Poverty, Transfers, and Economic Growth

Abstract

This article uses a time series of poverty estimates, corrected for several major deficiencies in the official index, in order to examine the sensitivity of poverty to changes in economic variables. It is found that changes in the “corrected” poverty deficit and poverty rate between 1959 and 1975 were significantly affected by economic growth, unemployment, and social welfare expenditures. Extension of the corrected poverty series through 1983 indicates that poverty has not decreased since 1979 and currently is about equal to its 1975 level.