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OCR for page 188
APPENDIX C
Reconciling Different Estimates of Income
and Adjunctive Eligibility
This report has attempted to characterize how estimates of eligibility
and participation vary when new methods of estimation are used. The pri-
mary focus of this analysis is on estimating income and adjunctive eligibil-
ity. To conduct this analysis, the panel employed three different data sets to
estimate the effects alternative methods have on eligibility and participa-
tion estimates: the March Current Population Survey (CPS), the Survey of
Income and Program Participation (SIPP), and the Transfer Income
Microsimulation model data (TRIM), which is based on the March CPS.
The CPS is the data base that USDA currently uses to estimate eligibility.
The SIPP and TRIM data bases each have features that allow estimation of
new methodologies, but each does so in different ways. For example, SIPP
directly asks respondents to report their monthly income, while TRIM uses
annual reports of income and benefit receipt combined with respondent
accounts of employment periods throughout the year to simulate monthly
income. These differing approaches yield different estimates of eligibility.
In this appendix, we attempt to explain why estimates of eligibility differ
across these data sets. We first examine differences in estimates of eligibility
when monthly income and WIC certification periods are used to estimate
eligibility. We then examine differences in estimating adjunctive eligibility.
188
OCR for page 189
RECONCILING DIFFERENT ESTIMATES
ESTIMATES OF ELIGIBILITY USING MONTHLY INCOME
MEASURES AND ACCOUNTING FORWIC CERTIFICATION
PERIODS
189
While the March CPS does not provide monthly income data, the
Urban Institute's Transfer Income Microsimulation model (TRIM 3) pro-
vides routines that impute monthly income to CPS files. These imputation
routines utilize the income and unemployment data from the CPS to re-
flect both monthly unemployment flows and the degree of income variabil-
ity found in SIPP. Estimates of the proportion of infants and children in-
come eligible from this modified CPS data base and the SIPP 1996 Panel
data are presented in Table C-1.
Employing the TRIM imputed monthly income and using a monthly
certification period (the row labeled "average monthly" in the table), we
find roughly the same percentages of income-eligible infants and children
that were found by Gordon et al. (19971. The number of eligible infants
increases 3 percent over the estimates using annual income, while the num-
ber of income-eligible children increases by 1 to 2 percent. If we impute 12
months of eligibility to infants and children if their worst month's income
is less than 185 percent of federal poverty guidelines (the "eligible in any
month" row), again we find roughly the same percentage increases (28 and
24 percent) in the number of income-eligible infants that were found in the
Gordon et al. study and a slightly smaller increase in the number of chil-
dren (19 and 20 percent).
The monthly income data imputed with the TRIM model does not
provide sufficient information to fully model the WIC certification pro-
cess. Since the public use files of the CPS do not provide the birthdates of
individuals (only ages in March), we cannot model which month in the
year infants initially become eligible and hence the number of months dur-
ing the year they are income eligible. A similar problem occurs for children
ages 1 through 4. To provide an upper bound estimate, we assume that all
infants would be eligible for 12 months if their worst month's income quali-
fied them for WIC. For children, we imputed 6 months of eligibility if
their worst month's income qualified them for WIC and an additional 6
months of eligibility if their seventh worst month also made them income
eligible. An alternative would be the second worst month.
This modeling of the WIC certification process does not alter the esti-
mates of the percentage of infants who are income eligible. The number of
income-eligible children is reduced by this modeling of WIC certification
OCR for page 190
190
APPENDIX C
TABLE C-1 Estimates of the Monthly Versus Annual Income Eligibility
(Percentage of All Individuals)
1997
1998
Infants
CPS/TRIM3
Annual 39.7 39.2
Average monthly 40.8 (1.03) 40.2 (1.03)
Eligible in any month 50.6 (1.28) 48.7 (1.24)
Certification periods 50.6 (1.28) 48.7 (1.24)
SIPP
Annual 38.9 35.1
Average monthly 43.5 (1.12) 41.3 (1.17)
Eligible in any month 58.9 (1 52) 57.5 (1.64)
Certification periods 56.6 (1.46) 54.1 (1.54)
Children
CPS/TRIM3
Annual 41.1 40.4
Average monthly 41.5 (1.01) 41.1 (1.02)
Eligible in any month 49.0 (1.19) 48.4 (1.20)
Certification periods 45.9 (1 12) 45.5 (1.13)
SIPP
Annual 42.4 39.6
Average monthly 44.8 (1.06) 42.1 (1.06)
Eligible in any month 62.0 (1 46) 59.4 (1.50)
Certification periods 56.8 (1 34) 53.9 (1.36)
NOTE: The bracketed numbers represent the ratio of respective estimate to the corre-
sponding estimate using annual income eligibility.
SOURCES: The CPS estimates are from panel calculations based on extracts from the
Urban Institute TRIM files for the respective calendar years. The SIPP estimates are
from calculations made by Bitler et al. (2002).
periods. Instead of 19- and 20-percent increases in the number of income-
eligible children when only the worst month was considered, monthly in-
come with the certification process is estimated to increase the number of
income-eligible children 12 and 13 percent compared with estimates em-
ploying an annual measure of income.
Comparing the estimates derived from the TRIM data with those em-
ploying data from the 1996 SIPP panel, we conclude that the marginal
effect of monthly income with WIC certification periods is significantly
larger when employing the SIPP data as opposed to the TRIM data. The
OCR for page 191
RECONCILING DIFFERENT ESTIMATES
191
SIPP data produces a marginal effect that is roughly twice that found when
using the TRIM data, even though monthly income was imputed to reflect
the variability of income found in the SIPP data. In an attempt to under-
stand these differences, we examined the SIPP- and TRIM-imputed distri-
bution of children by the number of months their monthly income was less
than 185 percent of federal poverty guidelines. These distributions, as well
as the distribution of children who had at least one month in which their
income was less than 185 percent of poverty are presented in Table C-2.
The distribution of TRIM-imputed months of income eligibility is
quite different from the distribution based on the reported incomes in SIPP.
Children are more likely (roughly 20 percent more likely) to have at least
one month of income eligibility in SIPP than in the TRIM-imputed data.
TABLE C-2 Distribution of Children Ages 1 to 4 Years by the Number
of Months in Which Monthly Income Is Less Than or Equal to 185
Percent of Poverty in 1998 (Percentage)
SIPP
CPS/TRIM
Number All Months Greater All Months Greater
of Months Children Than Zero Children Than Zero
0 40.8 5 1.6
1 4.5 7.5 1.6 3.3
2 3.4 5.7 1.0 2.0
3 3.1 5.2 1.0 2.0
4 4.1 6.8 .9 1.9
5 1.8 3.1 .5 1.1
6 2.2 3.7 .9 1.9
7 2.5 4.2 .7 1.4
8 3.5 5.9 6.1 12.5
9 2.4 4.1 1.4 2.8
10 3.4 5.7 1.3 2.6
1 1 4.5 7.6 1.0 2.1
12 23.9 40.4 32.2 66.4
Computed percentage of all children employing the above distributions:
Average monthly 41.3 41.1
Eligible in any month 59.2 (1.43) 48.4 (1.18)
Certification periods 49.7 (1.20) 45.5 (1.1 1)
Note: Numbers in parentheses represent the percentage increase in eligibility compared
with estimates using annual income.
OCR for page 192
192
APPENDIX C
But the distribution of children who have at least one month of eligibility is
also quite different. In the SIPP data, the modal value is 12 months. How-
ever, 60 percent of children have at least 1 month but less than 12 months
of eligibility. The TRIM-imputed data, however, show a large percentage of
children with 8 months of eligibility. The spike at 8 months reflects a pecu-
liarity of the TRIM imputation routines. Each year there are four months
with one more weekly pay period than the other eight months. TRIM
accounts for these monthly differences and constructs eight months with
fewer numbers of pay periods and hence less income. TRIM also imputes a
much higher proportion of children with 12 months of income eligibility
(66 percent) than is found in the SIPP data (40 percent).
This evidence suggests that the differences between the SIPP and
TRIM estimates can be explained in the following manner. Since we can-
not estimate the effect of which months the children are certified as income
eligible in the TRIM data, we can try to make SIPP estimates closer to the
TRIM data by using the distributions of income-eligible months in Table
C-2. Using the distribution of all children in the SIPP data to weight the
number of months of eligibility, we can compute an average monthly esti-
mate of the proportion of children in SIPP that is identical to the estimate
from the TRIM data. Making this calculation, we find that 41.3 percent of
children in 1998 were income eligible if monthly income was employed.
This is almost identical to the 41.1 percent estimated from the TRIM data.1
The upper bound estimate, "eligible in any month," increases in the
SIPP data by 43 percent compared with the estimates that use monthly
certification, "average monthly." The similar estimate from the TRIM in-
creases only 18 percent. The difference is the result of the underlying differ-
ence in the SIPP estimates of the number of eligible children with at least
one month of eligibility, which is much greater than the TRIM estimate.
To mirror the TRIM certification process in the SIPP data, we im-
puted 6 months of income eligibility to those children with 1 to 6 months
of income eligibility and 12 months of eligibility to those children with 7
to 12 months of eligibility. Compared with the situation when monthly
certification periods (average monthly) are employed, these calculations in-
dicate that the SIPP data would have estimated that 20 percent more chil-
1The computed SIPP estimates in Table C-3 will not match the estimates for the SIPP
data found in Table 5-1 because the earlier estimates take account of the timing of certifica-
tion during the year, while the calculations in Table C-3 do not. But these calculations are
done to make the SIPP estimates mirror what is done in the TRIM-imputed data.
OCR for page 193
RECONCILING DIFFERENT ESTIMATES
193
dren (49.7 instead of 41.3 percent) would have been eligible. The identical
calculations from the TRIM data indicate only 11 percent more children
are estimated to be eligible (45.5 instead of 41.1 percent). To decompose
this difference, we first divide the population of children with at least 1
month of income eligibility into two groups one in which the children
have 1 to 6 months of eligibility and the other in which the children have 7
to 12 months of eligibility. In the SIPP data, the first group constitutes
32.1 percent of the total number of children with at least 1 month of eligi-
bility. When this form of certification is used instead of monthly certifica-
tion, this group has an average gain of 3.2 months of income eligibility. In
the TRIM data, this group experiences the same average gain in eligibility,
but constitutes only 12.2 percent of the total number of children with at
least 1 month of eligibility. In the second group of children with 7 to 12
months of eligibility, the SIPP data indicate that 67.9 percent of children
with at least 1 month of eligibility are in this group and would experience
an average gain of 1.1 months when certification is accounted for in this
manner. The TRIM data show a larger proportion of children with at least
1 month of eligibility falling in the 7 tol2 month group and experience an
average gain of only 0.8 months.2 Thus, SIPP is indicating a much larger
gain in income eligibility due to the WIC certification process and monthly
income because of two factors:
.
SIPP reported monthly income indicates that among those children
with at least one month of eligibility, the average increase in the
months of eligibility is largely due to more children having only a
few months (1 to 5) in which the effect of certification on the aver-
age number of months is greater than when the child has 7 to 12
months of monthly eligibility.
· SIPP data indicate that a higher proportion of children have at least
1 month of eligibility.
Table C-3 extends the TRIM-based analysis to calendar years 1994
through 1999. This longer time series of estimates shows the relative stabil-
ity of the impact of imputed monthly income on the size of income-eligible
populations. The proportion of all infants and children who are income
2The average increase in the number of months of eligibility is smaller in the second
group because of the high proportion of children at 12 months of eligibility compared with
six months, when certification has no effect.
OCR for page 194
194
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OCR for page 195
RECONCILING DIFFERENT ESTIMATES
195
eligible (accounting for monthly income and certification periods) has been
declining over the seven-year period. However, the impact of monthly in-
come and certification on eligibility estimates compared with estimates
based on annual income is constant throughout the period. For infants, use
of monthly income and certification periods increases eligibility estimates
by 23 to 29 percent. For children, the estimated increase is very stable at 11
to 13 percent.
ADJUNCTIVE ELIGIBILITY AND UNDERREPORTING OF
MEANS-TESTED PROGRAMS
In Chapter 5, we observed that both the public use CPS and SIPP data
may suffer from underreporting of participation in means-tested programs
that would create eligibility for individuals in the WIC program. To exam-
ine the effect underreporting may have on the number of people who gain
WIC eligibility through adjunctive eligibility, we used TRIM data with
imputed participation in these programs. The imputation procedure in
TRIM makes sure the number of participants for each program matches
control totals recorded by the programs' administrative records. Table C-4
presents estimates of the proportion of income and adjunctively eligible
infants and children from TRIM imputed data for 1994 and 1996 through
1999 and from SIPP data for calendar years 1997 and 1998. The bracketed
numbers represent the ratio of the proportion of eligible people in the row
relative to the number eligible from the previous step (the row directly
above). For example, in 1994, TRIM estimates that 42.2 percent of infants
would be eligible based on their annual income. This proportion increases
to 54.3 percent when monthly income and certification periods alone are
used in the determination of income eligibility. This represents a 29 per-
cent increase in the number of children eligible compared with estimates
that use annual income. When adjunctive eligibility is also considered, the
proportion of infants rises to 58 percent, or a 7 percent (1.07 = 58.2/54.3)
increase in the number of eligible infants due to the marginal addition of
adjunctive eligibility to the eligibility determination process.3
3The marginal effect of adjunctive eligibility may be understated while the effect of
monthly income may be overstated due to the manner it iS being estimated in Table C-4. The
effect of monthly income includes not only a "pure" effect of monthly income but also an
interaction effect monthly income has with adjunctive eligibility the effect representing the
number of individuals who would qualify for WIC either due to monthly income or enroll-
ment in a means-tested program.
OCR for page 196
196
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OCR for page 197
RECONCILING DIFFERENT ESTIMATES
197
The marginal effect of considering adjunctive eligibility is smaller than
the effect of employing monthly income as opposed to annual income.
While the TRIM estimates show a slightly larger marginal effect for both
infants (11 and 15 percent increases in 1997 and 1998, respectively) and
children (8 and 7 percent) than found in the SIPP data, the differences are
explainable. In the SIPP data, enrollment in the means-tested programs is
reported by the respondents. The TRIM data imputes individual enroll-
ment in these programs so that the data reflects enrollment found in ad-
ministrative program data. Table C-5 presents the average monthly counts
of the number of infants and children reporting enrollment in Medicaid in
SIPP and the CPS survey as well as the corresponding estimates in the
TRIM-imputed data. Clearly the larger effects are the result of roughly 50
percent more infants and children having enrollment status in the TRIM
data than in the SIPP data, which uses reported participation.
While a clear case can be made that SIPP data may understate the
marginal effect of adjunctive eligibility due to using reported as opposed to
actual enrollment in these means-tested programs, the TRIM-imputed data
do not necessarily represent truth. TRIM utilizes characterizations of state
Medicaid programs to determine Medicaid eligibility in order to assign
enrollment to those who are eligible for benefits. However, these control
totals pertain to all children under age 18 years, not to the WIC target
group of children under age 5 years. Hence there is no guarantee that TRIM
is assigning enrollment of infants and children under age 5 in a way that
reflects the true number of that age who are enrolled. They may be over- or
understating the true number. In addition, the routine employed by TRIM
assigns enrollment to nonreporters in order to hit state-level control totals
TABLE C-5 Average Monthly Receipt of Medicaid as a Percentage of
Total Population of Infants and Children
SIPP CPS TRIM
Reported Reported Imputed
1997
Infants 26.2 24.7 38.0
Children (1 to 4 years) 20.6 21.2 31.1
1998
Infants 24.9 22.9 37.5
Children (1 to 4 years) 19.5 19.2 28.9
OCR for page 198
198
APPENDIX C
on a completely random basis. The assignment does not take into account
the specific income of the family. It is possible that TRIM may be assigning
too many high-income infants and children to enrollment status and hence
overstating the true marginal effect of adjunctive eligibility.
Representative terms from entire chapter:
sipp data
