Measuring the impact of price changes on poverty

This paper develops a methodology to measure the impact of price changes on poverty measured by an entire class of additive separable poverty measures. This impact is captured by means of the price elasticity of poverty. The total effect of changes in price on poverty is explained in terms of two components, income and distribution effects. The income effect measures the change in poverty when all prices increase uniformly, whereas the distribution effect captures the change in poverty because of changes in relative prices. Using this decomposition, the paper derives an empirically operational index, which reveals whether the price changes have been pro-poor or anti-poor. The paper also derives a new price index for the poor. While this index can be computed for any poverty measures, our empirical analysis applied to Brazil is based on three poverty measures, the head-count ratio, the poverty gap ratio and the severity of poverty. The empirical analysis shows that price changes in Brazil during the 1999–2006 periods have been anti-poor. Nevertheless, during the last 2 to 3 years, the price changes have affected the poor less adversely than the non-poor.     

Child welfare workers’ constructions and causal explanations of poverty

Studying the perceptions of the causes of poverty is warranted because individual perceptions shape behavior toward poor people and actions related to poverty. Prior studies relying heavily on survey methodology fail to capture deeper and fuller meanings participants apply to poverty. This study explores how child welfare workers understand poverty by examining their definitions of, and what they see as causal explanations of, poverty. Individual interviews were conducted with 30 child welfare workers throughout a Midwestern state. Analysis indicated that workers all defined poverty as ‘not getting basic needs met,’ corresponding to the underlying assumptions of absolute poverty measures. Workers simultaneously augmented these definitions using other poverty constructions, namely the federal guidelines and more complex views – conceptually in line with relative poverty measures – that account for factors outside income or consumption. Workers’ causal explanations of poverty were multifaceted. Causal explanations included structural/systemic, individual, family/generational, and luck, with the first three being most prominent. These findings have implications for practice and training in the child welfare system as it relates to poverty.     

Poverty measurement: the critical comparison value

The Foster–Greer–Thorbecke (FGT) family of poverty-measures is commonly used when comparing income distributions with respect to poverty. Within this framework, the poverty ranking will be sensitive to the choice of poverty aversion parameter (defining a particular FGT poverty-measure). If we content ourselves with applying a few specific parameter values, then we may demand too little in order to claim robustness in our poverty comparisons. On the other hand, we may demand too much if we only work with FGT poverty-measure quasi orderings established by considering every possible parameter value. An alternative approach may be to report the number of parameter values representing possible reversal points in our poverty ranking—what we call critical comparison values—and leave the final evaluative step to the relevant decision-makers. By applying a generalized version of Descartes’ Rule of Signs, we show that the number of critical comparison values depends on the number of times the cumulative distribution functions intersect.

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The Foster–Greer–Thorbecke (FGT) poverty measures: 25 years later

Twenty-five years ago, the FGT class of decomposable poverty measures was introduced in Foster, Greer, and Thorbecke (Econometrica 52:761–776, 1984). The present study provides a retrospective view of the FGT paper and the subsequent literature, as well as a brief discussion of future directions. We identify three categories of contributions: to measurement, to axiomatics, and to application. A representative subset of the literature generated by the FGT methodology is discussed and grouped according to this taxonomy. We show how the FGT paper has played a central role in several thriving literatures and has contributed to the design, implementation, and evaluation of prominent development programs; the breadth of its impact is evidenced by the many topics beyond poverty to which its methodology has been applied. We conclude with a selection of prospective research topics.     

Health and income poverty in Ireland, 2003�C2006

Recent advances in the measurement of bi-dimensional poverty are applied to a measure of poverty which incorporates income and health poverty. The correlation between income and poverty is examined using the Receiver Operating Characteristics curve. Following from this uni-dimensional and bi-dimensional poverty indices are calculated for Ireland for the years 2003–2006. Income poverty shows a fall over the period while health poverty falls and then rises. Bi-dimensional poverty generally moves in line with the individual indices depending upon the relative weight for each dimension. The results are generally not sensitive to the degree of poverty aversion or the substitutability between the different dimensions of poverty.     

The Measurement of Multidimensional Poverty

Many authors have insisted on the necessity of defining poverty as a multidimensional concept rather than relying on income or consumption expenditures per capita. Yet, not much has actually been done to include the various dimensions of deprivation into the practical definition and measurement of poverty. Existing attempts along that direction consist of aggregating various attributes into a single index through some arbitrary function and defining a poverty line and associated poverty measures on the basis of that index. This is merely redefining more generally the concept of poverty, which then essentially remains a one dimensional concept. The present paper suggests that an alternative way to take into account the multi-dimensionality of poverty is to specify a poverty line for each dimension of poverty and to consider that a person is poor if he/she falls below at least one of these various lines. The paper then explores how to combine these various poverty lines and associated one-dimensional gaps into multidimensional poverty measures. An application of these measures to the rural population in Brazil is also given with poverty defined on income and education.     

Evaluating the Effectiveness and Efficiency of Hong Kong Welfare Programmes in Reducing Child Poverty

This paper examines the effectiveness and efficiency of welfare programmes that are relevant to child poverty reduction in Hong Kong. We employ data from a cross‐sectional survey of a representative sample of families, conducted in 2015 through face‐to‐face interviews. Our results indicate that all four welfare programmes were inadequate in alleviating child poverty. This was either due to the deep poverty gap to be filled or high rates of exclusion error. Most programmes are also inefficient because of inclusion error. We conclude by suggesting some policy implications for the welfare programmes.     

‘What can I do’? Child welfare workers’ perceptions of what they can do to address poverty

Within the field of child welfare, critical questions have been posed about the intersecting issues of child maltreatment and poverty. The study of the quality and nature of this intersection has continued relevance in light of evidence showing the increased likelihood of maltreatment of children living in poverty. Although child welfare workers interact directly with families involved with the child welfare system, the study of workers’ perceptions of whether or not they address families’ poverty and, if so, how they go about it has not yet been conducted. The study presented begins to address this gap. Analysis from individual interviews with 30 child welfare workers revealed that they differed in their perception of whether or not poverty should be addressed by child welfare and how. Findings suggest workers do what they can despite various barriers, including families’ limitations and the fragile US social welfare safety net. Based on the findings, current practice models and policies that impact poverty and child maltreatment reduction are discussed.     

Minimum wages and poverty with income-sharing

Textbook analysis tells us that in a competitive labor market, the introduction of a minimum wage above the competitive equilibrium wage will cause unemployment. This paper makes three contributions to the basic theory of the minimum wage. First, we analyze the effects of a higher minimum wage in terms of poverty rather than in terms of unemployment. Second, we extend the standard textbook model to allow for income-sharing between employed and unemployed persons in society. Third, we extend the basic model to deal with income sharing within families. We find that there are situations in which a higher minimum wage raises poverty, others where it reduces poverty, and yet others in which poverty is unchanged. We characterize precisely how the poverty effect depends on four parameters: the degree of poverty aversion, the elasticity of labor demand, the ratio of the minimum wage to the poverty line, and the extent of income-sharing. Thus, shifting the perspective from unemployment to poverty leads to a considerable enrichment of the theory of the minimum wage.      

Charitable conservatism, poverty radicalism and inequality aversion

In his Presidential Address to the European Economic Association, Tony Atkinson introduced the idea of a “charitable conservatism” position in public policy, which “exhibits a degree of concern for the poor, but this is the limit of the redistributional concern and there is indifference with respect to transfers above the poverty line.” This contrasts with the perspective of poverty indices, which give zero weight to those above the poverty line, which we call “poverty radicalism,” and with standard “inequality aversion” where the weights decline smoothly as we move up the income scale. The object of this paper is, first, to clarify the interrelationships between charitable conservatism, poverty radicalism and inequality aversion. We do this by showing how the patterns of welfare weights to which each of these gives rise are related to each other. Secondly, we are concerned to demonstrate the implications of these different views for optimal income taxation. In terms of levels and patterns of marginal tax rates, we show that charitable conservatism and poverty radicalism are on a continuum, and by choice of low or high inequality aversion one can approximate either outcome fairly well.     

Family and neighborhood welfare dependency and sons' labor supply

This article tests four models of how parental and childhood welfare use affects sons' labor supply: the correlated disadvantages model, Wilson's structural-environmental model, Mead's welfare culture model, and Murray's incentives model. Past research is extended by including measures of all seven factors that these models predict will shape sons' labor supply: parental welfare use, neighborhood welfare use, parental income, family noneconomic resources, neighborhood resources, labor market conditions, and state welfare benefits. There are four main findings. First, welfare use in the childhood neighborhood has no effects on sons' work hours. Second, only one group of sons is affected by parental welfare use: black sons' whose parents average $7,500 or more in welfare income per year. Third, black sons' adult work hours are strongly predicted by parental poverty and by labor market conditions; together these account for half the estimated relationships between heavy parental welfare use and black sons' labor supply. Fourth, parents' and neighbors' work hours strongly predict nonblack sons' labor supply. This research was supported by Assistant Secretary for Planning and Evaluation, Department of Health and Human Services, by the Rockefeller Foundation, and by the Office of the Vice-President for Research at the University of Michigan. We are grateful to John Bound, Sheldon Danziger, Greg Duncan, Martha Hill, and an anoymous reviewer for helpful comments and advice, to Marguerite Grabarek and James Kunz for programming, and most of all to Wendy Niemi for her patient, accurate, and efficient typing. Her research interests include poverty, social stratification, and labor economics. His research interests include rural poverty, poverty neighborhoods, and intergenerational poverty.     

A poverty-inequality trade off?

The idea that developing countries face a trade off between poverty and inequality has had considerable influence on thinking about development policy. The experience of developing countries in the 1990s does not, however, reveal any sign of a systematic trade off between measures of absolute poverty and relative inequality. Indeed, falling inequality tends to come with falling poverty incidence. And rising inequality appears more likely to be putting a brake on poverty reduction than to be facilitating it. However, there is evidence of a trade off for absolute inequality, suggesting that those who want a lower absolute gap between the rich and the poor must in general be willing to see lower absolute levels of living for poor people.Martin Ravallion: These are the views of the author, and need not reflect those of the World Bank or any affiliated organization.     

The welfare/self-sufficiency gap among single mothers through theoretical lenses

ABSTRACT

Poverty has been a recurring issue in America since time immemorial and become the target of a panoply of corrective measures from the federal government. One of these measures is, of course, the Temporary Assistance to Needy Families (TANF), the key welfare policy under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. Since its inception, TANF has constantly been the subject of vehement controversies among politicians, lawmakers, community advocates, social researchers, and government officials. Indeed, there has been a growing concern about the effectiveness of the program in galvanizing economically disadvantaged families toward economic self-sufficiency. This paper presents a historical overview of the political context that led to the passage of the TANF policy, identifies barriers associated with TANF implementation, explains the concept of self-sufficiency, and critically analyzes the gap between welfare receipt and economic self-sufficiency through the lenses of four theoretical benchmarks: policy design and social construction, culture of poverty, racial classification, and social control. Implications for research are discussed.     

相对贫困的理论与政策聚焦 ——兼论建立我国相对贫困的治理体系

贫困一直是世界各国首要解决的社会问题。本文基于我国全面进入小康社会,需要建立解决相对贫困长效机制这一战略转换背景,从相对贫困与绝对贫困关系入手,围绕相对贫困内涵的争论,聚焦我国相对贫困的表现形式,并基于我国国情,提出建立相对贫困治理体系的建议。在机制上,充分发挥基本公共服务的作用,建立相对贫困人口发展的基础性机制;形成"政府主导、社会参与、市场促进"的贫困治理的整体性机制;建立干预代际贫困传递的阻断性机制。在具体措施上,围绕低收入家庭,要建立生活负担减免制度;健全以生产帮扶和就业帮扶为主的专项援助制度;按需救助,对低收入户开展"救助会诊";建立相对贫困家庭陪伴式服务制度。     

Poverty in Kathmandu: What do subjective and objective economic welfare concepts suggest?

Conventional definitions suggest that the concept of economic welfare underpins poverty. Unsettled issues abound with respect to using subjective versus objective approaches, however. Using micro-level survey data, this paper explores subjective and objective concepts of economic welfare to identify characteristics of poverty in Kathmandu. While application of the subjective and objective concepts of economic welfare yields rather different characteristics, the former appears to be more comprehensive with ability to incorporate the latter in poverty measurement and analysis. This indicates that subjective assessments of households can provide a more realistic picture of poverty when used with actual income and consumption data. Although this paper does not seek to develop any particular poverty standard, it provides a useful framework for integrating subjective and objective approaches with a promise of more comprehensive poverty measurement outcomes.     

Sequential procedures for poverty gap dominance

Poverty evaluations differ from welfare evaluations in one significant aspect, the existence of a threshold or reference point, the poverty line. We build up normative evaluation models in which comparisons are made taking distances from this reference point rather than from the origin to be ethically relevant, by focussing upon poverty gaps and not incomes. When poverty lines differ for different groups in a socially heterogeneous population, choosing poverty gaps instead of incomes as the relevant indicator brings in normatively appealing classes of poverty indices not previously accommodated, for which poverty comparisons are implemented through sequential poverty gap curves (or poverty gap distributions) dominance. These conditions are logically related to those suggested by Atkinson and Bourguignon (Arrow and the foundations of the theory of economic policy, Macmillan, London, 1987) and Bourguignon (J Econom 42:67–80, 1989) for welfare comparisons. However, the proportion of poor individuals in the society and their average poverty gap play a role in our comparisons, though they do not in the existing poverty dominance criteria for heterogeneous populations.     

Branch plants and poverty in the American South

An alternative to the widely accepted hypothesis that big business has a negative impact on community welfare is tested with data from 445 nonmetropolitan counties in the American South. We argue that the appropriate counterhypothesis is not that branch plants have a positive impact on community welfare, because that and similar formulations simply perpetuate the nonsociological approach of the early hypotheses. An interaction formulation that sees community structure as mediating the impact of branch plants better explains differentials in our three criteria of welfare—per capita income, percent below the poverty line, and infant mortality. This explanation predicts positive welfare when pluralism and urbanization are high and branch plants are frequent, and lower welfare when one or both of these is low. Tests using discriminant analysis support the interaction hypothesis while providing little evidence for either the direct positive or negative impact hypotheses.     

An Exploration of the Influence of Household Poverty Spells on Mortality Risk

Household poverty is dynamic and characterized in terms of spells. Exposure to poverty accumulates through the recurrence and persistence of spells, leading to divergent family adaptive strategies that contribute to mortality risk. The data set used in this study is longitudinal and contains socioeconomic and demographic data of a nationally representative sample. The findings are (a) poverty significantly increases mortality risk, controlling for age, gender, and race; (b) the first spell is especially potent, and mortality risk declines rapidly during subsequent spells; and (c) both direction and strength of these estimates are robust to marital status, but power diminishes significantly net of education and employment.     

Three perspectives on the mismatch between measures of material poverty

The two most prominent measures of material poverty within contemporary European poverty analysis are low income and material deprivation. However, it is by now well‐known that these measures identify substantially different people as being poor. In this research note, I seek to demonstrate that there are at least three ways to understand the mismatch between low income and material deprivation, relating to three different forms of identification: identifying poor households, identifying groups at risk of poverty and identifying trends in material poverty over time. Drawing on data from the British Household Panel Survey, I show that while low income and material deprivation identify very different households as being poor, and display distinct trends over time, in many cases they identify the same groups at being at risk of material poverty.     

Poverty measures incorporating variable rate of alleviation due to population growth

If the absolute number of poor people goes up, but the fraction of people in poverty comes down, has poverty gone up or gone down? Issues like lack of scale homogeneity in resource allocation for poverty eradication lead practitioners and economists to have two different views of poverty when population size changes. This paper attempts to put these two conceptions of poverty into a common framework. We present an axiomatic development of a family of poverty measures, which is a generalization of the well known FGT class of measures, without a population replication axiom. This family has an intuitive link to standard measures, but it also allows intermediate positions between one or other of “the absolute numbers” or the “fraction in poverty” conception. We hope that this family will prove useful in empirical and policy work.