Family Financial Management and Individual Deprivation

A core assumption in conventional poverty measurement is that household members share equally in total household income. This paper focuses on heterosexual couple households and asks to what extent male and female partners may derive different benefits from total couple resources. Drawing on the 2010 Irish Survey on Income and Living Conditions module, we examined the couple financial regime, by which we mean which partners received income, whether the income was from work, the extent to which income was contributed for the benefit of other household members and responsibility for decision-making. We explored whether the couple’s financial regime was associated with different living standard outcomes for the partners. Among the findings was the beneficial impact of having income from work and of shared responsibility for decision-making. The paper concludes by pointing to some implications for our understanding of power and bargaining in couples.     

Money, power and inequality within marriage

The growing body of research on the intra-household economy suggests that in couple households there are significant associations between control over household finances and more general power within the household. However, most earlier research has been based on relatively small samples. Here a major new British data set, produced by the Social Change and Economic Life Initiative, is used to examine the relations between money, power and inequality within marriage. Six different systems of financial allocation are identified. The results suggest that even when couples nominally pool their money, in practice either husband or wife is likely to control the pool. In only one fifth of couples was the pool jointly controlled, but these households were characterised by the highest levels of equality between husband and wife in terms of decision making, experience of deprivation and access to personal spending money. Findings from the study indicate a complex pattern of relationships between household income level, household allocative system and gender. Female control of finances, though it was associated with greater decision-making power for women, did not protect them against financial deprivation; however, male control of finances, especially when it took the form of the housekeeping allowance, did serve to protect the financial interests of men in comparison with women. Gender inequality was least in households with joint control of pooled money and greatest either in low income households or in higher income households with male control of finances.     

Financial Strain and Participation in the Supplemental Nutrition Assistance Program

Participation in the Supplemental Nutrition Assistance Program (SNAP) has increased over the past decade. Although poverty and sudden financial shock faced by households via unanticipated adverse events, such as sudden loss of income, are among major contributors, the findings of our study suggest that having an adequate stock of savings and financial assets might reduce the probability of household SNAP participation. Using data from the Panel Study of Income Dynamics, we tested whether a household’s emergency savings, asset poverty, and debt burden could predict SNAP participation separately from the effects of income and program participation. Results demonstrate that a household’s lack of emergency savings and asset inadequacy increased the probability of its SNAP participation. Implications for financial practitioners and policy makers are discussed.     

Measuring Differences in Living Standards Within Households

This article presents a quantitative approach used to investigate differences in living standards between spouses within households. Adopting a specially adapted, standard poverty measurement approach—nonmonetary indicators—it explores differences between spouses in terms of possessions and access to certain goods and services and the control and management of household resources. Using data from a unique module in the Living in Ireland Survey (N = 2,248 individuals) as an exemplar, the article focuses on 3 methodological issues: (a) the development of specially designed nonmonetary indicators to explore differences in living standards within households rather than between households (including the role played by qualitative findings in developing those indicators and how focus groups were used to assess and validate the method), (b) the use of multivariate analysis to assess the impact of a wife's independent income in ameliorating differences in living standards between spouses, and (c) the deployment of a mechanism for use in quantitative surveys to record spousal presence and allow measurement of any subsequent difference in individual responses.     

The Impact of Educational Pairing and Urban Residency on Household Financial Investments in Urban China

With China’s rise in the global economy, more couples participate in financial investing. Using the 2011 China Household Finance Survey, we examined factors influencing stock and fixed-income investments in the cities. Couples with urban residency were more likely to invest than couples without urban residency. Compared to traditional couples with highly-educated husbands only, couples with only highly-educated wives invested similarly, whereas couples with two highly- (less-) educated spouses were more (less) likely to invest. Further, we investigated how these relationships were mediated by household income and wealth, financial literacy, information acquisition, and risk tolerance. Overall, our findings suggest that household investing is shaped by both family structure (i.e., spouses’ educational pairing) and institutional advantage (indicated by urban residency).     

The effects of perceived locus of control and perceived income adequacy on satisfaction with financial status of rural households

The purpose of this study is to examine the relationships among selected socioeconomic variables — perceived locus of control, perceived income adequacy, and satisfaction with financial status. Results of the study indicate that age, household income, household net worth, perceived locus of control, and perceived income adequacy are significantly related to satisfaction with financial status. Household income and household net worth have indirect effects on satisfaction through perceived locus of control and perceived income adequacy. Perceived locus of control also has an indirect effect on satisfaction through perceived income adequacy. These findings suggest that counselors and educators should emphasize the importance of perceptions of income adequacy and control over financial aspect in their courses and programs.Journal Paper No. J-14499 of the Iowa Agriculture and Home Economics Experiment Station, Ames, Iowa. Project No. 2809.His research interests include consumer credit and family resource management. He received his Ph.D. from Iowa State University in 1993.Her research interests include family financial management and consumer bankruptcy. She received her Ph.D. from the University of Missouri.     

Besoins individuels et collectifs: Nanacatlan,Mexico

The author intends both to describe a native credit institution in a peasant community and to analyse its overt and covert functions. The community fund, managed by the local authority (presidencia auxiliar) is theoretically available to all household heads who can show solvency (e.g., by pawning a piece of property, usually land). Apart from assisting peasants who face a shortage of cash, another overt function of the system is to finance, with the interests which are paid back on the loans, the functioning of the local administration. Because of the great economic discrepancies between peasants (50 per cent of them own no land, while 2.5 per cent own 30 per cent of the land) one real, although covert, function of the credit institution is to channel a substantial amount of cash to the local upper class (which has little access to banking facilities). Therefore it actually enhances their economic domination over the majority of villagers, which fact allows us to understand the strict control they have exerted over the management of the fund since its foundation, some 40 years ago.     

Household Finance and Food Insecurity

Despite repeated expansions of federal food assistance, food insecurity and hunger continue to affect many Americans. While job loss and poverty are among major contributors, theoretical and empirical literature suggest that households’ ability to borrow and save might provide a buffer protecting from food insecurity. Using data from the Panel Study of Income Dynamics, we tested whether liquidity constraint, asset inadequacy, and insolvency risk defined based on financial ratios could predict household food insecurity separately from the effects of income and program participation. Results showed that a household’s liquidity constraint and asset inadequacy were linked with increased risk of food insecurity at all income levels, although the association was strongest among poor households and those with incomes slightly above the federal food assistance eligibility threshold. Unlike indications from qualitative literature, financial constraint appeared to be an exogenous determinant of household food insecurity. Implications for financial practitioners and policymakers are discussed.     

Factors Linked with Coparenting Support and Conflict After Divorce

We examined the relationship between personal and interpersonal indicators of postdivorce adjustment and dimensions of coparenting (support, overt conflict, covert conflict) using data from 176 recently divorced mothers. Mothers’ satisfaction with the divorce decree, perceptions of fathers as important for child development, and being satisfied with fathers’ parenting were associated with more supportive coparenting. Mothers’ satisfaction with the divorce decree and fathers’ parenting were associated with less overt conflict. Factors differed for mothers’ reports of their own and their former spouses’ use of covert conflict behaviors, with these factors linked to satisfaction with the divorce decree and perceived stress, respectively.     

The impacts of the food,fuel and financial crises on poor and vulnerable households in Nigeria: A retrospective approach to research inquiry

This article examines the impacts of the financial, food and fuel crises on poor and vulnerable households in two states of Nigeria: Lagos and Kano. It uses retrospective household‐level data to analyze the impacts of induced price variability on household welfare. The results indicate that aggregate shocks have significant adverse effects on household consumption, schooling and child labour decisions, with a degree of impact heterogeneity across regions and rural and urban areas of the country. We find that the coping strategies adopted by the poor to deal with the short‐term effects of the crises can lock households in a low‐income equilibrium or poverty trap. Provided that covariate shocks exacerbate these effects, they become central for policy design.     

The concept and measurement of asset poverty: Levels, trends and composition for the U.S., 1983–2001

American prosperity in the second half of the 1980s together with the booming economy of the 1990s created the impression that American households have done well, particularly in terms of wealth acquisition. In this paper, we develop the concept of “asset poverty” as a measure of economic hardship, distinct from and complementary to the more commonly used concept of “income poverty.” We define a household with insufficient assets to enable it to meet basic needs (as measured by the income poverty line) for a period of three months to be asset poor. The results reveal that in the face of the large growth in overall assets in the U.S. and a fall in standard income poverty over the period from 1983 to 2001, the level of asset poverty increased from 22.4 to 24.5 percent. We also find that asset poverty rates for blacks and Hispanics are over twice those for whites; that asset poverty rates fall monotonically with both age and education; that they are much higher for renters than homeowners; and that by family type they range from a low of 5 percent for elderly couples to 71 percent for female single parents.     

Are income poverty and perceptions of financial difficulties dynamically interrelated?

An individual’s economic ill fare can be assessed both objectively, looking at one’s income with reference to a poverty line, or subjectively, on the basis of the individual’s perceived experience of financial difficulties. Although these are distinct perspectives, income poverty and perceptions of financial difficulties are likely to be interrelated. Low income (especially if it persists) is likely to negatively affect perceptions of financial difficulties and, as recently suggested by the behavioural economics literature, (past) subjective sentiment may in return influence individual’s income generating ability and poverty status. The aim of this paper is to determine the extent of these dynamic cross-effects between both processes. Using Luxembourg survey data, our main result highlights the existence of a feedback effect from past perceived financial difficulties on current income poverty suggesting that subjective perceptions can have objective effects on an individual’s behaviour and outcomes.     

Comparing poverty and deprivation dynamics: Issues of reliability and validity

In this paper we seek to establish if earlier findings relating to the relationship between income poverty persistence and deprivation persistence could be due to a failure to take measurement error into account. To address this question, we apply a model of dynamics incorporating structural and error components. Our analysis shows a general similarity between latent poverty and deprivation dynamics. In both cases we substantially over-estimate the probability of exiting from poverty or deprivation. We observe a striking similarity across dimensions for both observed and latent outcomes. In both cases levels of poverty and deprivation persistence are higher for the latent case. However, there is no evidence that earlier results relating to the differences in the determinants of poverty and deprivation persistence are a consequence of differential patterns of reliability. Taking measurement error into account seems more likely to accentuate rather than diminish the contrasts highlighted by earlier research. Since longitudinal differences relating to poverty and deprivation cannot be accounted for by measurement error, it seems that we must accept that we are confronted with issues relating to validity rather than reliability. Even where we measure these dimensions over reasonable periods of time and allow for measurement error, they continue to tap relatively distinct phenomenon. Thus, if measures of persistent poverty are to constitute an important component of EU social indicators, a strong case can be made for including parallel measures of deprivation persistence and continuing to explore the relationship between them.     

The social consequences of unemployment in hungary—a household perspective

In this article the following hypotheses are tested using the Hungarian Household Panel Survey and the SOCO data: (a) Poverty is more likely to be felt by ‘unemployed’ households (i.e. households in which one or more members are unemployed) than by ‘non‐unemployment’ households (i.e. households in which none of the members are unemployed); and (b) A household is more likely to be poor if the head of the household becomes unemployed rather than if the spouse or one of the elder children do. The analysis shows that unemployment is closely related to all aspects of poverty (e.g. income, expenditure, and subjective‐poverty), but this association is especially strong in the case of income. It also demonstrates that poverty is more likely when the head of the household, rather than any other member of the household, becomes unemployed. After controlling for all variables we see that when the head of the household becomes unemployed the probability of being poor increases only with regard to income‐ and subjective‐poverty. Wealth‐ and housing‐poverty are not influenced by unemployment in the household. By comparison, in the other Central European countries, when the head of the household becomes unemployed, the probability of being poor increases in all aspects of poverty. This finding suggests that unemployment in Hungary seems to be less devastating than in other post‐socialist countries.     

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.     

Inference for the measurement of poverty in the presence of a stochastic weighting variable

Empirical applications of poverty measurement often have to deal with a stochastic weighting variable such as household size. Within the framework of a bivariate distribution function defined over income and weight, I derive the limiting distributions of the decomposable poverty measures and of the ordinates of stochastic dominance curves. The poverty line is allowed to depend on the income distribution. It is shown how the results can be used to test hypotheses concerning changes in poverty. The inference procedures are briefly illustrated using Belgian data. An erratum to this article can be found at     

Is Household Wealth Sustainable? An Examination of Asset Poverty Reentry After an Exit

This paper analyzed the influence of financial behaviors on the duration out of asset poverty while controlling for households’ life cycle and demographic characteristics. We found evidence for the existence of structural barriers to asset acquisition. Asset accumulation at or above levels equal to nine-months worth of income at the income-poverty level was important for improving a household’s odds of permanently escaping asset poverty, but a linear relationship between asset accumulation and the likelihood of returning to asset poverty did not emerge. Moreover, minimizing debt and diversifying the asset portfolio to include more productive assets were positively related to maintaining assets; but households should also consider the risks associated with portfolio allocations.     

Researching Within‐Household Distribution: Overview,Developments, Debates,and Methodological Challenges

Research into intrahousehold finances challenges key assumptions about the family as a unitary whole, investigates the extent of sharing within it, examines mechanisms of control and allocation of resources, and reveals the personalized nature of different monies. This article presents an overview of research on within‐household distribution (understood as both outcome and process). It discusses major questions addressed, including inequalities between (gendered) individuals and the potential reasons for these. It outlines significant developments and debates, within qualitative research in particular, in relation to the unit of analysis (traditionally, the married couple), the texture and meaning of financial dealings within couples, and the tensions between autonomy and equal sharing as values. It then discusses several key methodological challenges, and concludes by highlighting some policy implications of central research messages. Throughout, it draws on and discusses the other articles in this special section, which explore key methodological issues in researching within‐household distribution.     

Measuring the effect of spell recurrence on poverty dynamics—evidence from Spain

Accounting for the time individuals spend below the poverty line is an important dimension in order to design social policies to fight against poverty. The literature is currently aiming to construct a consistent aggregate measure of poverty over time that takes into account individual income lifetime profiles. It is however, far from clear which aspects of the specific patterns of poverty spells should be included. Using longitudinal data for Spain, this paper shows that the effect of spell recurrence on poverty dynamics is relevant. Poverty exit and re-entry rates vary not only with personal or household characteristics but also with spell accumulation and the duration of current and past spells. In general, our main findings support that an aggregate intertemporal poverty index should incorporate full individual poverty lifetime trajectories accounting for both poverty and non-poverty spell durations.     

The rhetoric and the reality of rural deprivation

In the development of the rural deprivation debate in the U.K. in the early 1970s, the cause of rural deprivation was largely attributed to the imbalance in the allocation of state resources between urban and rural areas. In subsequent campaigns to redress that situation, much emphasis was placed on identifying specific ‘rural’ as opposed to ‘urban’ explanations for the problems facing rural populations. Evidence presented in this paper, however, illustrates the essentially aspatial nature of the deprivation experience. From a detailed household survey in a range of rural environments in England, deprivation was found to result as much from the socio-economic inequalities within rural society as it does from any perceived processes of territorial injustice in the allocation of Central Government financial support to local authorities. In the light of such findings, the paper questions the advisability of the state's adherence to spatial policies in the pursuit of solutions to the problems of the deprived in rural areas.