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Small-Area Estimates of School-Age Children in Poverty - Interim Report 2: Evaluation of Revised 1993 County Estimates for Title I Allocations 1 Introduction Small-area estimates of poverty for children aged 5-17 in families are used by the U.S. Department of Education to allocate funds under Title I of the Elementary and Secondary Education Act, which supports compensatory education programs to meet the needs of educationally disadvantaged children. At present, the department allocates Title I funds—ver $7 billion for the 1997-1998 school year—to counties, and the states then distribute these funds among school districts within each county (see Moskowitz et al., 1993). The county allocations are based on estimates of eligible children: predominantly, children aged 5-17 in families with incomes below the poverty level,1 but also children in foster homes, children in families above the poverty level that receive Aid to Families with Dependent Children (AFDC),2 and children in local institutions for neglected and delinquent children. The allocations depend primarily on the number of eligible children but also on the proportion of school-age children who are eligible. The allocations also take into consideration the state's average per-pupil expenditure, and the formula includes a hold-harmless provision to cushion the impact of decreases in allocations (for details of the allocation process, see National Research Council, 1997:App. A). 1 The poverty status of individuals is determined by comparing the before-tax money income of their family to the appropriate poverty threshold. The poverty thresholds vary by family size and are updated by the change in the Consumer Price Index each year. See National Research Council (1995) for an evaluation of the current official poverty measure and proposed alternative measure; the issue of how poverty should be defined is not considered in this report. 2 The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 abolished AFDC and replaced it with Temporary Assistance to Needy Families (TANF).
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Small-Area Estimates of School-Age Children in Poverty - Interim Report 2: Evaluation of Revised 1993 County Estimates for Title I Allocations The poverty estimates for the Title I program used by the Department of Education to allocate funds to counties are provided by the Bureau of the Census. The practice until recently had been to use poverty estimates for a decade or more based on the most recent decennial census for which data were available. Since the proportions and numbers of children in poverty change over time, however, Congress in 1994 authorized the Bureau of the Census to provide updated estimates of poverty every 2 years for counties and, subsequently, for school districts for use in Title I allocations. Having the most up-to-date estimates is important so that resources can be directed towards areas that are most in need.3 Congress also authorized a study through the Department of Education—by a panel of the National Research Council's Committee on National Statistics to review the Census Bureau's program for small-area poverty estimates. The statute requires that the Department of Education use the Census Bureau's updated estimates for the allocations unless the Secretaries of Education and Commerce determine that they are ''inappropriate or unreliable'' on the basis of the panel's study ("Improving America's Schools Act of 1994," P.L. 103-382, and 1996 continuing resolution). The Panel on Estimates of Poverty for Small Geographic Areas was set up to carry out the authorized study. The panel is charged with a broad review of the Census Bureau's postcensal poverty estimates for small geographic areas and their utility for Title I allocations. The panel began its work in June 1996 and is scheduled to work through 1998, producing a final report at that time and such interim reports as are needed. In January 1997 the Census Bureau provided to the panel the first set of updated estimates for counties of the numbers of children aged 5-17 in 1994 from families with incomes below the poverty level in 1993.4 The original 1993 county estimates were developed from a statistical model that used administrative data from Internal Revenue Service and food stamp program records for 1993, estimates of poor school-age children in 1989 from the 1990 census, and 1994 population estimates to predict poverty for school-age children in 1993 as measured in the March Income Supplement to the Current Population Survey (CPS). To increase the reliability of the predictions, the model used a weighted 3 See National Research Council (1997:Ch. 2; App. B) for data on the significant changes that occurred in the numbers and proportions of poor school-age children between the 1980 and 1990 censuses and following the 1990 census. 4 More precisely, the Census Bureau's estimates pertain to related children aged 5-17 in poor families, termed "poor school-age children" in this report. Related children include all family members in a household who are under 18 years of age and related to the householder by birth, marriage, or adoption, except the spouse of the householder. Foster children are not included since they are not related to the householder, who is the person in whose name the house is owned or rented (see Bureau of the Census, 1993). The January estimates were released for public use on March 27, 1997, after a few corrections for erroneous input data were made.
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Small-Area Estimates of School-Age Children in Poverty - Interim Report 2: Evaluation of Revised 1993 County Estimates for Title I Allocations average of 3 years of data from the March 1993, 1994, and 1995 CPS, covering income in 1992, 1993, and 1994. The data used in the model are obtained from several sources, and most data are not available until 2 years after the period to which they refer. When the developmental work began in 1994, the Census Bureau decided that it could not expect to produce estimates by the end of 1996 for a later year than 1993, given the time required for acquiring, processing, and using the data in a new statistical model. As required by the legislation, the panel's first interim report assessed the reliability and utility of the original 1993 estimates for use in Title I allocations for the 1997-1998 and 1998-1999 school years (National Research Council, 1997). The panel concluded that a model-based approach to producing updated small-area estimates is appropriate and necessary when it is not possible to obtain estimates from a single data source, such as a sample survey, that are sufficiently reliable for the intended use. The panel stated that model-based estimates of poor school-age children can be produced that are clearly preferable to estimates from the 1990 decennial census given the major changes that occurred in the numbers and distribution of poor children between 1989 and 1993. However, the panel concluded that there had not been sufficient time to thoroughly evaluate the Census Bureau's original model-based estimates for 1993. As an interim solution for Title I allocations for the 1997-1998 school year, the panel recommended that the model-based estimates be averaged with 1990 census estimates (see National Research Council, 1997:38). The panel suggested additional evaluations for the Census Bureau's county model and alternative models, many of which the Census Bureau had begun but had not had time to complete. By the terms of the legislation, the estimates used for the 1997-1998 school year allocations could also be used for the 1998-1999 school year. However, the Department of Education wanted to pursue the possibility of a new allocation for 1998-1999 that would use only the 1993 estimates (i.e., not averaged with census estimates), and in May 1997 it requested the panel and the Census Bureau to further evaluate the original county model and alternative models. On the basis of the evaluation results, it asked the Census Bureau to produce revised 1993 estimates of poor school-age children by county in October 1997, and it asked the panel to assess the suitability of those estimates for use in allocating Title I funds for the 1998-1999 school year. (There was not time enough either to obtain the necessary data for the model or to conduct a full evaluation of the estimates for a later year than 1993.) The Census Bureau completed the evaluation work and produced revised 1993 county estimates of poor school-age children, which were provided to the panel and the Department of Education in October 1997.5 This, the panel's 5 The revised estimates were made available on the Census Bureau's web site in January 1998: http://www.census.gov/hhes/www/saipe93.html.
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Small-Area Estimates of School-Age Children in Poverty - Interim Report 2: Evaluation of Revised 1993 County Estimates for Title I Allocations second interim report, advises on the use of the revised estimates for Title I allocations for the 1998-1999 school year. This report contains six chapters and four appendices. Chapter 2 describes the Census Bureau's procedure for obtaining revised county estimates of the numbers and proportions of poor school-age children in 1993; the procedure uses a county model, a separate state model, and county population estimates of total school-age children. Chapter 3 describes alternative county models that were evaluated, and Chapter 4 summarizes the evaluation results. Chapter 4 also comments on the state model and the population estimates. Chapter 5 provides the panel's assessment of the revised 1993 county estimates and its recommendation for 1998-1999 Title I allocations. Chapter 6 outlines research and development activities for further work on developing updated county estimates of poor school-age children. The appendices provide additional technical information on: alternative county models (Appendix A); county population estimates (Appendix B); internal evaluation of county model regression output (Appendix C); and comparisons of county model estimates with 1990 census estimates of poor school-age children for 1989 (Appendix D).
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