Association for Public Policy Analysis & Management

Since the inception of the official poverty measure (OPM) in the 1960s, several anti-poverty programs, such as the Supplemental Nutrition Assistance Program and the Earned Income Tax Credit, have been created or expanded which provide resources not accounted for in the OPM. This has led some to question the validity of the OPM and push for alternative measures of poverty such as the Census Bureau’s Supplemental Poverty Measure (SPM), which accounts for non-cash benefits, differences in cost of living, and necessary expenses (including taxes, childcare, work and medical expenses). However, questions remain as to how both measures capture material well-being and correlate with other aspects of disadvantage, such as food security, wealth, and health, especially for individuals who are classified in poverty based on one measure but not the other. This paper will provide the first estimates from the redesigned 2014 Panel of the Survey of Income and Program Participation (SIPP) to explore how the OPM compares to the SPM in regards to capturing material well-being. Using the SIPP’s robust measures of material well-being, augmented with additional administrative sources, we examine how net worth, health outcomes (including mortality), food security, child development, and lifetime earnings (captured using the Summary Earnings Record and Detailed Earnings Record) vary for those in the OPM and SPM poverty. This analysis will improve our understanding of the relationships between choice of poverty measure and material well-being.