Poverty in 2021 Corrected for Unemployment Insurance Underreporting
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Abstract
The 2021 CPS-ASEC underreports unemployment insurance benefits by approximately $220 billion. Using newly available summary data on unemployment insurance benefits in IRS tax records from Larrimore, Mortenson, and Splinter (2022), I estimate the effects of this underreporting on income and poverty statistics. If the CPS-ASEC had properly captured unemployment insurance benefits, the official poverty rate for income-year 2021 would have been 1.5 percentage points lower. Additionally, the supplemental poverty rate would have been 1.2 percentage points lower than that originally reported by the Census Bureau.
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