The 10-20-30 Provision: Defining Persistent Poverty Counties

Research has suggested that areas with a poverty rate 20% or greater experience more acute systemic problems than do lower-poverty areas. The poverty rate is the percentage of the population that is below poverty, or economic hardship as measured by comparing income against a dollar amount that represents needs for a low level of material well-being. Recent Congresses have enacted antipoverty policy interventions that target resources on local communities based on the characteristics of those communities, rather than solely on those of individuals or families. One such policy, dubbed the 10-20-30 provision, was first implemented in the American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5). Title I, Section 105 of ARRA required the Secretary of Agriculture to allocate at least 10% of funds from three rural development program accounts to persistent poverty counties—counties that maintained poverty rates of 20% or more for “the past 30 years, as measured by the 1980, 1990, and 2000 decennial censuses.” One notable characteristic of this provision is that it did not increase spending for the rural development programs addressed in ARRA, but rather targeted existing funds differently. Since ARRA, Congress has applied the 10-20-30 provision for other programs in addition to rural development programs, and may continue to do so, using more recent estimates of poverty rates. Doing this, however, requires updating the list of counties with persistent poverty, and that requires making certain decisions about the data that will be used to compile the list. Poverty rates are computed using data from household surveys fielded by the U.S. Census Bureau. The list of counties identified as persistently poor may differ by roughly 60 to 100 counties in a particular year, depending on the surveys selected to compile the list and the rounding method used for the poverty rate estimates. In the past, the decennial census was the only source of county poverty estimates across the entire country (there are 3,144 counties or county-equivalent areas, nationwide). After 2000, however, the decennial census is no longer used to collect income data. There are two newer data sources that may be used to provide poverty estimates for all U.S. counties: the American Community Survey (ACS) and the Small Area Income and Poverty Estimates (SAIPE) program. The Census Bureau implemented both the ACS and SAIPE in the mid-1990s. Therefore, to determine whether an area is persistently poor in a time span that ends after the year 2000, policymakers and researchers must first decide whether ACS or SAIPE poverty estimates will be used to demarcate that time span. Which of these surveys is the best data source to use for compiling an updated list of counties with persistent poverty may differ based on the specific area or policy for which the antipoverty intervention is intended. When defining persistent poverty counties in order to target funds for programs or services using the surveys above, the following factors may be relevant: Characteristics of interest: SAIPE is suited for analysis focused solely on poverty or median income; ACS for poverty and income and other topics (e.g., housing characteristics, disability, education level, occupation, veteran status). Geographic areas of interest: SAIPE is recommended for counties and school districts only; ACS may be used to produce estimates for other small geographic areas as well (such as cities, towns, and census tracts). Reference period of estimate: Both data sources produce annual estimates. The SAIPE estimate is based on one prior year of data while ACS estimates draw on data from the prior five years. Rounding method for poverty rates: Rounding to one decimal place (e.g., not including a county with a poverty rate of 19.9% because it is less than 20.0%) yields a shorter list of counties with persistent poverty than rounding to a whole number (e.g., including a county with a poverty rate of 19.9% because it rounds up to 20%). Special populations: Poverty status is not defined for all persons, such as unrelated household members under age 15 (e.g., children in foster care), institutionalized persons, and residents of college dormitories. Persons without housing are not included in household surveys. Areas with large numbers of college students living off-campus may have higher poverty rates than might be expected, because poverty is measured using cash income and does not include student loans.