Income poverty and material hardship: How strong is the association?☆
Introduction
Researchers have at their disposal a number of measures designed to capture the well-being of people facing economic deprivation of one sort or another. Among the most widely used measures is poverty, which often gauges shortfalls in family or household income available to meet basic needs in a given time period. Past research using longitudinal data has revealed that people experience poverty in very different ways: many people are poor for short periods of time while others are mired in poverty; some have incomes just below the poverty line while others are in “extreme” poverty; some experience a single bout of poverty while others have multiple spells (Proctor and Dalaker, 2003, Iceland, 2003a, Bane and Ellwood, 1986, Gottschalk et al., 1994, Rank and Hirschl, 2001, Stevens, 1999).
Some researchers, however, have argued that poverty should be viewed as more than merely the lowness of income, as income only indirectly captures people's capabilities and material deprivation (e.g., Sen, 1999, Brady, 2003). Other, perhaps more direct, measures of deprivation fall under the general rubric of well-being measures, where respondents are asked about their well-being along a variety of dimensions, including housing and neighborhood conditions, ability to pay bills, food security, and possession of basic consumer durables.
Past research has shown only a moderate association between poverty and hardship measures (Mayer and Jencks, 1989, Mayer and Jencks, 1993, Mayer, 1995, Rector et al., 1999, Beverly, 2000, Boushey et al., 2001, Perry, 2002, Bradshaw and Finch, 2003). This is not wholly surprising since these measures are, by design, meant to capture different dimensions of well-being. Poverty is usually a measure of transitory income deprivation, while reports of some types of material hardship (such as neighborhood problems) are likely to be more affected by longer-term income, while others (such as reports of food insecurity) are more affected by very short-term income flows.
This paper tests the extent to which indicators of hardship are associated with income poverty. Using data from the 1996 Survey of Income and Program Participation (SIPP), a longitudinal survey that followed respondents for 4 years, we explore how reports of material hardship varied by poverty spell length, timing, depth, and frequency of occurrence. We find that some measures of material hardship are indeed significantly associated with income poverty and by variations in its severity, and that the association is considerably stronger for some measures of material hardship than others. In addition, we find that short-term poverty's association with hardship is stronger than what would be predicted from its impact on longer-term income flows.
Section snippets
Poverty measurement
Poverty is usually defined and operationalized by researchers in terms of income deprivation. The “official” U.S. poverty measure – the focus of this analysis – has two components: poverty thresholds and the definition of family income that is compared to these thresholds. Basically, the thresholds were originally devised in the 1960s to represent the cost of a minimum diet multiplied by three to allow for expenditures on other goods and services. The thresholds vary by family size and
Material hardship
The current official poverty measure has been criticized for ignoring factors that are increasingly critical to the material well-being of families. For example, the measure of income in the official measure does not take into account factors such as the cost of work, the effect of health status, the cost of health care, taxes, non-cash benefits, and geographic differences in cost of living, among other issues (National Research Council, 1995, Ruggles, 1990, Short et al., 1999, Iceland, 2003b).
Association between material hardship and poverty
Material hardship is only moderately correlated with income and poverty in the U.S. (Mayer and Jencks, 1989, Mayer and Jencks, 1993, Mayer, 1995, Rector et al., 1999, Beverly, 2000, Boushey et al., 2001, Perry, 2002, Bradshaw and Finch, 2003). On the one hand, poor people are more likely than non-poor people to report a variety of material hardships. For example, Boushey et al. (2001) reported that while about 13% of respondents under 200% of the poverty level reported not having enough food to
Data
This research uses the 1996 panel of the Survey of Income and Program Participation (SIPP), a household survey conducted in the U.S. (U.S. Census Bureau, 2001). Each interview in the panel consisted of a core interview, with standard questions on demographics, labor force and income, and a topical module interview, with questions on topics that changed from one interview (wave) to the next. Interviews (waves) are conducted every 4 months. The eighth wave of the 1996 panel, in the field in
Results
Table 2 shows the distribution of poverty according to several measures of its severity, and the relation of these measures to types of material hardship. Roughly two-thirds of U.S. families did not experience at least 2 consecutive months of poverty during their time in the panel survey, which, for this analysis, extended for 32 months from early 1996 to autumn of 1998 when the well-being topical module was administered. The percentage of families who were never poor is slightly lower when
Conclusion
At the outset of this research, we were interested in knowing how different experiences of poverty over time were associated with the experience of material hardship. We found that the length of time spent in poverty, the number of spells experienced and the depth of poverty in monetary terms all had strong associations with hardship. Hardship was also more common among families with more recent spells of poverty than among those who experienced spells earlier in time or not at all. No single
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This paper is released to inform interested parties of ongoing research and to encourage discussion. The views expressed on technical and operational issues are those of the authors and not necessarily those of the U.S. Census Bureau.