How are at risk children faring ?
The SPM vs. the OPM
for the April 19th PAA Webinar
by Tim Smeeding
Professor of Public Affairs and Economics
Director, IRP
Research | Training | Policy | Practice
Explanation of how poor children and families are
doing comparing the OPM and SPM: an outline
• Why the Supplemental Poverty Measure (SPM) is a
better measure of poverty than the official poverty
measure (OPM)
• Four different sets of child poverty outcomes and
trends in each
• How programs specifically designed to help the
poor have changed
• Some evidence on how one program SNAP ( “food
stamps” ) effects the level and trend in child poverty
• Bottom Lines
Why the SPM is a better measure of
poverty than the OPM
• The SPM does a much better job of measuring the
anti poverty effects of the major tax-benefit
programs aimed at poor families with children ,
while also considering work related expenses,
geographic cost of living differences and other
factors which affect child poverty
• Noncash programs to help the poor have grown
enormously since 20o0 and especially during the
recession while major cash programs have not
• Without in kind programs and ARRA expansions in
same, poor children would be MUCH worse off
Four different child poverty trends :
2000-2010
• Official (OPM) an absolute measure ‘anchored’ in
1960’s , adjusted for price changes only since then
• SPM which is available only for 2009 and 2010
Two earlier variants of the SPM which follow the same
NAS principals and give us 10 year trends :
• NAS-CE experimental poverty measure adjusted
according to average actual expenses for low
income persons in every year
• NAS-CPI experimental poverty measure ‘anchored’
at the 2000 level of low income family expenses and
adjusted for prices only since 2000
Level and Trend in Child Poverty 2000-2010
24.0%
22.0%
Recession Years
Children-Official
Children-NAS CPI updated
Children-NAS CE updated
Children-SPM
20.0%
18.0%
16.0%
14.0%
12.0%
10.0%
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
What do we see?
• Poverty amongst children is both at its highest level
and increases the most under the OPM (which
reflects before tax cash benefits only)
• Child poverty goes up more slowly, is flat, or even
falling in the Great Recession under both NAS
measures and for the new SPM
• The major reason for the differences between the
OPM and the other measures is the growth and
importance of noncash benefits and refundable tax
credits as instruments for fighting child poverty
A note of caution--child poverty has
not gone away
• The measures above are sensitive to where the
poverty line is drawn and how it is drawn
• But under all four variants, child poverty is still
above the overall national average poverty rate ,and
over 18 percent using the new SPM
• But again noncash and refundable tax credit
programs ,and increases in same under the
American Recovery and Relief Act, have done a very
good job in preventing child poverty from exploding
as with the OPM
How programs to help poor
children have changed
Annual Expenditures, Means-Tested Programs
(Billions of 2010 Dollars)
SNAP and deep child poverty from NPC
How SNAP has affected child poverty from USDA
Bottom Lines
• The best answer to child poverty are good jobs that
pay parents well enough to maintain their economic
independence and keep their families from poverty
• But the SPM shows that government programs work
to reduce poverty in recessions and when full-time
jobs--even bad ones-- are not available to parents
• We must continue the SPM measure to monitor how
at-risk children are being affected by successful public
programs aimed at reducing child poverty
Thanks to IRP’s Poverty Research
Sponsors and Co-Analysts
• Department of Health and Human Services (
DHHS) - Assistant Secretary for Planning and
Evaluation (ASPE)
• U.S. Bureau of Census
• Russell Sage Foundation
• MacArthur Foundation
And the Wisconsin Poverty Measure Team : Julia
Isaacs,Yiyoon Chung, Katherine Thornton