The New Demography of Poverty: The Wisconsin Poverty Measure and Effects of Federal and State Policies in Wisconsin


This paper describes efforts to develop a more comprehensive and up-to-date measure of poverty in Wisconsin as a model for other states to follow. The Wisconsin model uses American Community Survey data to measure the level, depth, and trends in poverty and the effects on poverty of such programs as the Supplemental Nutrition Assistance Program (SNAP, formerly food stamps) and refundable tax credits, as well as out-of-pocket health care costs and work-related expenses including child care. In many ways, the Wisconsin measure, which was unveiled in September 2010, is a preview of the forthcoming federal Supplemental Poverty Measure (SPM). However, the two measures differ in important respects. After a brief review of methodology underlying the Wisconsin measure, this paper focuses on a comparison of poverty across two vulnerable demographic subgroups, children and the elderly, and analyzes how specific federal and state policies affect low-income children and elderly in Wisconsin. Poverty rates in 2008 under the Wisconsin Poverty Measure are higher than official poverty rates for both children and the elderly, with child poverty rising from 13.3 percent to 13.6 percent and elderly poverty rising much more, from 7.1 percent to 10.4 percent. Our analysis suggests that child poverty would be even higher but for the Earned Income Tax Credit and SNAP benefits, and that expansions in benefits under the American Recovery and Reinvestment Act of 2009 played a role in mitigating the rise in child poverty during the recession.