August 29, 2013

Poverty Rate is Inflated by up to 0.7% Due to College Students

A recent Planet Money article A College Kid, A Single Mom, And The Problem With The Poverty Line said that : "U.S. Census Bureau recently reported that more than half of all college students who are living off campus and not at home are poor."    That shouldn't be a surprise to anyone that a lot of college students have low income.   But what they really mean is that the US government adds these college students to the official tally of people in the nation that are below the poverty line.  

I also found a Census blog post on it here When Off-Campus College Students are Excluded, Poverty Rates Fall in Many College Towns  Here is the full Census report on the topic : Examining the Effect of Off-Campus College Students on Poverty Rates

If you are in college and you don't live with your parents or in a college dorm then you are counted as a household.   College students living on their own who have low income below the poverty line are added to the number of people in the nation officially deemed as living in poverty.    If you live with your parents then you're included in your parents family and the poverty rate is based on your families entire household with your parents income.   The Census excludes people living in college dorms from the poverty statistics.   But if you live off campus and don't live with family then you're considered your own household and your poverty rate is figured based on your own income.

 If you look at table 2 in the Census report it tells us that 51.8% of college students not living with parents or on campus are below the poverty rate.    That is not surprising.    But there are actually 2-3 million such people in the nation and it adds up.   Table 2 also shows that the impact on the poverty rate in the U.S. of excluding college students living on their own would be a -0.7% difference.

As of 2009-2011 figures the official poverty rate was 15.2%.    But that includes college students living on their own.    If college students living on their own were excluded from the poverty tally then the poverty rate would change by -0.7% and would have been 14.5% instead of 15.2%.   

It makes an even bigger difference if you look at local areas like college towns.   The Census report says : "For example, Monongalia County, West Virginia where the University of West Virginia is located , had its poverty rate drop from about 23 .0 percent to 12.6 percent."     But there are not a lot of counties in the nation that see large changes.  

Should they include college students living alone or not?     Well I think it depends.   If you happen to live alone in an apartment your rich parents pay for and you make $8 an hour working 10 hours a week for spending money then I don't think you should be added to the governments official tally of the ranks of the poor.     But if you're a 29 year old who is officially independent from your parents and paying your own way through community college on 30 hr/week minimum wage job then yes maybe you should be in the poverty ranks.    I don't know but I would suspect that most college students are not really independent.

It seems clear to me that including college students living in off campus housing is inflating the poverty rate in the nation.   I'm not sure how much of the 0.7% difference is really students who get support from their parents.     I think they should exclude any college student who can be claimed as a dependent by someone else.    I'm assuming that the Census survey that figures the poverty rate doesn't ask if you can be claimed by someone else.    If your parents are claiming you as a dependent then I really don't think you should be counted in the poverty figures for the same reason that they already exclude college students living on campus or living with family members.


1 comment:

  1. Yeah, if the parents are claiming the student, then they shouldn't be included in the poverty rate. Why is it a household? They count everyone in the home right?
    Anyway, everyone I know was dirt poor when we were students. We had a lot of fun though. Youth is so much better than money.


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