Measuring Child Poverty in Hong Kong: Sensitivity to the Choice of Equivalence Scale

In September 2013, the Government of the Hong Kong Special Administrative Region established Hong Kong’s first official poverty line. The new poverty line is used as a major yardstick in social welfare policy formulation and in the allocation of public resources aimed at combating poverty; despite its importance, however, its robustness has not been examined. Using data from the 2011 Population Census, we examined the robustness of the official poverty line in measuring child poverty in Hong Kong through assessing the sensitivity of child poverty measures to the choice of different equivalence scales. The results show that the child poverty profile in Hong Kong is generally not sensitive to the choice of equivalence scale and that the official poverty line correctly identifies those children who live in poverty. Rates of child poverty among boys and girls of different ages, with different family backgrounds and living in households with different compositions, were calculated and ranked using different equivalence scales; these rankings were found to be very similar to those yielded by the official poverty measure. Thus, the choice of adult equivalence scale does not favour any subgroup. We also examined the child poverty profile in Hong Kong based on the official poverty measure and with our 2011 census data. We found that the children in our sample were more likely than the adults to live in poverty household; that more than half of the children who lived in poverty belonged to working poor families; and that children living in public housing were particularly likely to suffer from severe poverty. In light of these findings, we urge the government to prioritise taking measures aimed at lifting children out of poverty.     

Altruism Within the Family: A Comparison of Father and Mother Using Life Happiness and Life Satisfaction

Studies on intra-household allocation of resources show that exogenous increase in mothers’ income has larger effect on children’s outcomes than the same increase in fathers’ income, suggesting gender differences may exist in parents’ altruism towards their children. Using self-reported life happiness and life satisfaction, we investigate the differences by gender in mutual altruism between father and child as well as mother and child dyads in Singapore. We found that mutual altruism exists between mother and child, but not between father and child. These findings are robust to the measure of self-reported well-being. Further, we find that gender difference in altruism of fathers and mothers is not driven by the difference in the extent of future old age support desired by fathers and mothers from their children.     

The potential of child care tax credits to reduce poverty and welfare recipiency

As more and more mothers of young children enter the work force, interest in government financing of child care grows. The chief government subsidy for child care is the child care credit in the federal Internal Revenue Code. This is a nonrefundable credit and therefore provides benefits only to those with incomes high enough to require them to pay income tax. Yet of the $ 5.5 billion spent by the federal government on child care in 1986, this program accounted for $ 3.5 billion.This paper simulates the effects of expanding the child care tax credit by (1) doubling the reimbursement rates of the current credit; (2) making the credit refundable; and (3) both making the credit refundable and increasing its value for all families with income below $ 32,000.Results suggest that these changes will have modest effects on the income and earnings of mothers, and on the poverty gap and welfare recipiency. Costs, however, differ substantially. Doubling the value of the credit is far more expensive than either making the credit refundable or making it both refundable and more generous at the bottom of the income distribution. Making the credit refundable may cost taxpayers very little by leading to increases in hours worked and concomitant reductions in welfare payments.     

Child poverty and changes in child poverty

This article offers a cross-country overview of child poverty, changes in child poverty, and the impact of public policy in North America and Europe. Levels and changes in child poverty rates in 12 Organisation for Economic Co-operation and Development (OECD) countries during the 1990s are documented using data from the Luxembourg Income Study project, and a decomposition analysis is used to uncover the relative role of demographic factors, labor markets, and income transfers from the state in determining the magnitude and direction of the changes. Child poverty rates fell noticeably in only three countries and rose in three others. In no country were demographic factors a force for higher child poverty rates, but these factors were also limited in their ability to cushion children from adverse shocks originating in the labor market or the government sector. Increases in the labor market engagement of mothers consistently lowered child poverty rates, while decreases in the employment rates and earnings of fathers were a force for higher rates. Finally, there is no single road to lower child poverty rates. Reforms to income transfers intended to increase labor supply may or may not end up lowering the child poverty rate.     

Effects of public education and social security on fertility

Introducing a fertility decision and child care cost into an overlapping generations model with public education and social security, we examine the effects of these public policies on fertility. We show that an increase in income tax, which finances social security benefits and public investment in education, increases fertility. On the other hand, with a constant tax rate, a change in the allocation from social security benefits to public investment in education decreases fertility and, with a constant social security tax, the effect of education tax on fertility is neutral.      

养老保险现收现付制的挤出效应——一个内生生育率模型

文章在一个内生经济增长的OLG模型框架下研究现收现付制养老保险计划的挤出效应。具体考察公共养老金税率变动对家庭的消费与储蓄、生育选择以及经济增长的长期影响。结果表明,存在向上利他动机的情况下,挤出效应的大小取决于养老基金的规模,适度规模的公共养老金计划不会挤出私人储蓄。而有利于消费增加与经济增长;较大规模的公共养老金计划会对私人自愿储蓄与消费产生负面影响,并且对储蓄的挤出作用要大于对消费的挤出。人口老龄化进程在一定程度上缓解挤出效应,促进资本积累与经济增长。     

Private provision of public goods between families

We consider a two-stage voluntary provision model where individuals in a family contribute to a pure public good and/or a household public good, and the parent makes private transfers to her own child. We show not only that Warr’s neutrality holds, regardless of the different timings of parent-to-child transfers, but also that there is a continuum of Nash equilibria which individuals’ contributions and parental transfers are indeterminate, although the allocation of each’s private consumption and total public good provision is uniquely determined. Furthermore, impure altruism or productivity difference in supplying public goods may not break our results above.     

Child labour in the Era of HIV/AIDS in sub-Saharan Africa: A case study of Tanzania

Exploitation of child labour is an endemic problem in sub-Saharan Africa. The situation is increasingly worsening due to increasing poverty and HIV/AIDS. We carried out a study to understand how the AIDS epidemic facilitates the presence of child labour in Iringa Rural District in Tanzania. The findings revealed that children opt for early participation in the labour force due to the ever-increasing poverty existing at their household level. There is a correlation between poverty and HIV/AIDS in general, and particularly between HIV/AIDS and the poor socio-economic condition of orphans. Current interventions to stop child labour do not yield good results because of low level of awareness on child labour issues at village levels. The government and its partners, such as ILO, should improve the coordination between the district and the communities (villages) in order to make sure that communities at the village level are reached and assisted. Furthermore, reducing rural poverty is imperative if child labour is to be eliminated.     

Transfers to the old,government debt and demographic change

In this paper we take the view that policy makers (representing the interests of the living generations in one way or another) take the relationship between (explicit) intergenerational transfer systems (including public pension schemes) and government deficits into account. It is assumed that policy makers are behaving altruistically towards past and future generations. Given the behavioral model, an analysis is made of the effects of demographic changes (such as the baby-boom of the 1940s and 1950s and the decline of birth rates in the 1970s) on the decisions to be taken with respect to the tax rate of the public pension system and the size of government debt. From the analysis it appears that, with the assumption of altruistic decision-makers, periods of increasing or decreasing debt can occur alternately in periods of demographic change.     

Population aging, health care, and growth

This paper constructs a small open two-sector (health care and non-health care) overlapping generations model and investigates how changes in the demand for health care induced by population aging influence the economy’s employment structure and per capita income growth rate. We show that population aging induces a shift in labor from the non-health care sector to the health care sector and lowers the per capita income growth rate. This paper also investigates public policy for child care and demonstrates the existence of an intergenerational conflict between current and future generations concerning public policy on child care.     

Child Poverty Among Hong Kong Ethnic Minorities

This paper analyzes the data from the Population Census of 2011 to identify the characteristics of poor ethnic minority groups in Hong Kong and the factors that are associated with child poverty among these ethnic minorities. The results show that the child poverty level varies between different ethnic groups and that ethnic minorities from developing nations are likely to have a higher poverty level. In particular, Pakistani children have the highest poverty rate among all ethnic groups. The results also show that Pakistani, Nepalese, and Mixed (Chinese and Asian) nationalities have a higher child poverty rate than that of Chinese individuals who constitute the majority of the Hong Kong population. The main reason for this is that, unlike their Chinese counterparts, some of these ethnic minority households have not benefited from their own human capital or their length of exposure in the local society in Hong Kong. And even if they have benefited, the positive impact of these factors on ethnic minority households was much weaker compared to that of Chinese households. These results suggest that ethnic minorities need to be categorized as a separate group in order to assess their specific needs, and assimilation policies, especially support on Chinese language learning, need to be an integral part of the government’s poverty reduction strategy to reduce child poverty among ethnic minorities.     

Federal financing of child care: Alternative approaches and economic implications

This paper surveys alternative approaches to financing child care at the federal level and discusses their economic implications with respect to female labor force participation, fertility, child care demand and supply, and poverty. The current system of federal support for child care is seen to consist of a series of overlapping programs that tend to create inefficiencies and inequities in the distribution of child care benefits. Four basic principles of an ideal child care system are outlined, and a general two-tiered system of support is proposed that would satisfy these four principles. The two-tiered system is centered on a refundable tax credit considerably more progressive than the current child care tax credit. A simulation analysis indicates that the proposed refundable tax credit would not cost much more than many of the more popular child care bills currently being debated in Congress.     

The Simultaneous Effects of Socioeconomic Disadvantage and Child Health on Children’s Cognitive Development

Family socioeconomic status (SES) and child health are so strongly related that scholars have speculated child health to be an important pathway through which a cycle of poverty is reproduced across generations. Despite increasing recognition that SES and health work reciprocally and dynamically over the life course to produce inequality, research has yet to address how these two pathways simultaneously shape children’s development. Using longitudinal data from the Fragile Families and Child Wellbeing Study and marginal structural models, we ask three questions: (1) how does the reciprocal relationship between socioeconomic disadvantage and child health affect estimates of each circumstance on children’s cognitive development?; (2) how do their respective effects vary with age?; and (3) do family SES and child health have differential effects on cognitive development across population subgroups? The results show that the negative effects of socioeconomic disadvantage and poor health are insensitive to their reciprocal relationships over time. We find divergent effects of socioeconomic disadvantage and poor health on children’s cognitive trajectories, with a widening pattern for family SES effects and a leveling-off pattern for child health effects. Finally, the effects of socioeconomic disadvantage are similar across all racial/ethnic groups, while the effects of child health are largely driven by white children. We discuss theoretical and policy implications of these findings for future research.     

Social Structure and Child Poverty

Child poverty, as a critical indicator of the QOL, is intricately related to the social structure of the community. This hypothesis is explored for the 159 counties of Georgia for the year 2000. The influence of demographic, economic, family and health factors upon child poverty are explored through models of total, black and white child poverty. Factor analyses of factors uncovered by the models identify the social-structural features of counties in relation to child poverty. Counties considered “Deprived/rural” harbor child poverty, while counties described as “Business/money” and “Progressive/urban” bear a negative relationship to child poverty. Positively associated with child poverty are residential stability, unemployment, low educational achievement, youth and age dependency, single-parent female household heads with children, grandparent child care, and health disability of child, elders and of working-age persons. Structural factors militating against child poverty are persons with greater education, higher population density, out migration, larger married population, higher retail sales, larger middle class families, higher weekly wages, and other structural features of the county.     

The mechanisms mediating the effects of poverty on children’s intellectual development

Although adverse consequences of poverty for children are documented widely, little is understood about the mechanisms through which the effects of poverty disadvantage young children. In this analysis we investigate multiple mechanisms through which poverty affects a child's intellectual development. Using data from the NLSY and structural equation models, we have constructed five latent factors (cognitive stimulation, parenting style, physical environment, child's ill health at birth, and ill health in childhood) and have allowed these factors, along with child care, to mediate the effects of poverty and other exogenous variables. We produce two main findings. First, the influence of family poverty on children's intellectual development is mediated completely by the intervening mechanisms measured by our latent factors. Second, our analysis points to cognitive stimulation in the home, and (to a lesser extent) to parenting style, physical environment of the home, and poor child health at birth, as mediating factors that are affected by lack of income and that influence children's intellectual development.     

The Importance of Early Childhood Poverty

Most poor children achieve less, exhibit more problem behaviors and are less healthy than children reared in more affluent families. We look beyond correlations such as these to a recent set of studies that attempt to assess the causal impact of childhood poverty on adult well-being. We pay particular attention to the potentially harmful effects of poverty early in childhood on adult labor market success (as measured by earnings), but also show results for other outcomes, including out-of-wedlock childbearing, criminal arrests and health status. Evidence suggests that early poverty has substantial detrimental effects on adult earnings and work hours, but on neither general adult health nor such behavioral outcomes as out-of-wedlock childbearing and arrests. We discuss implications for indicators tracking child well-being as well as policies designed to promote the well-being of children.     

From austerity to prosperity? Migration and child poverty among mainland and island Puerto Ricans

Analyses of migrants' economic circumstances typically use the native-born in the destination as a comparison group. We use the 1990 Census Public Use Microdata Samples for the United States and Puerto Rico to demonstrate the benefits of a comparative approach that includes data from both the origin and the destination. Specifically, the primary objective is to determine how and why the risk of child poverty is associated with migration from Puerto Rico to the United States. The results show that migration reduces the risk of child poverty, partly because better jobs are available on the mainland. Employment, human capital, family structure, and public assistance cannot completely explain observed differences. The results also show that the economic benefits of migration continue for the native-born on the mainland and that return migration to Puerto Rico is associated with impoverishment.     

Incidence, Depth and Severity of Children in Poverty

Recently, the first ever estimate of the number of children living poverty in developing countries was undertaken. The incidence of child poverty was estimated by establishing how many children suffer severe deprivation in at least one out of seven indicators which are internationally recognized as their rights as well as constitutive of poverty. This is a major step forward in the analysis of poverty. In this paper, we generalize these findings on the incidence of children living in poverty by exploring how to estimate the depth and severity of child poverty. Two countries can have the same proportion of children living in poverty, however, the actual plight of children could be very different depending on how many deprivations, on average, children suffer. In addition, even if they suffer from the same average number of deprivations, these deprivation could be the same for all children or be very unevenly distributed. We show how these considerations can be used to estimate the depth and severity of poverty. We use regional data to provide applied examples of this methodology. The method proposed in this paper is similar to the one used to estimate the incidence, depth and severity of income poverty. The paper also offers some possible generalizations and ways forward for future research.     

Multidimensional Poverty in Nicaragua: Are Female-Headed Households Better Off?

The recognition of poverty as a multidimensional concept has led to the development of more adequate tools for its identification. By allowing for subgroup and regional decompositions, those instruments are useful to allocate public action where most needed. This paper applies the Alkire and Foster (2011a) Multidimensional Poverty Index (MPI) to study single-mother and biparental families in Nicaragua, modifying its original structure to match more closely with the country’s current structural problems. Using Nicaragua’s last Demographic and Health Survey (DHS 2011/2012), our multidimensional poverty figures contrast with the government’s national poverty line estimates, suggesting that income poverty overestimates the number of poor people. Thus, our MPI can help as a complement for traditional consumption poverty and Basic Needs analysis; even extending the exploration by using other official household surveys. On the other hand, multidimensional poverty analysis found poverty dominance of male-headed families over single-mother and female-headed biparental families, which serves to contradict the notion of women being more vulnerable than men. Within the MPI, the most important contributor was the Living Standards dimension, composed by indicators directly related to housing conditions, and the second most deprived dimension was Education. A strong policy implication that arises from our findings is the reduction of the urban–rural poverty gap. Specifically, our findings exalt the need for governmental policies directed to reduce Nicaragua’s housing and educational deficits as a priority, particularly in rural areas.     

Trends in Child Poverty in Hong Kong Immigrant Families

In Hong Kong, child poverty is a serious social problem which may lead to intergenerational poverty, but nevertheless only a few studies have examined this issue, particularly for immigrant families. Using Census data (5 %) from 1981, 1991, 2001, and 2011, we assessed child poverty rates in the past three decades and identified key variables contributing to changes in the risk of child poverty for both immigrant and local families. Our results indicate that child poverty rates in Hong Kong-born families have fluctuated between 14.3 and 15.8 % over the past three decades, while for immigrant families they have increased steadily and substantially from 18.1 % in 1981 to 36.5 % in 2001 and then to 37.5 % in 2011. We show that the increase in immigrant child poverty is associated with changes in the Hong Kong economy that have made it more difficult for such families to adapt to the host society, especially in the 1990s and that this negative effect offset the positive influence of compositional changes among this group of immigrant families in terms of parental education levels and family size. The gap between immigrant and local families in terms of child poverty risk is mainly due to the fact that during the 1990s the negative effect of contextual changes in Hong Kong was cancelled out by the beneficial impact of compositional changes for local families, but not for immigrant families where the latter effect was minimal.