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common time schedule for modifying reporting requirements, and coordinate all reporting requirements prior to issuance.

in the statistics for the SSI program for the States which have opted to administer their own supplementary State payments. Both the OASDI and SSI programs are able to make use of the social security files to provide validation of the data reported on the income and work experience of program participants.

Close coordination of Federal data requirements from State welfare agencies should be made effective through the committees formed by the Department of Health, Education, and Welfare for this purpose. Data required for the Food Stamp Program should also be coordinated with the DHEW committees.

Statistical Organizations and Coordination

Coordination of statistics of general importance for the analysis of income maintenance programs occurs on a functional, problem oriented basis in the absence of an overall coordinating mechanism. Where an issue has been identified and jointly addressed, some progress has resulted. Successful examples of coordination include the Interagency Task Force on Poverty which worked with DHEW on the poverty report and the Interagency Income Distribution Committee. As indicated in the discussion of data gaps, there are many other aspects of income maintenance statistics which will require close coordination among the agencies.

The reorganization of income maintenance statistics in which the program of Aid to Families with Dependent Children (AFDC) was brought into the Social Security Administration has provided an opportunity for the Office of Research and Statistics (ORS) to exert leadership for income maintenance statistics by exercising functions analogous to the National Center for Health Statistics and the National Center for Education Statistics. With direct responsibility for the major cash income maintenance programs ORS is in a strong position to develop and reshape statistical programs bearing on analysis of the population at risk for all income maintenance programs, including those that provide in-kind assistance such as the Medicaid and food stamp programs. A direct effect of the placement of the AFDC program within ORS is the likelihood that program statistics will be greatly improved to the level of the statistics of the other programs administered by SSA.

The potentially strong positive effects of the DHEW reorganization of income maintenance programs are accompanied by increased difficulties with respect to liaison with the State welfare agencies. The difficulties are a direct result of the grouping of DHEW income maintenance programs in SSA, Medicaid and Medicare in the Health Care Financing Administration (HCFA), and social service program in the Office of Human Development (OHD), which could result in confusing and conflicting contacts with State agencies. Whereas prior to reorganization the State and local agencies administering the AFDC, Medicaid, and social services programs dealt with a single Federal agency, the Social and Rehabilitation Service, they now deal with three Federal agencies. These programs are generally administered by a single agency on the local level in order to avoid as much duplication as possible in the intake process. Unless the statistical programs of SSA, HCFA, and OHD are closely coordinated, a great deal of confusion and difficulty in dealing with State reporting requirements will inevitably result. DHEW has recognized the need for formal arrangements for coordination through the formation of internal committees focusing on statistical, financial and quality control reports. These committees should agree on a

For the immediate future, efforts at improved coordination of statistics of importance to income maintenance statistics should continue to be devoted to ad hoc approaches. Concentration on particular tasks will make it likely that high priority activity will be accomplished and will make it easier to take into account the current unevenness of agency support of statistics. Areas in which ad hoc interagency groups could make significant contributions include the review of consumption standards for program eligibility and agreement on a common set of definitions for reporting data. As agency capabilities increase for addressing serious gaps in income maintenance statistics, it may become appropriate to form a planning group analogous to DHEW's Health Data Policy Committee.

Summary of Recommendations

Recommendations are listed in the order in which they appear in the text.

1. The Survey of Income and Program

Participation (SIPP) should be made operational as soon as feasible after completion of the 1980 Census. The SIPP will provide the best single source of information concerning eligibility for income maintenance programs. It will also provide estimates of concurrent participation in more than one income maintenance program.

characteristics employing standard definitions. Provision should be made for periodic updates including a cross section of program participants, a cross section of new participants and the program experience of participants entering the program in designated periods.

2. A developmental program should be instituted

at the Bureau of Labor Statistics which will provide alternative measures of the cost of living for the population at risk by determining: (1) the extent of geographic differences in the cost of living, (2) alternative approaches to making cost-of-living adjustments, (3) the impact of alternative adjustments on work incentives and migration patterns, and (4) ongoing data collection programs which would be necessary to support cost-of-living

adjustments. 3. The Current Consumer Expenditure Survey of

the Bureau of Labor Statistics should provide for a relatively high sampling rate for the population at risk for income maintenance programs in order to provide separate estimates for

6. Incentives should be employed to encourage

State and local agencies using manual reporting systems to adopt standardized case record layouts which will facilitate the filing of reports.

7. State welfare agencies should be encouraged to

develop microdata files from which statistical reports and required special analyses can be generated for the programs of Aid to Families with Dependent Children and Food Stamps. Data concerning recipient participation in other programs such as Medicaid should also be added to the microdata file as soon as feasible.

this group

4. Responsibility for exploring objective minimum

consumption standards should be assigned to the agencies with lead responsibility for medical care, housing, transportation, and other areas of consumption selected as being of particular importance. Where consumption standards can be agreed on, consideration should be given to

incorporating them into a measure of poverty. 5. All income maintenance programs should be

required to use a minimal set of recipient

8. Close coordination of Federal data

requirements from State welfare agencies should be made effective through the committees formed by the Department of Health, Education, and Welfare for this purpose. Data required for the Food Stamp program should also be coordinated with the DHEW committees


Introduction and Overview

The need for statistics on the aggregates and size distribution of household income, wealth, and consumption is to depict over time the variations of income and living conditions among the Nation's population. This information is basic to much of the discussion of public policy issues related to welfare, tax reform, aggregate economic demand, and, indirectly, business capital formation. Involved in each of these issues are considerations of shares of income (flow of claims on resources), consumption (execution of claims on resources), and wealth (stock of resources or of claims on resources) for persons, families and households, and of how these shares relate to performance and need.

In predicting that there would be over the next few years a major public policy debate on income shares and the distributional effects of public actions, Alice Rivlin' listed four sets of questions that the public and politicians might reasonably ask of economists: 1. What is happening? How great is income

inequality and which way is it moving? What are the effects of current government pro

grams? 2. What would be better? Presumably no one

wants economists telling them what the distribution of income ought to be, but they might reasonably expect them to be helpful in defining alternative norms and discussing how varying degrees of equality might be expected

to affect other objectives. 3. Why are things as they are? Economists worth

their pay ought to provide a workable theory that explains why the distribution of income has the shape it has and why it is changing or

not changing 4. What can we do about it? Useful economists

ought to spell out some policy options and estimate their effects, not only on the

distribution of income, but on the size of the

pot to be distributed. The fundamental importance of income, wealth, and consumption statistics to describe conditions, compare alternatives, test theoretical hypotheses, and estimate impacts of existing and potential programs is self-evident and a justification of their need in the broadest sense. (The reader should also see related materials in the chapters on labor statistics, price statistics, economic accounts, financial statistics and income maintenance and welfare statistics.)

Income, wealth, and consumption data are regularly used in the Congress by the Joint Economic Committee, the House Committee on Ways and Means, the Senate Finance Committee, various other standing and special committees, and the budget committees of both Houses in the consideration of economic, tax, income maintenance, and budget issues. In the Executive Branch, the Council of Economic Advisors, the Department of the Treasury, the Office of Management and Budget, the Department of Health, Education, and Welfare, the Department of Labor, and other agencies use these data in consideration of economic policy, social wellbeing, taxation and revenue measures, and the Federal budget. The Federal Reserve Board uses these data in formulating monetary policies. Outside the Federal Government, these data are used by business firms, labor unions, trade associations, research organizations, universities, State and local governments, and regional public agencies.

Data concerning income, wealth and consumption currently are compiled from three broad approaches: (1) direct survey data (e.g., the Census Bureau's household Current Population Survey); (2) administrative records (e.g., Internal Revenue Service's tabulations of individual tax returns in Statistics of Income); and (3) synthesis of all available information into a comprehensive national economic accounting framework (e.g., Bureau of Economic Analysis' measures of personal income and its size distribution). The availability of the data on the components of income, consumption and wealth varies markedly in terms of frequency, distributional detail, and comprehensiveness. Wealth data typically

'Alice M. Rivlin, “Income Distribution-Can Economists Help?,” American Economic Review, Vol. LXV, Number 2 (May 1975).

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