Poverty rate, actual and simulated, 1959–2011

* Poverty rate simulated by a model based on the relationship between per capita GDP growth and the official poverty rate between 1959 and 1973.

Source: Authors' analysis of Current Population Survey Annual Social and Economic Supplement Historical Poverty Tables (Tables 2 and 4) and Bureau of Economic Analysis National Income Product Accounts public data. Analysis using Danziger and Gottschalk (1995)

Documentation and methodology

Underlying data are from Current Population Survey Annual Social and Economic Supplement Historical Poverty Tables, Table 2, “Poverty Status, by Family Relationship, Race, and Hispanic Origin,” and Table 4, “Poverty Status, by Type of Family, Presence of Related Children, Race and Hispanic Origin,” and from Bureau of Economic Analysis National Income Product Accounts public data, Table 7.1, “Selected Per Capita Product and Income Series in Current and Chained Dollars.” The analysis is an adaptation of analysis by Danziger and Gottschalk (1995), whose method was to regress the poverty rate of the growth of real per capita gross domestic product from 1959–1973 and then simulate poverty rates based on that simple model. The link between GDP and poverty in the earlier period (1959–1973) and the potential for GDP to eradicate poverty by the 1980s holds true for alternative specifications including using only the under-age-65 poverty rate (to remove elderly, the main recipients of Social Security, also growing over this period) and controlling for one target demographic: female headed families.

Figure 7N. Change in productivity, 20th-percentile wages, unemployment, and poverty, selected periods, 1979–2010. Productivity data, which measure output per hour, are from the Bureau of Labor Statistics Major Sector Productivity and Costs Index public data series; the figure shows the average annual growth rate of productivity over the periods covered. The figure also shows the average annual growth rate of wages at the 20th percentile of the wage distribution for the given periods, using data from Current Population Survey Outgoing Rotations Group microdata; see Appendix B for details. The percentage-point changes in the unemployment rate across the periods shown come from the monthly Current Population Survey public data series, while percentage-point changes in the poverty rate come from Current Population Survey Annual Social and Economic Supplement Historical Poverty Tables, Table 2, “Poverty Status, by Family Relationship, Race, and Hispanic Origin.”