Poverty Measurement: Orshansky's Original Measures and the Development of Alternatives

Mollie Orshansky, an economist in the Social Security Administration, developed a set of poverty measures that would go on to be used as one of the key indicators of the U.S. economy to provide the basis of eligibility determination for programs designed to help the poor, and to determine the allocation of billions of dollars in federal money to state and local governments. The origins of Orshansky's poverty measure, however, came from work that had a more modest goal of assessing risk of poverty among demographic groups (Fisher, p. 2). That Orshansky's poverty measure has remained the official measure of poverty is a testament to both the straightforward methodology used and its general acceptability. And to think that the careful analysis of a thoughtful government employee could have such an impact is inspiring. But the continued use of her poverty measure is also a testament to the methodological and political difficulty of implementing an alternative. In this article, we briefly review Orshansky's original poverty measure, consider alternative measures that have been developed, and discuss methodological and data issues that remain a challenge for implementing an alternative measure. Unlike other standards of poverty that had been produced by the early 1960s in the run up to the War on Poverty, Orshansky developed a need-based