On January 13, 2021, a government task force comprising 11 federal agencies, co-chaired by University of Chicago Harris School of Public Policy Professor Bruce Meyer, released its final report, recommending that the U.S. Census Bureau and the Bureau of Labor Statistics produce consumption measures and expanded income measures to supplement the government’s Official Poverty Measure (OPM).

Harris Public Policy Professor Bruce Meyer
Harris Public Policy Professor Bruce Meyer

“The new poverty measures will offer a more accurate portrayal of poverty in America and help researchers build evidence on how well-being has changed over time and the effects of programs and policies aimed to help those who are struggling the most,” said Professor Meyer, the McCormick Foundation Professor of Economics at Harris Public Policy.

Formed in 2019 by the Chief Statistician of the United States, who appointed Professor Meyer to his role as co-chair, the Interagency Technical Working Group on Evaluating Alternative Measures of Poverty was tasked with evaluating possible alternatives to the OPM, which contains broadly recognized flaws and has undergone no substantive changes since it was created in the 1960s. The group convened 46 times for more than 100 hours to evaluate options and put forth recommendations.

Those recommendations include:

  • Extending the federal government’s current income measure—which takes only pre-tax cash income into account—to include some in-kind benefits and account for taxes and tax credits, and to integrate administrative and survey data to improve the accuracy of income measures.
  • Introducing a consumption-based resource measure by tracking real household spending on goods and services, which may more directly reflect all the resources available to a family.
  • Seeking additional expert input and research to further improve poverty measurement and to appropriately determine poverty thresholds.

“Professor Meyer’s innovative work has helped policymakers better understand the limitations of official poverty measures and paints a more complete picture of poverty in America," said Katherine Baicker, dean and Emmett Dedmon Professor at Harris. "His influential research and his leadership on the interagency task force exemplify the real-world impact in crucial policy areas that Harris scholars strive to make.”

Some of the Working Group’s main recommendations build on research by Meyer and James Sullivan, the Gilbert F. Schaefer College Professor of Economics at the University of Notre Dame. The two have conducted research on consumption- and income-based poverty for more than 15 years. This research has led to new measures of poverty that rely on household spending data, which families tend to report more accurately than income and which better reflects their material circumstances.

Notre Dame Professor James Sullivan
Notre Dame Professor James Sullivan

Sullivan and Meyer’s research shows that improved measures of poverty indicate considerable progress over the past four decades (prior to the start of the Covid-19 pandemic). They estimate that poverty declined sharply between 1980 and 2019, which contrasts with Census Bureau statistics that show scant progress. More recently, the two have pioneered near real-time estimates of income poverty during the pandemic available at http://povertymeasurement.org/. These measures have allowed policymakers to assess the situation of the worst off during the pandemic and the impact of the relief acts.

The Working Group also heavily relied on research by Meyer and Nikolas Mittag, a former Ph.D. student at Harris and now a Professor at CERGE-EI in Prague. This work emphasized the under-reporting of many welfare programs in household surveys and the large impact this underreporting has on estimates of poverty.

“We need accurate information about people in poverty to understand the true effect of these programs on their well-being—what’s working, for whom, and by how much," said Meyer. "The new poverty measures recommended by the Working Group will give us this clearer picture of domestic poverty so programs and policies designed to combat it can direct their resources for maximum impact.”

Professor Meyer’s work is supported by a group of private foundations and the National Science Foundation, with particular help from the Menard Family Foundation.