'Inability to Be Self-Reliant' as an Indicator of U.S. Poverty: Measurement, Comparisons, and Implications
Levy Economics Institute Working Paper No. 247
46 Pages Posted: 17 Sep 1998
Date Written: August 1998
The trend in national policy over the past two decades has emphasized self reliance and a smaller role for government in society. Given this ideological shift, the Official poverty measure, which is based on the premise that all families should have sufficient income from either their own efforts or government support to boost them above a family-size-specific threshold, appears to have less policy relevance now than in prior years. In this paper we present a new concept of poverty, Self-Reliance poverty, which is based on the ability of a family, using its own resources, to support a level of consumption in excess of needs. This concept closely parallels the "capability poverty" measure that has been proposed by Sen. We use this measure to examine the size and composition of the Self-Reliant poor population from 1975 to 1995. We find that Self-Reliance poverty has increased more rapidly over the 1975-95 period than has Official poverty. We find that families commonly thought to be the most impoverished ?those headed by minorities, single women with children, and individuals with low levels of education? have the highest levels of Self-Reliance poverty. However, these groups have also experienced the largest increases in this poverty measure. Families largely thought to be economically secure, specifically those headed by whites, men, married couples, and highly educated individuals, while having the lowest levels of self-Reliance poverty, have also experienced the largest increases in that measure. We speculate that the trends in Self-Reliance poverty stem largely from underlying trends in the United States economy, in particular the relative decline of wage rate for whites and men, and the rapidly expanding college-educated demographic group.
JEL Classification: H53
Suggested Citation: Suggested Citation