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Here's why poverty should be measured by more than income

Nov 29, 2016

When people talk about poverty, the conversation typically revolves around the economic condition of a household. Even here at State of Opportunity, our definition of poverty never strays too far from a discussion of income.

For example, if a family of four earns less than $24,000 a year, they live below the poverty line. If they make more than $24,000, they live above the poverty line.

Simple, right?

But according to a new study from Georgia Tech, poverty should be measured by more than income.

The study, "Multi-Dimensional Deprivation in the U.S.," found that there are multiple dimensions of poverty, and while many Americans may not fall below the poverty line, they still face multiple deprivations that could affect them just as adversely. Lead researcher Shatakshee Dhongde is an economist at Georgia Tech. She said in a press release:

This study approaches poverty in a new way. We tried to identify what is missing in the literature on poverty, and measure deprivation in six dimensions: health, education, standard of living, security, social connections, and housing quality. When you look at deprivation in these dimensions, you have a better picture of what is really going on with households, especially in developed countries like the United States.

So, maybe you live above the poverty line, but you lack education, can’t afford health insurance, or suffer from mental illness.

Researchers analyzed U.S. Census Bureau data from the onset of the Great Recession in 2008 to 2013. They found nearly 30% of individuals with incomes slightly above the poverty threshold experienced deprivations. And only 6% of people who were income poor were also multi-dimensionally deprived. According to the press release:

In order for a respondent to qualify as having multi-dimensional deprivation, he or she had to have more than one indicator of deprivation, such as lack of education and severe housing burden. While research on deprivation has been growing in recent years in developing countries, this is the first time such an approach has been taken with poverty in the United States. In this country, the study found the greatest deprivation in education, housing and health insurance, and the greatest prevalence of deprivation was in the southern and western U.S.

Jim Reese is president of Atlanta Mission, which serves people in Georgia with shelters, transitional housing and job training. He told WABE the idea of what it means to be poor often gets over-simplified. Reese said:

Well, I think one, we tend to think of homelessness and the whole issue of poverty based on the number of people we see on the street. It’s easier to give you a place to live, and to give you, quote, 'a job,' and then if you lose your job, we all blame you because you lost your job. If you’re emotionally not healthy, if you’re socially not—have any relationships-guess what? You’re going to lose your job.

Researchers say the findings of the study show a need to go beyond income-based statistics when categorizing poverty and making policy decisions. Dhongde said:

From our analysis there are several policy recommendations that can be made. First, significant reduction of deprivation can be attained by implementing new policies related to health insurance coverage, such as through the Affordable Care Act; improving high school completion rates, especially among Hispanics; and constraining housing costs. By looking at a broader set of criteria than just income, policy decisions are clearer and solutions can be more easily identified.

You can read the full study, "Multi-Dimensional Deprivation in the U.S.," here.

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