1990 Definition of Poverty Status

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NOTE: The IPUMS poverty status variable uses the 1990 Census Bureau definition of poverty thresholds, adjusted for inflation. For all census years, the variable refers to income received for the calendar year preceding the enumeration. The following dollar inflators were used to reflect 1990 purchasing power:

Year 1949 1959 1969 1979 1989 1999 2000 2001
Inflator 5.19 4.26 3.39 1.72 1.00 0.74 0.70 0.69

Poverty Status in 19891

The data on poverty status were derived from income data. Poverty statistics presented in census publications were based on a definition originated by the Social Security Administration in 1964 and subsequently modified by Federal interagency committees in 1969 and 1980 and prescribed by the Office of Management and Budget in Directive 14 as the standard to be used by Federal agencies for statistical purposes.

At the core of this definition was the 1961 economy food plan, the least costly of four nutritionally adequate food plans designed by the Department of Agriculture. It was determined from the Agriculture Department's 1955 survey of food consumption that families of three or more persons spend approximately one-third of their income on food; hence, the poverty level for these families was set at three times the cost of the economy food plan. For smaller families and persons living alone, the cost of the economy food plan was multiplied by factors that were slightly higher to compensate for the relatively larger fixed expenses for these smaller households.

The income cutoffs used by the Census Bureau to determine the poverty status of families and unrelated individuals included a set of 48 thresholds arranged in a two-dimensional matrix consisting of family size (from one person to nine or more persons) cross-classified by presence and number of family members under 18 years old (from no children present to eight or more children present). Unrelated individuals and two-person families were further differentiated by age of the householder (under 65 years old and 65 years old and over).

The total income of each family or unrelated individual in the sample was tested against the appropriate poverty threshold to determine the poverty status of that family or unrelated individual. If the total income was less than the corresponding cutoff, the family or unrelated individual was classified as "below the poverty level." The number of persons below the poverty level was the sum of the number of persons in families with incomes below the poverty level and the number of unrelated individuals with incomes below the poverty level.

The poverty thresholds are revised annually to allow for changes in the cost of living as reflected in the Consumer Price Index. The average poverty threshold for a family of four persons was $12,674 in 1989. (For more information, see Table A below.) Poverty thresholds were applied on a national basis and were not adjusted for regional, State or local variations in the cost of living. For a detailed discussion of the poverty definition, see U.S. Bureau of the Census, Current Population Reports, Series P-60, No. 171, Poverty in the United States: 1988 and 1989.

Persons for Whom Poverty Status is Determined—Poverty status was determined for all persons except institutionalized persons, persons in military group quarters and in college dormitories, and unrelated individuals under 15 years old. These groups also were excluded from the denominator when calculating poverty rates.

Table A
Poverty Thresholds in 1989 by Size of Family and Number of Related Children Under 18 Years
Size of Family Unit Weighted average thresholds Related children under 18 years
None One Two Three Four Five Six Seven Eight
or more
One person (unrelated individual).. $ 6,310
Under 65 years..................... 6,451 $ 6,451
65 years and over.................. 5,947 5,947
Two persons.......................... 8,076
Householder under 65 years.... 8,343 8,303 $ 8,547
Householder 65 years and over 7,501 7,495 8,515
Three persons........................ 9,885 9,699 9,981 $ 9,990
Four persons.......................... 12,674 12,790 12,999 12,575 $ 12,619
Five persons.......................... 14,990 15,424 15,648 15,169 14,798 $ 14,572
Six persons........................... 16,921 17,740 17,811 17,444 17,092 16,569 $ 16,259
Seven persons........................ 19,162 20,412 20,540 20,101 19,794 19,224 18,558 $ 17,828
Eight persons......................... 21,328 22,830 23,031 22,617 22,253 21,738 21,084 20,403 $ 20,230
Nine or more persons................ 25,480 27,463 27,596 27,229 26,921 26,415 25,719 25,089 24,933 $ 23,973

Specified Poverty Levels—Since the poverty levels currently in use by the Federal Government do not meet all the needs of data users, some of the data are presented for alternate levels. These specified poverty levels are obtained by multiplying the income cutoffs at the poverty level by the appropriate factor. For example, the average income cutoff at 125 percent of poverty level was $15,843 ($12,674 x 1.25) in 1989 for a family of four persons.

Weighted Average Thresholds at the Poverty Level—The average thresholds shown in the first column of Table A are weighted by the presence and number of children. For example, the weighted average threshold for a given family size is obtained by multiplying the threshold for each presence and number of children category within the given family size by the number of families in that category. These products are then aggregated across the entire range of presence and number of children categories, and the aggregate is divided by the total number of families in the group to yield the weighted average threshold at the poverty level for that family size.

Since the basic thresholds used to determine the poverty status of families and unrelated individuals are applied to all families and unrelated individuals, the weighted average poverty thresholds are derived using all families and unrelated individuals rather than just those classified as being below the poverty level. To obtain the weighted poverty thresholds for families and unrelated individuals below alternate poverty levels, the weighted thresholds shown in Table A may be multiplied directly by the appropriate factor. The weighted average thresholds presented in the table are based on the March 1990 Current Population Survey. However, these thresholds would not differ significantly from those based on the 1990 census.

Income Deficit—Represents the difference between the total income of families and unrelated individuals below the poverty level and their respective poverty thresholds. In computing the income deficit, families reporting a net income loss are assigned zero dollars and for such cases the deficit is equal to the poverty threshold.

This measure provided an estimate of the amount which would be required to raise the incomes of all poor families and unrelated individuals to their respective poverty thresholds. The income deficit is thus a measure of the degree of impoverishment of a family or unrelated individual. However, caution must be used in comparing the average deficits of families with different characteristics. Apparent differences in average income deficits may, to some extent, be a function of differences in family size.

Mean Income Deficit—Represents the amount obtained by dividing the total income deficit of a group below the poverty level by the number of families (or unrelated individuals) in that group.

Comparability—The poverty definition used in the 1990 and 1980 censuses differed slightly from the one used in the 1970 census. Three technical modifications were made to the definition used in the 1970 census as described below:

  1. The separate thresholds for families with a female householder with no husband present and all other families were eliminated. For the 1980 and 1990 censuses, the weighted average of the poverty thresholds for these two types of families was applied to all types of families, regardless of the sex of the householder.
  2. Farm families and farm unrelated individuals no longer had a set of poverty thresholds that were lower than the thresholds applied to nonfarm families and unrelated individuals. The farm thresholds were 85 percent of the corresponding levels for nonfarm families in the 1970 census. The same thresholds were applied to all families and unrelated individuals regardless of residence in 1980 and 1990.
  3. The thresholds by size of family were extended from seven or more persons in 1970 to eight or more persons in 1980 and 1990.

These changes resulted in a minimal increase in the number of poor at the national level. For a complete discussion of these modifications and their impact, see the Current Population Reports, Series P-60, No. 133.

The population covered in the poverty statistics derived from the 1980 and 1990 censuses was essentially the same as in the 1970 census. The only difference was that in 1980 and 1990, unrelated individuals under 15 years old were excluded from the poverty universe, while in 1970, only those under 14 years old were excluded. The poverty data from the 1960 census excluded all persons in group quarters and included all unrelated individuals regardless of age. It was unlikely that these differences in population coverage would have had significant impact when comparing the poverty data for persons since the 1960 censuses.

Current Population Survey—Because of differences in the questionnaires and data collection procedures, estimates of the number of persons below the poverty level by various characteristics from the 1990 census may differ from those reported in the March 1990 Current Population Survey.

Endnotes:

  1. Excerpted from U.S. Bureau of the Census. 1990 Census of Population and Housing: Public Use Microdata Samples: Technical Documentation. Washington, DC:  U.S. Government Printing Office, 1993, pp. B-28-30.

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