Defining Poverty Asset poverty is a measure of the financial cushion needed to withstand a financial crisis (i.e. medical emergency, job loss, etc.) and stay out of poverty for three months. Assets can be liquid or non-liquid. Liquid assets are those which can be easily exchanged for cash (e.g., gold, savings accounts, government bonds). Nonliquid assets typically must be sold (e.g., cars, homes, businesses). A household is considered asset poor if its combined assets are worth less than three monthsâ€™ living expenses at the federal poverty level (FPL) threshold. Similarly, a household is considered liquid asset poor if its liquid assets alone are insufficient to
Nearly half of Ohio households lack the liquid assets needed to stay out of poverty for 3 months
See Table 7, p. 15
A family of two adults and two school-age children in Ohio needs an annual income of at least 146% of the federal poverty level to be self-sufficient.
official annual poverty rate episodic poverty rate
The episodic poverty rate in the United States is twice as high as the official annual poverty rate. See Table 3, p. 13
The FPM is based on annual household income, and as such, fails to distinguish between longterm and short-term poverty. Using a monthly poverty threshold along with data from the Survey of Income and Program Participation (SIPP), a national household survey designed to track participants over multiple years, the Census Bureau estimates the number of Americans experiencing chronic and episodic poverty. The chronic poverty rate is defined as the percentage of the population in poverty every month in a 36-month period, whereas episodic poverty is defined as those in poverty for at least two consecutive months in a 36-month period.
Ohio Association of Community Action Agencies