Are We Providing Enough to Those Who Have Too Little? Measuring Poverty Relief

This manuscript presents a new measure of safety net program effectiveness-a "poverty relief ratio"-that is based on the estimated relationship between market income and social transfers, and reports the amount of income support provided, relative to the amount required to provide for all low-income households' basic needs. In an important advance over the standard poverty reduction rate measures, the poverty relief ratio preserves the rank order of observations across varying poverty thresholds. In this paper, we introduce this measure and demonstrate its validity by tracking major changes in federal policy, and cross-state variation in safety net programs.