It’s the biggest debate in poverty research. How many people in America live on less than $2 a day? That seems like it ought to be a simple question to answer.
But turns out it’s not.
For much of the last decade, Princeton Sociologist Kathryn Edin and University of Michigan Social Policy Researcher Luke Shaefer have been using survey data to argue that a significant and rising share of American children live in households earning less than two dollars in cash income per person. This data, along with their ethnographic portraits of people living in extreme poverty (in places like Cleveland and Mississippi) formed the basis of their widely acclaimed 2015 book $2 a Day, which was widely cited.
But since their research started circulating, some economists and sociologists have pushed back, arguing that the Edin and Shaefer’s research – which relied on surveys – is underestimating the support very poor households get from welfare programs that provide benefits “in kind,” rather than through cash.
That’s because many people frequently fail to tell surveyors about government programs they benefit from, meaning surveys can underreport assistance. The Supplemental Nutrition Assistance Program (formerly “food stamps”), in particular, is a crucial support for many of these families, and would place most above the two dollars per day line if respondents included them in their responses to surveys.
The most comprehensive response to date – by University of Chicago professor Bruce Meyer, his colleagues Derek Wu and Victoria Mooers, and the Census Bureau’s Carla Medalia – has just been publicly released, and concludes that true two-dollar-a-day poverty, after adjusting the data properly, is extremely rare.
“Our best estimate of the extreme poverty rate,” they write, is 0.11 percent for individuals as of 2011. That implies that about 336,160 people are in extremely poor households, far lower than the couple million children estimated by Edin and Shaefer. The vast majority of those people, they argue, are childless adults, and the extreme poverty rate for parents is close to zero.
Because they used private IRS, Social Security, and other government data, Meyer and his colleagues have more precise estimates of what income people are earning and what benefits they’re collecting than surveys can provide. That gives their estimates a great deal of credibility.