First, we examine changes between 1996 and 2011 in the number of households with children who are in extreme poverty—living at $2 or less in income per person per day—in a given month. We draw data from the Survey of Income and Program Participation (SIPP), collected by the U.S. Census Bureau. SIPP interviews are conducted every four months about each individual in sample households, gathering monthly data on demographics, income, and public program participation (5).
Our study period starts in 1996, before states were required to implement the 1996 welfare reform, and before the national unemployment rate fell to a low of 4.0 percent in 2000. The period ends with the most recent available SIPP data, from the beginning of 2011, when the national unemployment rate was roughly 9 percent.
We use household-level monthly income variables (rather than families or sub-families) as the unit of analysis because households include all individuals who live in a single housing unit, thus providing a conservative measure of the incidence of extreme poverty (6). We restrict our sample to households with children under 18 and with household heads under 65, whose household incomes fall at or below the SIPP’s household-specific monthly poverty thresholds, assigned by the U.S. Census Bureau (7). We adjust all values to 2011 dollars using the Consumer Price Index for urban customers. We utilize household-level sample weights in the SIPP to produce nationally-representative estimates.