Definition of Poverty in the IPUMS Samples

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Poverty data in the IPUMS are based on a definition established by the Social Security Administration in 1964 and subsequently modified by Federal interagency committees in 1969 and 1980. The Office of Management and Budget's (OMB) Directive 14 prescribes this definition as the official poverty measure for federal agencies to use in their statistical work.

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. For a more thorough description of how poverty thresholds were created and changed over time, see Gordon M. Fisher's The Development and History of Poverty Thresholds.

The income cutoffs used to determine the poverty status of families and unrelated individuals include 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.

The federally established poverty thresholds are revised annually to allow for changes in the cost of living as reflected in the Consumer Price Index (CPI-U). The IPUMS relies on the poverty matrix from 1989, making necessary adjustments to other years' data to account for inflation. For each year, IPUMS multiplies total family income (FTOTINC) by the factors in Table 2 (at the bottom of this page) and then uses the resulting adjusted total family income to calcuate poverty status.

The poverty thresholds are the same for all parts of the country; they are not adjusted for regional, state, or local variations in the cost of living. For a detailed discussion of the poverty definition, see U.S. Census Bureau, Current Population Reports, Series P-60, No. 210, Poverty in the United States: 1999. For the poverty thresholds for the 1989 matrix, which IPUMS uses to calculate poverty, see below.

Table 1: Poverty Thresholds by Size of Family and Number of Children Under 18 Years, 1989 dollars (Average of the 12 Monthly Values)

Number of people	Number of related children
	None	One	Two	Three	Four	Five	Six	Seven	Eight plus
One person under 65 years	6,451
One person, 65 years or older	5,947
Two people, RP under 65 years	8,303	8,547
Two people, RP 65 years or older	7,495	8,515
Three people	9,699	9,981	9,990
Four people	12,790	12,999	12,575	12,619
Five people	15,424	15,648	15,169	14,798	14,572
Six people	17,740	17,811	17,444	17,092	16,569	16,259
Seven people	20,412	20,540	20,101	19,794	19,224	18,558	17,828
Eight people	22,830	23,031	22,617	22,253	21,738	21,084	20,403	20,230
Nine or more people	27,463	27,596	27,229	26,921	26,415	25,719	25,089	24,933	23,973

Source: U.S. Census Bureau, Current Population Reports, Series P-60, No. 171, Poverty in the United States: 1988 and 1989.

Table 2: Adjustment Factors for Converting Total Family Income (FTOTINC) to 1989 dollars

Year	Multiplier
2023	0.407
2022	0.424
2021	0.458
2020	0.479
2019	0.485
2018	0.494
2017	0.506
2016	0.517
2015	0.523
2014	0.524
2013	0.532
2012	0.540
2011	0.551
2010	0.569
2009	0.578
2008	0.576
2007	0.598
2006	0.615
2005	0.635
2004	0.656
2003	0.674
2002	0.689
2001	0.700
2000	0.718
1999	0.744
1989	1.00
1979	1.722
1969	3.379
1959	4.261
1949	5.210

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