2021 Poverty Projections: Assessing the Impact of Benefits and Stimulus Measures

In an earlier brief, we estimated that the American Rescue Plan Act, enacted in March 2021, would reduce the 2021 annual poverty rate to 8.7 percent (Wheaton et al. 2021). We now project a 2021 poverty rate of 7.7 percent for 2021. The revised projection accounts for improvements in the economy, incorporates updated state-level information on pandemic-related policies, and improves the method for weighting the data to reflect 2021. Both the earlier poverty projections and these updated projections use the Supplemental Poverty Measure, which allows a more comprehensive assessment of families’ economic well-being than the official poverty measure. The projections, developed using the Urban Institute’s Analysis of Transfers, Taxes, and Income Security model, take into account expected levels of employment and income in 2021, safety-net benefits, taxes and tax credits, state “back to work” bonuses, and federal and state stimulus checks.