Population growth and poverty measurement

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? The economist’s instinct, framed by population replication axioms that undergird standard measures of poverty, is to say that in this case poverty has gone down. But this goes against the instinct of those who work directly with the poor, for whom the absolute numbers notion makes more sense as they cope with more poor on the streets or in the soup kitchens. This paper attempts to put these two conceptions of poverty into a common framework. Specifically, it presents an axiomatic development of a family of poverty measures without a population replication axiom. This family has an intuitive link to standard measures, but it also allows one or other of “the absolute numbers” or the “fraction in poverty” conception to be given greater weight by the choice of relevant parameters. We hope that this family will prove useful in empirical and policy work, where it is important to give both views of poverty—the economist’s and the practitioner’s—their due.     

Empirical issues in lifetime poverty measurement

Recently there has been increased interest in developing methods for measuring poverty in a way that takes into account the lifetime experience of individuals. We analyze some specific proposals that take the so-called spells approach and consider how they differ in the manner in which they address issues of lifetime poverty, most notably the measurement of chronic poverty. Comparing these specific measures by applying them to a US panel data set, we provide important insights for further research in conceptualizing and measuring lifetime poverty.     

Effects of federal programs on children: Absolute poverty, relative poverty, and income inequality

Since the 1996 welfare reform, federal spending on means-tested programs targeting the poorest children has decreased, while programs that benefit children in low-income working families have been expanded substantially. With this background, this study examined changes in the antipoverty and anti-inequality effects of children's programs between 1995 and 2007 using data from the Annual Social and Economic (ASEC) Supplements to the Current Population Survey (CPS). The findings suggest that although the poverty-reduction effects of the federal child programs increased between 1995 and 2007, the programs' effects on the reductions of children's absolute poverty gaps, relative poverty rates, relative poverty gaps, and income inequality all decreased. More importantly, the antipoverty effects of the federal child programs were most weakened for the poorest children (i.e., those in female-headed, immigrant, and nonworking families) between 1995 and 2007.     

The measurement of transient poverty: Theory and application to Pakistan

The present paper investigates the measurement of transient poverty when each person's welfare level fluctuates due to exogenous risk. The paper namely characterizes the sensitivity of transient/chronic poverty decomposition with respect to the poverty line and to the expected welfare level so that the decomposition analysis will be based on solid theoretical foundations and be robust empirically. Theoretical results show that poverty measures associated with prudent risk preferences perform better than other measures in assuring that the value of transient poverty increases with the depth of chronic poverty and that the decomposition is not highly sensitive to the poverty line. Poverty measures such as those associated with constant relative risk aversion are thus superior to popular Foster–Greer–Thorbecke (FGT) measures such as headcount, poverty gap, and squared poverty gap indices. These theoretical arguments are confirmed empirically by the application of the decomposition to a two-period household panel dataset from rural Pakistan. The relative magnitudes of transient versus chronic poverty are more robust to changes in the poverty line when poverty measures associated with constant relative risk aversion are used than when FGT poverty measures are used.     

Distributive effects of benefits and taxes

In light of the growing federal deficit, pressure is mounting to cut federal spending. If the budget for social security programs is cut, who will suffer? This article presents the results of a study that investigated the degree to which taxes and public income transfers change the level of income, the degree of inequality in income distribution, and the poverty rates of various demographic groups. Major findings are that public income transfers are more powerful than taxes in equalizing the income distribution and that poverty reduction through non-means-tested transfer programs is more effective among elderly people, white people, and people in married-couple families, whereas poverty reduction through means-tested transfer programs is more effective among nonelderly people, black people, and people in female-headed families. Implications for social work practice are discussed.     

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     

Targeting and child poverty

We examine the relative merits of targeting children within the household through price subsidies and cash transfers. To do so, we model the behavior of a household composed of one adult and one child. We then show that ‘favorable’ distortions from price subsidies may allow redistributing toward the child and then derive the conditions under which this redistributive scheme is more efficient than cash transfers. The framework is extended to account for possible paternalistic preferences of the social planner and for households composed of two adults with different preferences. Applied to a continuum of households, our approach is extended to the problem of child poverty alleviation. In contrast to the traditional view, we show that well-chosen subsidies may be more cost effective than cash transfers in reducing child poverty.     

Explaining heterogeneity in the child poverty rate among immigrant families: Differences by parental citizenship

Much of the debate about child poverty among immigrant families has centered on factors that place immigrant children at a high risk for poverty. What is missing in this debate and the literature is that children in immigrant families are economically heterogeneous and that children in naturalized families are doing as well as or better than children in native families in terms of economic status. To examine the heterogeneous economic status of children in immigrant families, this study compared children's poverty rates by parental nativity and citizenship status, decomposing demographic risk factors of child poverty. The results indicate that whereas lower parental education and employment status largely explain the relatively higher poverty rate among children in noncitizen families, higher parental education and employment rates and a lower rate of single parenthood explain why children in naturalized families have a lower rate of poverty than those in noncitizen families. Implications of these findings are discussed in detail.     

The burden of new taxes: acceptance of taxes as a function of affectedness and egoistic versus altruistic orientation

Taxes imply loss of individual freedom to dispose of one's own money as one wishes. From a psychological viewpoint it is reasonable to assume that people reject the introduction of new taxes if they are affected by them and have to contribute more to the tax authorities than in the past. It can also be assumed that personal value orientation such as selfishness and altruism, respectively, influence attitudes towards taxes. Moreover, personality traits, such as norm dependency, and age should affect one's acceptance of taxes.This study investigates the attitudes of 120 persons affected by a new tax and 113 persons not affected by the tax. Norm dependency, egoistic versus altruistic value orientation, tax mentality and tax morality as well as demographic characteristics were assessed by questionnaires. The results indicate that both affectedness and value orientation determined attitudes towards the new tax. Age and norm dependency are correlated with attitudes towards taxes in general. The hypothesized interaction effect between affectedness and value orientation was not confirmed. However, affected egoists, nonaffected egoists, affected altruists, and nonaffected altruists, respectively, mentioned different reasons for and against taxes, tax increases, and the introduction of new taxes.     

Intervention and representation of poverty

Any intervention against poverty is not so much an administrative process as a social relation between categories of actors that are partly defined by it. Being a social action, it implies a construction of meaning that will guide the behavior of the actors. This semantic network needs an interpretation. This article presents a simplified model (an "ideal-type") of this meaningful interaction. It will contrast the way the professional actors of the poverty field present poverty and poor people and the way poor people themselves present their situation and the difficulties they face. This comparison will show the great distance between these discourses.     

Child poverty and child outcomes

This article reviews the most up to date evidence on the prevalence of child poverty in Britain. It traces how child poverty has changed over the last 20 years, and how child poverty in Britain compares with that in other countries. Then there is a brief section describing the characteristics of poor children. It then reviews evidence of the impact of poverty on the well‐being of children drawing on the ESRC Children 5–16 programme project—Poverty: the Outcomes for Children (Bradshaw, 2001a). It concludes with a discussion of how the Labour Government is doing in its aspirations to abolish child poverty. Copyright © 2002 John Wiley & Sons, Ltd.     

Inheritance,poverty, and disability

Inheritance is a significant means of transferring wealth from one generation to the next, and therefore increasingly attracts attention from researchers and policy-makers working on intergenerational and multidimensional poverty. However, until now disabled persons have been overlooked in these discussions. This oversight is particularly unfortunate because, as a group, the estimated one billion people with disabilities (some 15% of the world’s population) are among the poorest and most marginalized of the global population. Over the past decade, a small but growing literature has examined the recursive connections between poverty and disability throughout the developing world. In this paper, we argue that disabled individuals are routinely denied inheritance rights in many low-income and middle-income countries, and that this is a significant and largely unrecognized contributor to their indigence. The denial of inheritance is both a social justice issue and a practice that can no longer be overlooked if disabled persons are to be brought into the development mainstream.     

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.      

Social policy options and fuel poverty

The concept of ‘fuel poverty’, the inability to afford adequate warmth at home has become a focus for social policies in recent years. Increasing numbers of households dependent on social security and the likelihood that fuel will become more expensive mean that the existing problem of fuel poverty may become even greater. The data on fuel expenditure and related variables from three national surveys are used to evaluate various policy options for relieving fuel poverty. Three policies for increasing incomes to pay for fuel costs are considered, increasing benefits, introducing a fuel allowance or extending the existing scheme of additional heating requirements. The policies for reducing fuel expenditure are also considered, restructuring tariffs, changing payment methods and conservation measures. The case is made for priority to be given to an advice and information campaign and a conservation programme aimed at poor households who are unable to respond to existing price signals and grants.