Poverty Module version 31.0 Version History

The Poverty module tabulates the number of families and persons at different levels of poverty under various income definitions. Income (under each definition) is divided by the family's poverty threshold in order to determine the family's income as a percent of poverty. The income definitions are specified through Poverty module "forms" and can be altered as necessary to meet the needs of a particular analysis.

Default income definitions are provided in simulations stored under the Baseline user name. PVxxxx_RawCPS (where xxxx specifies the simulation year) defines income using the income variables reported on the CPS. PVxxxx substitutes TRIM3 simulated variables (where available) into the income definition. In the text below, references to the "typical," "standard," or "default" settings of program rules and forms refer to the standard settings used in these runs.

Additional information about the Poverty module is provided in the following sections:

• Family Composition
• Child Definition
• Determining Family Poverty Threshold
• Family Income
• Summary Tables
• Output Variables
• Comparing TRIM3 "Raw CPS" and Census Bureau Figures
• Working with Poverty Module Forms
• Variables Read Directly From an Input File
• References

Family Composition

The Poverty module uses the broad definition of family -- all related persons in a household are considered part of the same family. This definition includes related subfamilies as part of the household's primary family unless rule TreatmentOfRelatedSubfamily is set to 1. The terms "family" and "unit" are used interchangeably in the documentation, program rules, and variable names.

TRIM3 typically treats unrelated individual children under the age of 15 as members of the household's primary family, under the assumption that the primary family is responsible for the child's care. This is accomplished by setting the program rule TreatmentOfUnrelatedKids to "Unrelated children are included in the primary family."

The treatment of unrelated children can have a noticeable impact on poverty tabulations. The CPS does not report income data on the records of children under the age of 15. Therefore, if unrelated children are treated as one-person families, they will all appear to be poor. By combining unrelated children into the primary family, TRIM3 assumes that the unrelated child enjoys the same standard of living as the primary family, which, in turn, may have a slightly lower standard of living due to support of the unrelated child.

TRIM3 can simulate alternative approaches to the treatment of unrelated children. The Bureau of the Census excludes unrelated children from poverty tabulations entirely. This can be accomplished by setting TreatmentOfUnrelatedKids to "Census method. Unrelated children are treated as if they don't exist." Another option is to count unrelated children as one-person families. This can be accomplished by setting TreatmentOfUnrelatedKids to "Each unrelated child is treated as their own separate 1-person family." Option #4 allows the user to specify that all unrelated individuals under the age of 18 are treated as members of the primary family. And a final option allows all unrelated children under the age of 15 and foster children under 22 to be included in the primary family.

Typically, unmarried partners of the householder (plus any other persons in their families) are treated as separate families. If an unmarried partner has no relatives, then that person is in his/her own single-person family unit. However, program rule TreatmentOfUnmarriedPartners allows users to modify the primary family composition to treat partners of the householder plus any other persons in the partner's family as members of the householder family, or beginning with version 24.0, all cohabiting partners identified through CohabitingPartnerID and their families can be combined into a single poverty unit.

NOTE: When TreatmentOfUnmarriedPartners is set to 1--i.e., a partner of the householder and his/her family members are placed in the householder unit--the Poverty module uses ExpandedRelationship codes of 13 and 14 to identify partners. However, when TreatmentOfUnmarriedPartners is set to 2--i.e., all cohabiting partners are combined into a single poverty unit--the Poverty module uses the variable list program rule CohabitingPartnerID to identify partners. CohabitingPartnerID typically contains a variable by the same name as the program rule that is coded during conversion from the CPS ASEC variable CohabitingPartnerLineNum. There may be a few persons for whom the variable CohabitingPartnerID is 0 when ExpandedRelationship is 13 or 14. However, there are typically several hundred unweighted persons for whom the variable CohabitingPartnerID is 1, yet ExpandedRelationship is something other than 13 or 14. Whereas ExpandedRelationship only identifies the partner of the household reference person, CohabitingPartnerID is coded for each person with a cohabiting partner in the household. In some cases, a person is reported as the partner of the household reference person according to CohabitingPartnerID, but not according to ExpandedRelationship.

Since the Census Bureau defines an unrelated subfamily as a married with kids less than 18 years of age or as an unmarried parent with children under 18, children 18 and above that are unrelated to the household reference person appear to be an "unrelated individiual". If option #1 of TreatmentOfUnrelatedIndividuals is selected, the module uses the variables specified in MotherID and FatherID to identify children of age 18 or above that have parents in unrelated subfamiles and combines them into a single poverty unit with their parents.

Beginning with version 28.0, rule TreatmentOfRelatedSubfamily indicates if related subfamilies are treated as separate family units. Note that if related subfamilies are treated as separate family units, then TreatmentOfUnmarriedPartners and TreatmentOfUnrelatedIndividuals are interpreted as follows. If TreatmentOfUnmarriedPartners specifies that all cohabiting partners are combined into a single poverty unit, then a subfamily member's cohabiting partner will be added to the subfamily member's unit, unless the partner has his or her own family members present. If TreatmentOfUnrelatedIndividuals specifies that parent IDs are used to identify relationships among families and individuals who are unrelated to the household reference person, then a child (identified as unrelated to the household reference person) will be included in the subfamily containing his or her parent, unless the child has other family members present.

Child Definition

The Poverty module needs to be able to identify children in order to determine the family’s poverty threshold (see below) and also for use in the summary tables. The definition of "child" is entered through two standard forms: ChildDefinition and PersonUnder18.

ChildDefinition controls the definition of "child" used in determining the family's poverty threshold and is also used in certain summary tables. By default, ChildDefinition defines a person as a "child" if he or she is under the age of 18, not the household head or spouse, not the head or spouse of an unrelated subfamily, and not a non-family householder or unrelated individual adult (aged 15+).

The form PersonUnder18 defines whether or not a person is included in the count of "children under 18" in certain summary tables. By default, the definition of PersonUnder18 is the same as for ChildDefinition. See the section on summary tables (below) for further details.

Child Definition For Tables

The rule ChildDefinitionForTables allows analysts to specify how "children under 18" and "families with related children" are defined in the summary tables of the Poverty module. This rule does not affect the family composition in the determination of the appropriate poverty threshhold and the calculation of family income, so it consequently has no effect on poverty status.

Determining Family Poverty Threshold

Poverty thresholds vary by family size, the age of the family head, and (optionally) the number of related children under 18 in the family. The program rule PovertyThreshold specifies "weighted average thresholds" that vary by family size and the age of the family head. The program rules DetailedPovertyThreshold_0 - DetailedPovertyThreshold_8 specify detailed poverty thresholds that vary by family size, age of the family head, and the number of related children under the age of 18. Program rule UseDetailedPovertyThresholds indicates whether the weighted average thresholds or the detailed poverty thresholds are used in the simulation. This rule also lets the user specify that a third type of threshold be used--the "Reference Family Threshold" (click here for details).

Family Income

The Poverty module calculates each family's poverty ratio (income divided by the poverty threshold) for the following 12 different definitions of income:

• (definition 0): Cash income before transfers
• (definition 1): Plus social insurance
• (definition 2): Plus means-tested cash transfers
• (definition 3): Plus food and housing benefits
• (definition 4): Less federal taxes
• (definition 5): Plus EITC (and the Additional Child Tax Credit)
• (definition 6): Less state taxes
• (definition 7): Plus state EITC
• (definition 8): Less out-of-pocket expenses (except those below)
• (definition 9): Less health insurance premiums

The different definitions are provided in order to see the cumulative effect of different income sources on the standard poverty definition (cash income before transfers + social insurance + means-tested cash transfers) and also to see the effect of including additional sources of income and expenses under experimental poverty definitions.

It is important to note that even though the Poverty module can calculate and display results for each of the above income definitions, some of the income variables (such as out-of-pocket expenses, health insurance premiums, and work-related expenses) are not available for every year of TRIM3 data. When unavailable, these income variables are treated as having a value of "0."

Each income concept is defined through a Poverty module "form". The names of the forms are listed below, along with the standard income definition for simulations using raw CPS variables and for those incorporating simulated TRIM3 variables.

• CashIncBeforeTransfers




CashIncBeforeTransfers defines cash income before transfers.

• Raw CPS Definition - sum of the following adult-level input variables: TotalWages, Interest, DividendsEstatesOrTrusts, BusinessSelfEmployment, FarmSelfEmployment, GeneralOtherIncome, GovernmentPensions, PrivatePensions, and RentsOrRoyalties.
• Simulated TRIM3 Definition - same as the above Raw CPS Definition, but also includes ImputedCapitalGains (obtained as part of the federal income tax baseline statistical match with the IRS Statistics of Income Public Use File). For the 1993 baseline, AdjustedInterest and AdjustedDividends are used in place of Interest and DividendsEstatesOrTrusts. AdjustedInterest and AdjustedDividends attempt to correct for the underreporting of interest and dividend income on the CPS.



• SocialInsurance




SocialInsurance specifies income from transfer programs that are not means-tested.

• Raw CPS Definition - sum of the following adult-level input variables: UnemploymentCompensation, WorkersCompensation, VeteransPayments, SocialSecurityOrRrr
• Simulated TRIM3 Definition - same as the Raw CPS Definition.



• MeansTestedCashTransfer




MeansTestedCashTransfer specifies cash income from means-tested transfer programs.

• Raw CPS Definition - sum of the following adult-level input variables: OtherPublicAssistance, SSI, and TANF.
• Simulated TRIM3 Definition - sum of the adult-level input variable OtherPublicAssistance, TRIM3 simulated SSI variable AnnualSSIBenefitsReceived, and TRIM3 simulated TANF variable AnnualBenefitsReceived.



• FoodAndHousingBenefits




FoodAndHousingBenefits specifies the value of SNAP and school lunch benefits, energy assistance, and public and subsidized housing.

• Raw CPS Definition - sum of household-level input variables EnergyAssistanceIncome and FoodStampsValue and family-level input variables HousingSubsidyMarketValue and NutritionMarketValue.
• Simulated TRIM3 Definition - sum of household-level input variable EnergyAssistanceIncome, family-level input variable NutritionMarketValue, TRIM3 simulated SNAP variable AnnualBenefitsReceived, and TRIM3 simulated subsidized housing variable AnnualSubsidyReceived.


Each family receives a share of the household's EnergyAssistanceIncome, FoodStampValue, and AnnualSubsidyReceived. The value assigned to a particular family is pro-rated by the number of people in the family. HousingSubsidyMarketValue is a monthly value and so is multiplied by twelve to obtain an annual amount.



• FederalTaxes




FederalTaxes specifies federal income taxes (not counting refundable credits) and payroll taxes.

• Raw CPS Definition - sum of adult-level variables FederalTaxLiability and FicaDeduction.
• Simulated TRIM3 Definition - sum of the TRIM3 simulated PayrollTax variables WorkerOASDHI, SelfEmpOASDHI, and WorkerFedRetireTax and TRIM3 simulated federal income taxes excluding the EITC and the additional child tax credit (Tax + EarnedIncomeTaxCredit + AdditionalChildTaxCredit). AdditionalChildTaxCredit is only relevant beginning with the 1998 federal income tax baseline.



• EITC




The EITC form specifies refundable tax credits.

• Raw CPS Definition - adult-level variable EitcAmount
• Simulated TRIM3 Definition - sum of the TRIM3 simulated federal income tax variables EarnedIncomeTaxCredit and AdditionalChildTaxCredit. AdditionalChildTaxCredit is only relevant beginning with the 1998 federal income tax baseline.



• OutOfPocket




The purpose of the OutOfPocket form is to specify out-of-pocket expenses (except those added in the income definitions below).

At the time of writing, there are no CPS or TRIM3 simulated variables for out-of-pocket expenses. Therefore, this form is set to zero.




• Premiums




The purpose of the Premiums form is to specify private (group and non-group) health insurance premiums.

• Raw CPS Definition - at the time of writing, there are no CPS variables for the amount of a person's health insurance premiums, so this form is set to zero.
• Simulated TRIM3 Definition - sum of the EmpSponsoredHealthIns variable AnnualEsiWorkerPremium and the PvtNonGroupIns variable AnnualPNGPremiumPaid. One or both of these TRIM3 variables may be unavailable for a particular year. If neither variable is available, then the Premiums form is set to zero.



• OutOfPocketChildCare




The purpose of OutOfPocketChildCare is to specify out of pocket child care expenses.

• Raw CPS Definition - at the time of writing, no CPS variable indicates the amount of a person's child care expenses, so this form is set to zero.
• Simulated TRIM3 Definition - OutOfPocketChildCare is set equal to the ChildCareExp variable AnnualChildCareExpense, in years where available, or to the annual sum of the monthly ChildCareExp variable ChildCareExpense. Prior to the 1996 baseline, OutOfPocketChildCare is set equal to ChildCareExpenses (a variable that was imported into TRIM3 from the TRIM2 model).



• OtherWorkRelatedExp




At the time of writing, there are no CPS or TRIM3 simulated variables for other work related expenses, so this form is set to zero.

Summary Tables

Starting with version 27.0, the user can specify through rule SummaryTableType if summary tables are either based on cash income (income definition #2) or expanded income (income definition #11).

Summary tables based on cash income

If the user selects to produce tables based on the cash income definition (SummaryTableType = 1), the following three groups of summary tables will be part of the module's standard output:

Income Definition Tables

These tables present poverty measures based on the first three definitions of income described above.

• (definition 0): Cash income before transfers
• (definition 1): Plus social insurance
• (definition 2): Plus means-tested cash transfers

• YB1: Number of Persons By Poverty Status Based on Total Cash Income
• YB2: Number of Families By Poverty Status Based on Total Cash Income
• YB3: Anti-Poverty Effectiveness of Cash Transfers, Person-level
• YB4: Anti-Poverty Effectiveness of Cash Transfers, Family-level
• YB5: Anti-Poverty Effectiveness of Cash Transfers, Poverty Gap Results
• YB6: Anti-Poverty Effectiveness of Cash Transfers, Low Income Gap Results

• Persons are considered "elderly" if 65 or over.
• Heads of families are considered "single" if they meet the definition given by the form SingleStatus. By default, a person is considered single if he or she is not married with spouse present (not MaritalStatus=2).
• Persons are placed in the "Children Under 18" category if they meet the definition given in the form PersonUnder18 (note that they do not have to meet the definition given in the form ChildDefinition). However, ChildDefinition is used when determining if a family has children.
• The columns marked with headings
  • Persons in families with related children
  • Persons in families with elderly heads
  • Persons i families other than 1 and 2
  are mutually exclusive, but none of the other columns are.
• For the anti-poverty effectiveness tables, the level of poverty which is considered "poor" is given by the program rule PovertyLimit, which can be set to any desired percent-of-poverty.

State Tables

The state tables present state-level poverty measures for various demographic groups.

• YS1: All Persons
• YS2: Children
• YS3: Persons Under 18
• YS4: Persons 18-64
• YS5: Non-Elderly Persons
• YS6: Elderly Persons
• YS7: Persons in Single-Head Families, Other Adults Present
• YS8: Persons in Single-Head Families, No Other Adults
• YS9: All Families
• YS10: Families With Children
• YS11: Non-Elderly Families

Although fairly self-explanatory, the following notes may help in understanding the tables:

• Persons are considered "elderly" if 65 or over.
• Persons are included in the table YS2 ("Children") if they meet the definition given in the form PersonUnder18 and are not unrelated kids excluded due to the option specified in rule TreatmentOfUnrelatedKids. (Note that they do have to meet the definition given in the form ChildDefinition. However, ChildDefinition is used when determining if a family has children.)

Characteristics Tables

These tables also use income definition #2 to present poverty measures, but at a national rather than state level.

• YC1: Poverty Status, All Persons
• YC1G: Poverty Status, All Persons by Gender
• YC2: Poverty Status, Persons < 18
• YC2G: Poverty Status, Persons < 18 by Gender
• YC3: Poverty Status, Persons 18-64
• YC3G: Poverty Status, Persons 18-64 by Gender
• YC4: Poverty Status, Persons 65+
• YC4G: Poverty Status, Persons 65+ by Gender
• YC5: Number of Poor by Age and Family Characteristics

Summary tables based on expanded income

If the user selects to produce tables based on the expanded income definition (SummaryTableType = 2), the following four groups of summary tables will be part of the module's standard output:

Income Definition Tables

These tables present poverty measures based on the first twelve definitions of income described above. The following tables are part of the standard output:

• B1: Number of Persons by Poverty Status Under Different Income Definitions
• B2: Number of Persons by Poverty Status Under Different Income Definitions
• B3: Number of Families By Poverty Status Under Different Income Definitions
• B4: Number of Families By Poverty Status Under Different Income Definitions
• B5: Anti-Poverty Effectiveness of Cash and Near Cash Transfers, Numbers of Poor Persons
• B6: Anti-Poverty Effectiveness of Cash and Near Cash Transfers, Person-Level Poverty Rate
• B7: Anti-Poverty Effectiveness of Cash and Near Cash Transfers, Number of Families
• B8: Anti-Poverty Effectiveness of Cash and Near Cash Transfers, Family-Level Poverty Rate
• B9: Anti-Poverty Effectiveness of Cash and Near Cash Transfers, Poverty Gap Results
• B10: Anti-Poverty Effectiveness of Cash and Near Cash Transfers, Low Income Gap Results

• Persons are considered "elderly" if 65 or over.
• Heads of families are considered "single" if they meet the definition given by the form SingleStatus. By default, a person is considered single if he or she is not married with spouse present (not MaritalStatus=2).
• Persons are placed in the "Children Under 18" category if they meet the definition given in the form PersonUnder18 (note that they do not have to meet the definition given in the form ChildDefinition). However, ChildDefinition is used when determining if a family has children.
• The columns marked with headings
  • Persons in families with related children
  • Persons in families with elderly heads
  • Persons in families other than 1 and 2
  are mutually exclusive, but none of the other columns are.
• For the anti-poverty effectiveness tables, the level of poverty which is considered "poor" is given by the program rule PovertyLimit, which can be set to any desired percent-of-poverty.

State Tables

The state tables present state-level poverty measures for various demographic groups.

• S1: All Persons
• S2: Children
• S3: Persons Under 18
• S4: Persons 18-64
• S5: Non-Elderly Persons
• S6: Elderly Persons
• S7: Persons in Single-Head Families, Other Adults Present
• S8: Persons in Single-Head Families, No Other Adults
• S9: All Families
• S10: Families With Children
• S11: Non-Elderly Families

Although fairly self-explanatory, the following notes may help in understanding the tables:

• Persons are considered "elderly" if 65 or over.
• Persons are included in the table S2 ("Children") if they meet the definition given in the form PersonUnder18 and are not unrelated kids excluded due to the option specified in rule TreatmentOfUnrelatedKids. (Note that they do have to meet the definition given in the form ChildDefinition. However, ChildDefinition is used when determining if a family has children.)

Characteristics Tables

These tables also use income definition #11 to present poverty measures, but at a national rather than state level.

• C1: Poverty Status, All Persons
• C1G: Poverty Status, All Persons by Gender
• C2: Poverty Status, Persons < 18
• C2G: Poverty Status, Persons < 18 by Gender
• C3: Poverty Status, Persons 18-64
• C3G: Poverty Status, Persons 18-64 by Gender
• C4: Poverty Status, Persons 65+
• C4G: Poverty Status, Persons 65+ by Gender
• C5: Number of Poor by Age and Family Characteristics
• C6: Poverty Status based on Expanded Income, Persons < 18
• C7: Poverty Status based on Characteristics of Adults in the Household, Persons < 18

Program rule ReportedDifficulty contains the variables that are used to indicate whether a person reports a disability or limitation, and ImmigrantStatusDefinition is used to indicated whether the citizenship rows are based on the reported variable Citizenship or on the imputed variable CorrectedCitizenship.