have a larger effect than means-tested cash payments, reducing the poverty rate by
nearly 3 percentage points from 15.2 to 12.4 percent.
The Bureau of the Census also provides calculations of income and poverty
that include non cash transfers, which are based on assumptions about the cash
equivalent value of each in-kind benefit program. The impacts on poverty are
shown in lines (h), (i) and (j) of Table 4. Comparing lines (h) and (j), we see that
means-tested non cash transfers reduce poverty by about 1.5 percentage points.
Taken together, these calculations suggest that government programs do have
a modest effect on poverty, even though many of them are not accounted for in the
official rate. More to the point, these programs may have a substantial effect on the poverty gap, the sum of the differences between income and the poverty line for all
families below the poverty line. Scholz and Levine (2001) estimate that in 1997
taxes and transfers reduced this gap by 72 percent for all persons (that is, not just
non elderly persons). Further, TANF alone reduces the poverty gap by 5 percent,
and all means-tested cash and non cash benefits reduce the poverty gap by
55 percent.