The Supplemental Poverty Measure: Its Development And Benefits

Supplemental Poverty

The Supplemental Poverty Measure(SPM) is a measure of economic deprivation- having insufficient financial resources to achieve a specified standard of living. The SPM addresses some of the limitations of the official poverty measure, without supplanting it outright. Both the SPM and the official measure determine the poverty status of people and families by comparing their financial resources against the poverty threshold that is valued in dollars.

For both measures, poverty thresholds vary by family size and composition, and families whose resources are lower than the thresholds are considered to be poor. The need as it is used in the thresholds. The financial resources are considered relevant for comparing against the measure of need as specified in the thresholds and family for the purpose of assigning thresholds and counting resources.

How Does Poverty Look Through The Lens Of The Supplemental Poverty Measure?

The demographic profile of the poverty population is different under the Supplemental Poverty Measure than under the official measure. Children have a comparatively lower poverty rate under the SPM and the aged have a comparatively higher poverty rate. Among working-age persons, the SPM poverty rate was lower than the official rate in 2020, although in previous years the reverse was true. These differences can be explained by the SPM’s resources definition.

The Spm can give policymakers the tools to understand how taxes and government programs including noncash programs, affect the poor. It also illustrates how medical expenses and work-related expenses and work-related expenses such as child care can affect a family’s economic well-being. However, the SPM poverty estimates are derived from household survey data and hence are affected by issues such as underreporting of income from government benefits programs, limitations on how tax liabilities and tax benefits can be estimated