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What Is the Poverty Gap?

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  • Written By: H. Bliss
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  • Last Modified Date: 01 September 2014
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The term "poverty gap" can be used in a few different ways, and its meaning can vary depending on the type of poverty data used to determine poverty levels. Some social scientists use the term to describe the gap in income among diverse social groups, to define differences between the rich and poor, to describe poverty differences between men and women, or to show the gap in poverty for people of different races. In statistics, the poverty gap is the average amount of money those below the poverty line lack compared to those at or above the line. The definition of the poverty line can vary based on the country, but it is usually a ballpark measurement of the absolute least a person could make to cover necessities like shelter and adequate food.

The Federal Poverty Level (FPL), more popularly called the Federal Poverty Measure, is one of many means of measuring poverty levels and determining the poverty gap in the United States. The Federal Poverty Measure includes two slightly different measurements of poverty. One is called the poverty threshold, and the other is referred to as the set of poverty guidelines.

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Poverty guidelines are set by the United States Department of Health and Human Services (HHS). Designed to oversee the health of the citizens of the United States, HHS handles Medicare and Medicaid and assists with medical services for those who cannot afford them. The HHS department uses its poverty guidelines to determine a citizen's eligibility for its services. As of 2010, the HHS poverty guideline was set at $18,310 US Dollars (USD) for three-person families living in the contiguous 48 states.

The poverty threshold is a poverty measurement set by the United States Census Bureau, a department created to survey the people of the United States to collect information about its populace. This department uses its poverty thresholds to calculate statistics about levels of poverty in the United States. As of 2008, the Census Bureau set its poverty threshold at $17,163 USD for a three-person family. As of 2004, the United States had an overall poverty gap of 12.7 percent. In this case, the poverty gap denotes the percentage of people who are not making enough to meet basic needs for adequate human survival.

Though an international poverty line is difficult to set accurately due to differences in currency and cultural perceptions of poverty, a 2005 figure set the international poverty line at $1.25 USD per day per person (PPP). This poverty line is meant to denote extreme poverty like that seen in the poorest of developing countries. Developing countries used to be known as third-world countries, but use of the term has fallen out of favor in the academic world due to its association with the Cold War, when the term was used to describe countries that were neither aligned with capitalist countries nor communism.

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FrameMaker
Post 3

@ istria- I recently read an article on ABC news that summarized a study related to the wealth gap between whites and blacks. The study spanned about 25 years, and it tracked the incomes of 2000 families. The study concluded that there was a significant wealth gap between whites and blacks. What was more disturbing though is that the wealth gap quadrupled during the study. The wealth disparity between the two groups was consistent regardless of the tax bracket.

This study essentially established that there is still a significant glass ceiling for blacks, and that the ceiling is shrinking. While race relations have arguably improved since the study began in 1984, the rate of progress between the two races has not been equal. The study credits the increase in the gap to institutional standards that benefit one socioeconomic group more than others.

Comparables
Post 2

@ Istria- The wealth gap is usually used as an indicator of wealth distribution. This can be used to measure the general income distribution amongst the entire population, or it can be used to measure the differences in income distribution between races, sexes, and the likes.

istria
Post 1

What is the wealth gap, and what has its general trend been in the past decade or so? Is the wealth gap the same as the poverty gap? I need to write a paper on the subject, and I know nothing about it. If someone could simply give me a little background so I know what I need to research I would be very appreciative.

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