Measuring poverty using the Supplemental Poverty Measure in the Panel Study of Income Dynamics, 1998 to 2010

The Supplemental Poverty Measure (SPM) was recently introduced by the U.S. Census Bureau as an alternative measure of poverty that addresses many shortcomings of the official poverty measure (OPM) to better reflect the resources households have available to meet their basic needs. The Census SPM is available only in the Current Population Survey (CPS). This paper describes a method for constructing SPM poverty estimates in the Panel Study of Income Dynamics (PSID), for the biennial years 1998 through 2010. A public-use dataset of individual-level SPM status produced in this analysis will be available for download on the PSID website. Annual SPM poverty estimates from the PSID are presented for the years 1998, 2000, 2002, 2004, 2006, 2008, and 2010 and compared to SPM estimates for the same years derived from CPS data by the Census Bureau and independent researchers. We find that SPM poverty rates in the PSID are somewhat lower than those found in the CPS, though trends over time and impact of specific SPM components are similar across the two datasets.