Today the U.S. Census Bureau released new findings from its National Experimental Well-Being Statistics (NEWS) project.
NEWS is a research-driven project to improve how the Census Bureau measures income and poverty. NEWS does this by exploring new methods for creating these economic “well-being” indicators by looking back at data collections from previous years, using a wider range of data sources, and applying new advanced analysis techniques.
For Version 2.0, the Census Bureau had access to a more comprehensive set of data sources, including administrative data, to produce pretax income estimates for the vintage year 2018. The expanded set of estimates include:
- Money income – Income received on a regular basis (exclusive of certain money receipts such as capital gains) before payments for personal income taxes, social security, union dues, Medicare deductions, etc. This was the onlyincome measure released in Version 1.0.
- Disposable income – Money income minus taxes plus tax credits, for both state and federal taxes and credits.
- Disposable income plus noncash benefits – This adds the value of noncash benefits, including:
- Housing assistance.
- Supplemental Nutrition Assistance Program (SNAP).
- Special Supplemental Nutrition Program for Women, Infants, and Children (WIC).
- National School Lunch Program (NSLP).
- Energy assistance.
Key takeaways for NEWS’ Version 2.0 of income and poverty experimental estimates are:
- 2018 income was higher than the official estimates:
- 10.3% higher at the 25th percentile.
- 6.1% higher at the median.
- 3.2% higher at the 75th percentile.
- 2018 poverty was lower than in the estimates released in 2019, both overall and for most subgroups:
- For the official poverty measure (OPM):
- NEWS estimate: 10.3%
- Official estimate: 11.8%
- This is a difference of 1.5% or nearly 5 million people.
- 2018 Supplemental Poverty Measure (SPM) are:
- NEWS estimate:10.4%
- Official estimate: 12.8%
- This is a difference of 2.4% or nearly 8 million people.
- For the official poverty measure (OPM):
Differences between these newly released experimental estimates for vintage year 2018 and official estimates released September 10, 2019 stem in part from people providing inaccurate survey answers (sometimes unintentionally); greater access to administrative and other data providing additional information about people’s income; and updated methodologies. Greater access to 2018 administrative data along with improved methodologies can help validate or, in some cases, correct people’s responses.
The NEWS project is an experimental data product designed to explore, research and rigorously test new techniques that deliver higher quality data. This work may help inform how we produce some of the statistics in future official reports on income and poverty in the United States.
The Census Bureau plans to release NEWS experimental estimates for 2019 to 2021 in the coming months.
NEWS version 2.0 data are available on the NEWS webpage. Learn more about the changes in the methodology from NEWS version 1.0 to version 2.0 in a new working paper, “National Experimental Well-Being Statistics Changes for Version 2.0.”