS CPM: Thresholds (2011)
6
Family of Four
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Outline
❧Measuring Poverty
❧Data, Methodology, and Contributions
❧Preliminary Estimates and Program Effects
❧Conclusions and Next Steps
7
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Data (1)
❧American Community Survey (ACS)– Large sample sizes (350,000 for
California)– Used for all state-level SPM research
(Census uses CPS)– County-level estimates feasible
❧ACS limitations– Fewer/less detailed resources questions– No relevant expenses questions
❧External Data Used for ACS Augmentation– Custom runs of DSS administrative data
(MEDS, RADEP)– Other Surveys: SIPP, CPS
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CPM Contributions
– Correction for survey under-reporting for SNAP and TANF
● TANF important program for CA: 1/3 of nation’s caseload
– County-level poverty threshold adjustment; additional adjustment for homeowners without mortgages
– Identification of unauthorized immigrants
– Hugely indebted to work of other sub-national SPM researchers: Wisconsin IRP, NY CEO, Urban Institute, University of Virginia
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Outline
❧Measuring Poverty
❧Data, Methodology, and Contributions
❧Preliminary Estimates and Program Effects
❧Conclusions and Next Steps
10
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Californians in Poverty (2011)
11SOURCES: ACS, augmented; CPS/IPUMS; Census.
All persons Children Adults Elderly0
5
10
15
20
25
30
21.924.3
21.419.3
16.5
23.5
15
9.6
CPM OPM
Pe
rce
nt in
Po
vert
y
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Family expenses and program benefits have substantial effect on CPM
12
Medical out of pocket
Work expense+Child care
School meals
SSI
Housing subsidies
TANF/GA
SNAP
EITC/CTC
-8 -6 -4 -2 0 2 4 6 8
Effect of excluding individual elements on CPM
Percentage Point difference compared to CPM baseline of 21.9%
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Clear role for programs in reducing child poverty
13
Medical out of pocket
Work expense+Child care
School meals
SSI
Housing subsidies
TANF/GA
SNAP
EITC/CTC
-8 -6 -4 -2 0 2 4 6 8
Effect of excluding individual elements on CPM for children
Percentage Point difference compared to Child CPM baseline of 24.3%
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Poverty would be much higher in the absence of major safety net programs
14
Note: safety net programs measured here include CalWORKs, GA, SSI, CalFresh, EITC, CTC, housing subsidies, school meals. Does not include social security or unemployment insurance.
All persons Children Elderly0
10
20
30
40
50
CPM with and without safety net programs
CPM Absent safety net programs
CPM
Perc
en
t in
povert
y
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Outline
❧Measuring Poverty
❧Data, Methodology, and Contributions
❧Preliminary Estimates and Program Effects
❧Conclusions and Next Steps
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Next Steps
❧Feedback from you, Census, state-SPM researchers.
❧Regional, subgroup analysis…coming soon!
❧Policy Change Simulations
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Thank you!
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Methods: Identifying Unauthorized Immigrants
❧Highly likely to be in poor families
❧2.8 million unauthorized in California
❧Ineligible for social safety net assistance– But children of unauthorized
immigrants are usually citizens, and are eligible
❧Important to accuracy of CPM…
❧…especially because we are aiming to create CPM by region and demographic group
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SPARE SLIDES
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Unauthorized immigrants in California zip codes, 2008
20Hill and Johnson (2011); based on ITIN filing
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Methods: Identifying Unauthorized Immigrants
❧Goal: exclude unauthorized immigrants from eligibility for key programs
❧Challenge: ACS does not identify unauthorized
❧Approach in the ACS:– Identify a pool of “potentially
unauthorized” based on Passel and Cohn (2009) algorithm
– Select from pool to match unauthorized totals (or distribution) by county from Hill and Johnson (2011)
❧Needs to be “right” only at aggregate levels
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“Likely Unauthorized” algorithm
22
Sequential algorithm step
Pool of likely unauthorized
Non-naturalized immigrant population 5,356,947Remove likely legalized by amnesty 4,609,894 Remove based on occupation 4,306,861 Remove likely student visa holders 4,105,900 Remove anyone with a legal spouse 3,405,064
Random assignment to match county distribution 2,800,000
Best Unauthorized in California estimate (DHS Office of Immigration Statistics) 2,830,000
20% overcount
1% undercount
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Validation – county distribution
23
Unauthorized Counts Shares
Example county
(1)ACS likely unauthorized
(2)Best estimate
(3)ACS likely unauthorized
(4)Best estimate
Butte 3,968 3,938 0.1% 0.1%Colusa/Glenn/Tehama/Trinity 4,345 9,845 0.2% 0.3%
Contra Costa 74,885 77,777 2.7% 2.7%Kern 8,466 45,288 1.7% 1.6%Los Angeles 902,024 901,819 32.2% 31.9%Merced 21,731 21,659 0.8% 0.8%Orange 284,653 284,526 10.2% 10.1%San Bernardino 145,655 147,678 5.2% 5.2%San Francisco 29,616 29,536 1.1% 1.0%San Joaquin 53,860 53,164 1.9% 1.9%San Mateo 54,475 54,149 1.9% 1.9%Santa Clara 174,364 177,213 6.2% 6.3%
California total 2,803,643 2,829,998
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Validation – demographic characteristics
24
Likely Unauthorized in CA (ACS Procedure)
Actual Unauthorized in US(Passel estimate)
Education: Less than High School 53% 47%High School Graduate 27 27
Some College 9 10
College Graduate 10 15Age: Child (<18) 14 13
Adult 86 87Birthplace: Mexico 64 59
Central America 9 11
South America 2 7
South and East Asia 14 11
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How does this affect CPM estimates?
❧Exclude unauthorized immigrants from calculation of benefits in:
– SNAP– TANF– EITC/CTC– Housing subsidies
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Outline
❧Measuring Poverty
❧Data and Overview of Methods
❧CPM Estimates
❧Methods: Unauthorized Immigrants
❧Methods: Modeling SNAP Benefits
❧Ongoing Efforts
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Methods example: Modeling SNAP
❧ACS respondents asked:IN THE PAST 12 MONTHS, did anyone in this household receive Food Stamps or a Food Stamp benefit card?Include government benefits from the Supplemental Nutrition Assistance Program (SNAP). Do NOT include WIC or the National School Lunch Program.[ ] Yes[ ] No
❧Problems – “This household” ≠ SNAP unit– “In the past 12 months,” not how
long– No information about benefit amount– Underreporting
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Basic procedure for modeling SNAP
❧Assign SNAP participation to ACS respondents to match administrative totals
❧Impute SNAP benefits received based on administrative survey of participants
❧Important asides:– Uses custom administrative tabulations
in order to get demographic and county distributions right
– Considers overlapping SNAP and TANF caseload
– Careful to account for CA-specific program rules
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SNAP Underreporting in ACS
❧Best estimate of self-reported participation yields 33% undercount of SNAP recipients in ACS
29
SNAP reporting in ACS
Administrative totals Census
householdsSplit into
SNAP units
SSI and unauthorized removed
Child only 1,251 33,082 450,080 767,348
Single adult 86,636 823,720 643,933 966,513
Multiple adults, no kids
558,893 257,057 189,659 205,101
Single parent 571,121 1,516,169 1,229,330 1,876,202
Multiple adults, kids 3,494,546 1,814,859 1,205,198 1,726,367
Total 4,712,447 4,444,887 3,718,200 5,541,531
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Assigning SNAP receipt
30
SNAP assignment in ACS
Administrative totals
Our self-reporter estimate
Income eligible non-
reporters
Our assigned
cases
Child only 450,080 545,035 736,678 767,348
Single adult 643,933 3,717,170 976,133 966,513
Multiple adults, no kids
189,659 1,069,441 246,547 205,101
Single parent 1,229,330 1,313,859 1,792,054 1,876,202
Multiple adults, kids
1,205,198 2,037,918 1,725,902 1,726,367
Total 3,718,200 8,683,423 5,477,314 5,541,531
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Assigning SNAP Monthly Benefit
❧
31
Predicted and actual SNAP monthly benefit by unit type
Case TypeCalifornia administrative sample
Predicted in ACS
Child Only $301 $271
Adult Only 194 168
Mixed (Children and Adults)
462 433
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Assigning Months on SNAP
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Results of SNAP procedures
33
❧In dollars:● Actual SNAP $s in California: $6.4 Billion● Our estimates for self-reporters: $4.2 Billion
● Our imputed estimates: $6.1 Billion
❧In CPM rates:● Decreases by 0.6 percentage points overall
● Decreases by 1.1 percentage points for children
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Correcting for underreporting matters, most for child poverty
34
All persons Children Adults Elderly0
5
10
15
20
25
30
22
24
2119
23
27
23
20
CPM before and after underreporting corrections
CPM
with self-reported SNAP
with self-reported TANF
with both self-reported
Perc
en
t
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Outline
❧Measuring Poverty
❧Data and Overview of Methods
❧CPM Estimates
❧Methods: Unauthorized Immigrants
❧Methods: Modeling SNAP Benefits
❧Ongoing Efforts
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Regional cost of living matters a lot
36
CPM LA Sacramento Fresno0
5
10
15
20
25
30
Statewide poverty rates under various thresholdsAll
Children
Elderly
Regional Thresholds
Perc
en
t in
Povert
y
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Poverty Intensity (2011 CPM)
37SOURCE: Authors’ calculations from the ACS, as augmented.
All persons Children Elderly0
5
10
15
20
25
30 50-99% of poverty line
Under 50% of poverty line
Perc
en
t of
Pers
on
s
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The SPM Movement
❧1994: National Academy of Sciences Panel Recommendations (Citro and Michaels, 1995)
– Augmented resources, including in-kind programs and tax liabilities/credits
– New approach to creating poverty thresholds– Accounting for child care, medical expenses,
commuting costs
❧2011: Census releases first “Research Supplemental Poverty Measure”
– First state-level estimates released last year– Other sub-national efforts: Urban Institute,
Wisconsin IRP, University of Virginia, NY CEO38
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SPM vs. CPM: Family Resources
SPM (CPS)
CPM(ACS)
Earnings, retirement income, Social Security, “other” income
Self reports Self reports
SNAP, TANF Self reports Self reports + imputation
School meals Self reports Imputation
Housing subsidies
Self reports + imputation
Imputation
Taxes Imputation Imputation
Expenses Imputation Imputation
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“Excluded” or Missing Resources in CPM
❧Major “Excluded” resources: – WIC– LIHEAP – In-Home Supportive Services– Summer school meals– Foster care payments, adoptions assistance
payments– Charitable supports
❧Resources we can’t parse out easily: – Unemployment benefits, workers comp – Veterans benefits – Child support, alimony
40
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CPM vs OPM vs SPM
41
All persons Children Adults Elderly0
5
10
15
20
25
30
21.924.3
21.419.3
16.5
23.5
15
9.6
23.8
27.6
22.720.9
CPM OPM SPM
Pe
rce
nt in
Po
vert
y
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Threshold County Tiers
CountiesShare of
state residents
CPM Threshold range
Renters or Owners with a
mortgage
Owners without a
mortgage
Tier 1: lowest
Colusa, Del Norte, Fresno, Glenn, Humboldt, Imperial, Kern, Kings, Lassen, Madera, Merced, Modoc, Siskiyou, Sutter, Tehama, Trinity, Tulare, Yuba
9.2% $23,200-$25,400 $19,500-$20,600
Tier 2: mid-range
Alpine, Amador, Butte, Calaveras, El Dorado, Inyo, Lake, Mariposa, Mendocino, Mono, Nevada, Plumas, Riverside, Sacramento, San Bernardino, San Joaquin, Shasta, Sierra, Stanislaus, Tuolumne, Yolo
21.8 $25,500-$29,500 $20,500-$23,200
Tier 3: highest
Alameda, Contra Costa, Los Angeles, Marin, Monterey, Napa, Orange, Placer, San Benito, San Diego, San Francisco, San Luis Obispo, San Mateo, Santa Barbara, Santa Clara, Santa Cruz, Solano, Sonoma, Ventura
69.0 $29,500-$37,400 $20,700-$25,600
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Poverty and Deep Poverty No Safety Net
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0
10
20
30
40
50
Absent safety net programsActual
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How do safety net programs affect poverty?
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California 2011
Program name Recipients (millions)State/local expenditures on benefits (billions)
Federal expenditures (billions)
Cash-based safety net programs
CalWORKs 1.47 $1.74 $1.70
Supplemental Security Income 1.27 $0.91 $8.23
General Assistance 0.15 $0.40 -
Additional safety net programs included in CPM
CalFresh 3.64 $0.20 $6.53
Earned Income Tax Credit 3.27 (filers) - $7.25
Refundable Child Tax Credit 2.58 (filers) - $4.14
School lunch and breakfast
2.18 (daily participation) $0.16 $1.88
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Imputing and Under-reporting Correction
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Recipients Benefits
ProgramAdmin Recipients (millions)
ACS Self-Reported Recipients (millions)
Recipients after Imputation
Admin Total Benefit (billions)
ACS Self-Reported Benefit (billions)
Benefit after Imputation (billions)
CalWORKs 2.1 0.91 2.3 $3.44 $1.3 $3.8
CalFresh 5.54 3.7 5.47 $6.73 NA $6.1
Earned Income Tax Credit
3.27 (filers) NA 3.36 $7.25 NA $6.09
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Expenses have outsized effect on elderly poverty
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Medical out of pocket
Work expense+Child care
School meals
SSI
Housing subsidies
TANF/GA
SNAP
EITC/CTC
-8 -6 -4 -2 0 2 4 6 8
Effect of excluding individual elements on CPM for the elderly
Percentage Point difference compared to Elderly CPM baseline of 19.3%