The poverty gap can refer to income differences between social groups, poverty differences between genders and races, or the average amount of money missing for those below the poverty line compared to those above it. The US uses both poverty guidelines and the poverty line to measure poverty levels. The international poverty line is set at $1.25 USD per day per person.
The term “poverty gap” can be used in 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 between different social groups, to define the differences between rich and poor, to describe the differences in poverty 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 missing for those below the poverty line compared to those at or above the line. The definition of the poverty line can vary by country, but it is usually a sphere measurement of the absolute minimum a person could do to cover necessities such as 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 measure of poverty comprises two slightly different measures of poverty. One is called the poverty line and the other is referred to as the set of poverty guidelines.
Poverty guidelines are set by the United States Department of Health and Human Services (HHS). Designed to monitor the health of US citizens, HHS administers Medicare and Medicaid and provides medical care to those who cannot afford it. 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 United States Dollars (USD) for three-person households living in the contiguous 48 states.
The poverty line is a measure of poverty established by the United States Census Bureau, a department created to survey the population of the United States to gather information about its population. This department uses its poverty lines to calculate statistics on poverty levels in the United States. As of 2008, the Census Bureau set the poverty line at $17,163 USD for a family of three. As of 2004, the United States had an overall poverty gap of 12.7 percent. In this case, the poverty gap indicates the percentage of people who are not doing enough to meet the basic needs for adequate human survival.
Although an international poverty line is difficult to establish precisely due to differences in perceptions of poverty in currency and culture, a 2005 figure set the international poverty line at $1.25 USD per day per person (PPP) . This poverty line is meant to indicate extreme poverty such as that seen in the poorest countries of the developing world. Developing countries used to be known as third world countries, but the use of the term has fallen out of favor in academia due to its association with the Cold War, when the term was used to describe countries that were not aligned with capitalist countries nor communism.
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