Report Card 10 - Measuring Child Poverty


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This is the latest instalment of the UNICEF Office of Research Report Card series, aimed at focusing on the well-being of children in industrialized countries. It considers two views of child poverty in member countries of the Organization for Economic Cooperation and Development (OECD): a measure of absolute deprivation, and a measure of relative poverty.

The two measures, though separate in concept, highlight significant disparities in the living conditions of children. Of the countries surveyed, around 15% of children are considered “deprived” and a similar proportion live below their national poverty line.

This report card argues that accurate and timely monitoring of child poverty and deprivation is crucial for gauging what is happening to vulnerable children now. It argues that even during times of economic hardship, with the right evidence-based policies, it is possible to protect vulnerable children.

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Report Card 10 - Measuring Child Poverty

  1. 1. UNICEFInnocenti Research CentreReport Card 10Measuringchild povertyNew league tables of child povertyin the world’s rich countries
  2. 2. Innocenti Report Card 10 was written by Peter Adamson.Two background papers from the UNICEF Innocenti Research Centresupport this Report:1. Bradshaw, J., Y. Chzhen, C. de Neubourg, G. Main, B. Martorano and L. Menchini (2012), ‘Relative Income Poverty among Children in Rich Countries’, Innocenti Working Paper 2012-01, UNICEF Innocenti Research Centre, Florence. de Neubourg, C., J. Bradshaw, Y. Chzhen, G. Main, B. Martorano and L. Menchini (2012), ‘Child Deprivation, Multidimensional Poverty and Monetary Poverty in Europe’, Innocenti Working Paper 2012-02, UNICEF Innocenti Research Centre, Florence. UNICEF Innocenti Research Centre would like to acknowledge thegenerous support for Report Card 10 provided by the Andorran,Belgian, Swiss and United Kingdom National Committees for UNICEF. Which countries are included?Any part of this Innocenti Report Card may be freely reproduced usingthe following reference:UNICEF Innocenti Research Centre (2012), ‘Measuring Child Poverty:New league tables of child poverty in the world’s rich countries’,Innocenti Report Card 10, UNICEF Innocenti Research Centre, Florence. Data on child deprivation rates are drawn from the 2009 round of the European Union Statistics on Income and Living ConditionsThe Report Card series is designed to monitor and compare the and are therefore available for 29performance of economically advanced countries in securing the rights countries, i.e. all 27 countries ofof their children. the European Union plus NorwayThe Innocenti Research Centre (IRC) was established in Florence, Italy and Iceland. Most of these (23in 1988 to strengthen the research capability of the United Nations out of 29) are also members ofChildren’s Fund (UNICEF) and to support its advocacy for children the Organisation for Economicworldwide. IRC is the dedicated research hub of the UNICEF Office of Co-operation and DevelopmentResearch (OOR), which provides global leadership for the organization’s (OECD). The exceptions arestrategic research agenda around children. The Office aims to set out a Bulgaria, Cyprus, Latvia,comprehensive framework for research and knowledge within the Lithuania, Malta and Romania,organization, in support of its global programmes and policies. Through which are EU member states,strengthening research partnerships with leading academic institutions but not members of the OECD.and development networks in both the North and South, the Office Data on relative child povertyseeks to leverage additional resources and influence in support of rates are also available for sixefforts towards policy reform in favour of children. additional OECD countriesThe Centres publications are contributions to a global debate on child (Australia, Canada, Japan,rights and help facilitate full implementation of the Convention on the New Zealand, Switzerland, andRights of the Child in low-, middle- and high-income countries. The the United States). The analysisviews expressed are those of the authors and researchers and do not of relative child poverty thereforenecessarily reflect the policies or views of UNICEF . includes the following 35 countries: Australia, Austria, Belgium,© United Nations Children’s Fund (UNICEF), May 2012 Bulgaria, Canada, Cyprus, Czech Republic, Denmark,ISBN: 978-88-8912-965-4 Estonia, Finland, France,ISSN: 1605-7317 Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan,UNICEF Innocenti Research Centre Latvia, Lithuania, Luxembourg,Piazza SS. Annunziata, 12 Malta, the Netherlands,50122 Florence, Italy New Zealand, Norway, Poland, Portugal, Romania, Slovakia,Tel: (+39) 055 2033 0 Slovenia, Spain, Sweden,Fax: (+39) 055 2033 220 Switzerland, United Kingdom, United
  3. 3. I n n o c e n t i R e p o r t C a r d 1 0 1UNICEFInnocenti Research CentreThis report sets out the latest internationally comparable data onchild deprivation and relative child poverty. Taken together, thesetwo different measures offer the best currently available pictureof child poverty across the world’s wealthiest nations.Previous reports in this series have shown that failure toprotect children from poverty is one of the most costly mistakesa society can make. The heaviest cost of all is borne by thechildren themselves. But their nations must also pay a verysignificant price – in reduced skills and productivity, in lowerlevels of health and educational achievement, in increasedlikelihood of unemployment and welfare dependence, in thehigher costs of judicial and social protection systems, and inthe loss of social cohesion.The economic argument, in anything but the shortest term, istherefore heavily on the side of protecting children from poverty.Even more important is the argument in principle. Becausechildren have only one opportunity to develop normally in mindand body, the commitment to protection from poverty must beupheld in good times and in bad. A society that fails to maintainthat commitment, even in difficult economic times, is a societythat is failing its most vulnerable citizens and storing upintractable social and economic problems for the yearsimmediately ahead.It is for these reasons that this comparative snapshot of childpoverty in the industrialized nations is presented for theattention of political leaders, press and public.
  4. 4. 2 I n n o c e n t i R e p o r t C a r d 1 0T W O VI E WS OF CHILD POV ER TYNew league tables of child povertyin the world’s rich countriesFig. 1a A league table of child 0.9 Icelanddeprivation, 29 economicallyadvanced countries 1.3 Sweden 1.9 NorwayFigure 1a shows the percentage of children(aged 1 to 16) who lack two or more 2.5 Finlandof the following 14 items because the 2.6 Denmarkhouseholds in which they live cannotafford to provide them. 2.7 Netherlands 4.4 Luxembourg1. Three meals a day2. At least one meal a day with meat, 4.9 Ireland chicken or fish (or a vegetarian 5.5 United Kingdom equivalent) 7.0 Cyprus3. Fresh fruit and vegetables every day 8.1 Spain4. Books suitable for the child’s age and knowledge level (not including 8.3 Slovenia schoolbooks) 8.7 Austria5. Outdoor leisure equipment (bicycle, 8.8 Czech Republic roller-skates, etc.) 8.8 Germany6. Regular leisure activities (swimming, playing an instrument, participating in 8.9 Malta youth organizations etc.) 9.1 Belgium7. Indoor games (at least one per child, 10.1 France including educational baby toys, building blocks, board games, 12.4 Estonia computer games etc.) 13.3 Italy8. Money to participate in school trips 17.2 Greece and events 19.2 Slovakia9. A quiet place with enough room and light to do homework 19.8 Lithuania10. An Internet connection 20.9 Poland11. Some new clothes (i.e. not all 27.4 Portugal second-hand) 31.8 Latvia12. Two pairs of properly fitting shoes (including at least one pair of 31.9 Hungary all-weather shoes) 56.6 Bulgaria13. The opportunity, from time to time, to 72.6 Romania invite friends home to play and eat14. The opportunity to celebrate special 0 10 20 30 occasions such as birthdays, name days, religious events, etc. Child deprivation (% of children lacking two or more items) Note: Data refer to children aged 1 to 16. Source: Calculations based on EU-SILC 2009. The data are drawn from the 2009 round of the European Union Statistics on Income and Living Conditions (EU-SILC) and are not available for non-European countries of the Organisation for Economic Co-operation and Development (OECD).
  5. 5. I n n o c e n t i R e p o r t C a r d 1 0 3Introduction children in each country who are Figure 1b shows the percentage of deprived – i.e. ‘lacking two or more’ children living in relative poverty,The league tables on these pages of 14 items considered normal and defined as living in a household whosepresent the latest available data on child necessary for a child in an income, when adjusted for family sizepoverty across the world’s rich nations. economically advanced country and composition, is less than 50% ofFigure 1a, made available here for the (see opposite for the full list). the median income for the country infirst time, shows the proportion of which they live.Fig. 1b A league table of relative child 4.7 Icelandpoverty, 35 economically advanced 5.3 Finlandcountries 6.1 CyprusFigure 1b shows the percentage of children 6.1 Netherlands(aged 0 to 17) who are living in relative 6.1 Norwaypoverty, defined as living in a household in 6.3 Sloveniawhich disposable income, when adjusted 6.5 Denmarkfor family size and composition, is less 7.3 Swedenthan 50% of the national median income. 7.3 Austria 7.4 Czech Republic 8.1 Switzerland 8.4 Ireland 8.5 Germany 8.8 France 8.9 Malta 10.2 Belgium 10.3 Hungary 10.9 Australia 11.2 Slovakia 11.7 New Zealand 11.9 Estonia 12.1 United Kingdom 12.3 Luxembourg 13.3 Canada 14.5 Poland 14.7 Portugal 14.9 Japan 15.4 Lithuania 15.9 Italy 16.0 Greece 17.1 Spain 17.8 Bulgaria 18.8 Latvia 23.1 USA 25.5 Romania 0 10 20 30 40 Child poverty rate (% of children living in households with equivalent income lower than 50% of national median) Note: Data refer to children aged 0 to 17. Sources: Calculations based on EU-SILC 2009, HILDA 2009, SLID 2009, SHP 2009, PSID 2007. Results for New Zealand are from Perry (2011). Results for Japan are from Cabinet Office, Gender Equality Bureau (2011). Some OECD countries – Australia, Canada, Japan, New Zealand, Switzerland and the United States – are included in the league table of relative child poverty (Figure 1b) but could not be included in the league table of child deprivation (Figure 1a) because relevant data are not available. Child deprivation data are drawn from the European Union Statistics on Income and Living Conditions and are therefore only available for the 27 EU countries plus Iceland and Norway.
  6. 6. 4 I n n o c e n t i R e p o r t C a r d 1 0As may be seen at a glance, the two the child poverty rate is one of the greater likelihood of teenageleague tables project two very different most important of all indicators of a pregnancy to the increased probabilitypictures of child poverty in the world’s society’s health and well-being. For the of drug and alcohol abuse. That thererich nations. What these different here and now, it is a measure of what are many exceptions – many childrenpictures mean – the relationship is happening to some of society’s most who grow up in economically poorbetween them and the controversies vulnerable members. For the years to families who do not fall into any ofsurrounding them – is the subject of come, it is a pointer to the well-being these categories – does not alter thethis Report Card. and cohesion of society as a whole. fact that poverty in childhood is closely and consistently associated with Previous reports in this series have measurable disadvantage both forSlipping down the agenda presented the evidence for the close individuals and for the societies inIn the wake of statistics following the association between child poverty which they live.ipost-2008 economic crises, the child and a long list of individual and socialpoverty rate has rarely surfaced. risks – from impaired cognitive A commitment to protecting children“In a downturn,” says Sharon Goldfeld, development to increased behavioural from poverty is therefore more thanNational Director of the Australian difficulties, from poorer physical health a slogan or a routine inclusion in aEarly Development Index, “the first to underachievement in school, from political manifesto; it is the hallmarkthing that happens is that children drop off lowered skills and aspirations to higher of a civilized society.the policy agenda.” Yet it is arguable that risks of welfare dependency, from the Box 1 Children and recession There are almost no internationally comparable data on The possible impact of the economic downturn on what is happening to child poverty as a result of the efforts to reduce child poverty rates has also recently economic downturn of the last three years. been estimated for the United Kingdom, where the Child Poverty Act of 2010 has set legally binding targets It is nonetheless evident that front-line services for for reducing child poverty. By 2020, the relative child families are everywhere under strain as austerity poverty rate is to be halved to no more than 10%. measures increase the numbers in need while depleting (‘Absolute income poverty‘ – defined as living on the services available. It is also clear that the worst is an income below 60% of the median income for yet to come. Many families, even those on low incomes, the benchmark year 2010 and updated only for inflation have some form of ‘cushion’ – whether in the form of – is to be cut from 20% to 5%.) savings, assets, or help from other family members – by which to maintain spending during difficult times. There But as the Act came into force, the economic crisis is therefore almost always a time lag between the onset was already beginning to threaten social protection of an economic crisis and the full extent of its impact. programmes. Child benefits, for example, have been frozen for three years – meaning that in real terms they will fall in value. Child tax credits and other Commitment programmes designed to protect the poorest children In Ireland, a leader in both the theory and practice of have been cut back. monitoring child poverty, some data are available to estimate the effects on children and families of a What difference are such changes likely to make severe contraction in the national economy. Between to the UK’s long-term efforts to bring down child 2009 and 2010, for example, Ireland’s own child poverty rates? deprivation index showed a rise of almost 7 percentage Reversal points, from 23.5% to 30.2%.1 Over the same period, falling median incomes meant that relative child poverty According to an October 2011 report from the Institute rose by less than one percentage point – again showing for Fiscal Studies (IFS),2 the likeliest prospect is that the the value of using the two different measures progress of recent years will be thrown into reverse. discussed in this report. Although currently thought to be stable, the child poverty rate is predicted to begin rising again in 2013.
  7. 7. I n n o c e n t i R e p o r t C a r d 1 0 5A crisis of monitoring reveal a crisis of monitoring. In both “The discourse on poverty is very confusing,” cases the data they present, although says Jonathan Bradshaw, Professor ofIn practice, making good on this the latest available, are mostly drawn Social Policy at the University of Yorkcommitment is impossible without from surveys conducted in 2009. They and one of the authors of the statisticalclose monitoring of what is happening are therefore at least two to three years analysis on which this report draws:iito children’s lives. It is monitoring that old.* This would be bad enough at the “We tend to mix up concepts and measuresmakes possible evidence-based policy, best of times. But these are not the best and use different words to describe the samepolitical accountability, informed thing and the same words to describeadvocacy and the cost-effective use of of times. And it is a significant failing, different things.” iiilimited public resources. The on behalf of many governments ofavailability of timely data is therefore OECD countries, that the available data Many of the questions and confusionsin itself an indicator of whether the on children’s lives do not yet reflect the about the measurement of childcommitment to protecting children is impact of the economic downturn poverty are encompassed by the twobeing taken seriously or not. (see Box 1: Children and recession). league tables with which this report begins. It may therefore be helpful toThe two league tables, Figures 1a and Underlying weak monitoring is the summarize the principal differences1b, therefore reveal more than the lack of any robust public or political between them.percentages of children living in consensus on how child povertydifferent kinds of poverty. They also should be defined and measured.Looking further ahead, levels of ‘relative’ and ‘absolute’child poverty are expected to reach 24% and 23% Relative child poverty rate,respectively by 2020/21 – compared to the target figures United Kingdom, 1998–2020of 10% and 5%. This would mean a return to the relative 28child poverty levels of two decades ago. 26Such forecasts, says the IFS, are “always highly 24uncertain.” In particular, they cannot accurately predict Predictedthe impact of, and responses to, the tax and benefit 22changes currently in the pipeline. They are nonetheless 20the best available independent estimate of “what mighthappen to poverty under current government policies.” 18Since these forecasts were made, the commitment to 16increase child credits by more than the rate of inflation in 142012 and 2013 has been abandoned. According to IFS Targetcalculations, this decision alone is likely to mean that 12another 100,000 children will fall below the relative 10 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020poverty line. Source: Data from the Institute for Fiscal Studies, London, October 2011. The graph shows the percentage of children living in households below 60% of equivalized median income before housing costs. For illustrative purposes, the Target line assumes linear progress towards the 2020 goal.1 Central Statistics Office Ireland, Government of Ireland, 2011.2 Brewer, M., J. Browne and R. Joyce (2011). Child and Working-age Poverty from 2010 to 2020, Institute for Fiscal Studies, London.* EU-SILC 2009: data on income refers to 2008, other data to 2009. Poverty data was released in early 2010.
  8. 8. 6 I n n o c e n t i R e p o r t C a r d 1 0A deprivation index 5. Outdoor leisure equipment Overall, the league table shows that (bicycle, roller-skates, etc.) approximately 85% of the almostFigure 1a, a League Table of ChildDeprivation, represents a significant 6. Regular leisure activities 85 million children (aged 1 to 16) innew development in the international (swimming, playing an 29 European countries have at least 13monitoring of child poverty. For the instrument, participating in youth of the 14 items in the deprivationfirst time, the European Union Statistics organizations etc.) index and are therefore ‘not deprived’.on Income and Living Conditions, 7. Indoor games (at least one per The second most obvious feature ofsampling more than 125,000 child, including educational baby the table is that the highest rates ofhouseholds in 29 European countries, toys, building blocks, board deprivation are to be found in somehas included a section on the lives of games, computer games etc.) of the newest and poorest memberchildren aged 1 to 16. Using this data, countries of the European Union.the UNICEF Innocenti Research 8. Money to participate in school Over 30% are seen to be deprived inCentre has constructed the 14-item trips and events Hungary and Latvia, over 50% inChild Deprivation Index on which 9. A quiet place with enough room Bulgaria and over 70% in Romania.League Table 1a is based. and light to do homework For Central and Eastern European 10. An Internet connection countries, therefore, the league table ofThe 14 items in the index child deprivation makes grim reading.encompass the ability of 11. Some new clothes (i.e. not allhouseholds to afford: second-hand) Among the richest 15 countries, all1. Three meals a day except France and Italy have child 12. Two pairs of properly fitting deprivation rates below 10%. But2. At least one meal a day with shoes (including at least one pair clearing a bar that is set so low does meat, chicken or fish (or a of all-weather shoes) not warrant any great applause. In vegetarian equivalent) 13. The opportunity, from time to the world’s wealthiest nations the3. Fresh fruit and vegetables time, to invite friends home to proportion of children lacking two every day play and eat or more of these basic items should4. Books suitable for the child’s 14. The opportunity to celebrate be at or close to zero. Yet in practice age and knowledge level special occasions such as birthdays, only Denmark, Finland, Iceland, the (not including schoolbooks) name days, religious events etc. Netherlands, Norway and Sweden haveFig. 2a Percentage of children deprived in countries with Fig. 2b Percentage of children deprived in countries withGDP per capita between $13,000 – $25,000 (PPP) GDP per capita between $25,000 – $36,000 (PPP) 80 30 72.6 27.4 70 25 60 56.6 20 50 % Children deprived% Children deprived 17.2 40 15 13.3 31.8 31.9 30 10.1 10 8.8 8.3 8.1 19.8 20.9 20 19.2 7.0 5.5 12.4 5 10 8.9 2.5 0 0 Portugal ($25,058) Czech Republic ($25,572) Slovenia ($27,556) Greece ($29,303) Cyprus ($30,728) Spain ($32,262) Italy ($32,413) France ($33,349) United Kingdom ($35,145) Finland ($35,254) Bulgaria ($13,764) Romania ($14,216) Latvia ($16,166) Lithuania ($17,059) Poland ($18,925) Estonia ($19,690) Hungary ($20,275) Slovakia ($22,875) Malta ($24,804) (per capita GDP in parentheses) (per capita GDP in parentheses)
  9. 9. I n n o c e n t i R e p o r t C a r d 1 0 7child deprivation rates below 3%. For Relative poverty league behind). All of these countries haveAustria, Belgium and Germany, the rate relative child poverty rates below 7%. The second of the two league tablesclimbs to 8% or more. In France and Another eight countries including two (Figure 1b) paints a very differentItaly the rate rises above the 10% mark. of the largest – Germany and France – picture of child poverty in the world’s advanced economies. have rates between 7% and 10%. A thirdMore with less group, including Australia, Canada, It includes six OECD countries that New Zealand and the United Kingdom,Looked at as a whole, the child do not participate in EU-SILC post rates of between 10% and 15%.deprivation table may therefore seem (Australia, Canada, Japan, A further six, including populous Italyto present little more than a blurred New Zealand, Switzerland and the and Spain, show rates of between 15%reflection of each country’s level of per United States), and is based on the and 20%. In only two countries arecapita income. But a closer look reveals definition of relative poverty used by more than 20% of children living inthat some countries are in fact the OECD. Under this definition, a relative poverty – Romania and theachieving much more – and some child is deemed to be living in relative United States.much less – than their income levels poverty if he or she is growing up in awould predict. Estonia, Hungary and household where disposable income, Overall, the divide between thePoland, for example, have roughly when adjusted for family size and wealthy and not-so-wealthy nations isequivalent per capita incomes but composition, is less than 50% of the much less clear-cut. Hungary, Slovakiawidely varying rates of child median disposable household income and Estonia, for example, are seen todeprivation (see Figure 2a). Portugal for the country concerned.* By this have a smaller proportion of childrenand the Czech Republic both have per standard, more than 15% of the 200 living in relative poverty than thecapita incomes of about PPP $25,000, million children in the 35 countries United Kingdom, Italy, Spain, or thebut Portugal’s child deprivation level is listed in Figure 1b are seen to be living United States. Clearly, this is notthree times higher (see Figure 2b). in relative poverty. because a smaller proportion of theirBelgium and Germany have similar children are poor in an absolute sense;per capita incomes to Denmark and The top five positions in the league it is because the incomes of most poorSweden – but child deprivation rates table are occupied by Iceland, Finland, households in these former centrally-that are about three and seven times Cyprus, the Netherlands and Norway planned economies do not fall as farhigher (see Figure 2c). (with Slovenia and Denmark close behind the median level of income for the nation as a whole. Finally, it is worth noting that – despite the very different measures of child poverty employed in these two league tables – sevenFig. 2c Percentage of children deprived in countries with countries are ranked in the top 10 in bothGDP per capita between $36,000 – $85,000 (PPP) – Cyprus, Denmark, Finland, Iceland, 10 the Netherlands, Norway and Sweden. 9.1 9 8.8 8.7 Controversy 8 What are we to make of these two very different pictures of child poverty 7 in the world’s richest nations?% Children deprived 6 First, it is important to resist the 4.9 temptation to see the two different 5 4.4 views presented in Figures 1a and 1b 4 as contradictory or mutually exclusive. Both are valid. Both can inform policy. 3 2.6 2.7 And both make it clear that some countries are doing a much better job 1.9 2 than others at protecting their children 1.3 0.9 from poverty. 1 0 Note: Data refer to children aged 1 to 16. Belgium ($36,279) Germany ($36,320) Iceland ($36,733) Sweden ($37,157) Denmark ($37,672) Austria ($38,804) Ireland ($39,643) Netherlands ($40,796) Norway ($55,717) Luxembourg ($84,766) Sources: Calculations based on EU-SILC 2009 for child deprivation and * Most European Union countries draw the relative on World Development poverty line at 60% of national median income. For Indicators (2011) for GDP purposes of international comparison, the OECD (and per capita, PPP (current this Report Card series) uses a relative poverty line (per capita GDP in parentheses) international $). drawn at 50% of median income.
  10. 10. 8 I n n o c e n t i R e p o r t C a r d 1 0The two measures are, however, ‘Real’ poverty This is a mistake. Both are relativeprofoundly different in concept. It is often argued that relative poverty measures.The most important difference between isn’t ‘real poverty’. Real poverty, it is The deprivation index is based on thethem is that the child deprivation table said, means lacking basics - enough kind of possessions, services anduses a fixed measure for all 29 countries food to eat, adequate clothing, a dry opportunities that most people wouldsurveyed; the criterion applied (lacking home, an indoor toilet, hot water, and consider normal for a child growingtwo or more from the same list of 14 a bed to sleep in. Once you leave such up in a wealthy country today. Initems) is exactly the same for Sweden basics behind and start drawing other words, it is relative to both timeor the United States as it is for Bulgaria poverty lines based on statistical and place. Twenty years ago, foror Romania. Inevitably, therefore, it notions like median income, it is example, such a list would not haveputs the emphasis on the differences argued, you end up with results that included an Internet connection. Gobetween richer and poorer countries. fail to make intuitive sense and so back a little further in time andThe criterion used to measure relative fail to convince either politicians or ‘having at least one meal a day withchild poverty, by contrast, changes with public. Can the child poverty rate meat, chicken or fish’ would not havethe median income of each country; it really be said to be rising, for example, been regarded as normal. In fact thetherefore transfers the emphasis to the at a time when the incomes of the longer the historical view the more poor are also rising? And can there obvious it becomes that poverty is angap between the bottom and the really be more children in poverty essentially relative concept. Anymiddle in the living standards of in the United Kingdom or the poverty line intended to represent achildren within each country. United States than in Hungary or minimum acceptable standard of livingIt is because of this difference that the Lithuania (as shown in Figure 1b)? in the industrialized world todaypoorer countries in Figure 1a tend to Or are these findings just statistical implies higher standards of food,have significantly higher rates of child artefacts produced by a definition of clothing, housing, water supply,deprivation but may or may not have child poverty that is in effect based sanitation, health care, education,higher rates of relative income poverty. on a concern not with poverty but transport and entertainment than wereFor the same reason, the two different with inequality? available to even the wealthiestmeasures tend to respond to economic households of previous eras. Such are the arguments that pushand policy changes in very different many to reject the relative income The whole idea of defining childways.iv In periods of sustained measure and to embrace instead the poverty in an absolute sense thereforeeconomic growth, for example, the direct measurement of deprivation. rests on shaky ground. Unless we wishproportion of a nation’s children Does the child have three meals a day? to argue that the threshold should bedefined as ‘deprived’ will almost A few books in the home? And a roof set at the minimum income necessarycertainly fall as overall incomes rise. that doesn’t leak? Isn’t this a much for sheer physical survival then thereThe proportion living in relative income more intuitive measure, and one that can in fact be no such thing as anpoverty, on the other hand, may either is more capable of winning public absolute poverty line.rise or fall depending upon whether understanding and support?their household incomes grow by more The real debate, therefore, is notor less than the median income for the Direct measures of outcomes like whether poverty lines should benation concerned. To take a famous deprivation do have advantages over absolute or relative, but how and howexample, a decade of sustained indirect or ‘input’ measures such as often they should be updated to reflect household income (see Box 2: The changes in the living standards ofeconomic growth in the Ireland of the problem with incomes). But the trouble society as a whole. If the decision is1990s more than doubled the nation’s with the argument that deprivation taken, for example, to draw anmedian income, but the proportion of measures ‘real poverty’, whereas relative ‘absolute’ poverty line at some fixedchildren living in relative poverty also income does not, is that the intuitively point and to update it only forrose because the incomes of households appealing idea on which it rests is that inflation, then this means that a relativebelow the poverty line rose more poverty should be measured in an poverty line is being anchored to anslowly than the median income for the absolute rather than a relative sense. arbitrary point in time. As the yearscountry as a whole. And from here it is but a short step to pass and incomes rise, such a povertySuch examples bring us to the heart the belief that the deprivation index line is likely to fall further and furtherof one of the principal controversies presented in Figure 1a is an absolute behind the norm for the society andsurrounding the measurement of measure whereas the median income to become less and less useful. This ischild poverty. method used for Figure 1b is ‘only’ a essentially what has happened over the relative measure.
  11. 11. I n n o c e n t i R e p o r t C a r d 1 0 9 Box 2 The problem with incomes Relative child poverty rates are usually estimated by σσ Income measures cannot reflect the fluctuations in assuming that household income is a reasonable guide income experienced by many households (for example to the material resources available to the child. But this as a result of overtime, bonuses, working shorter assumption is beset by problems.1 hours, becoming unemployed, or taking retirement). σσ Calculating a poverty rate from household income Among the concerns: data requires that some method be used to convert σσ Data on incomes may not be reliable, especially if household income into equivalent individual incomes derived from surveys, or if a significant proportion of (see Box 3: Do children have incomes?). To achieve the working population is self-employed or employed this, an ‘equivalence scale’ must be used. But such in informal work. Under-reporting of earnings varies scales are not based on any scientific understanding from country to country, and tends to be greater of the different patterns of need in households of towards the bottom end of the income scale. different size. σσ Most countries measure household incomes before σσ Household income measures cannot reflect the fact housing costs. In practice, a family’s capacity to that some families may be much more competent meet children’s needs is more likely to be dependent than others in managing income or in prioritizing on income after housing costs (which can vary spending (for example by putting children’s needs significantly within as well as between countries). first). The child of a high-income household, for σσ Income does not always reflect the real level of example, will not be counted as poor even if most of resources available. A family’s economic capacity, its the income is spent on drugs, gambling or alcohol; security and spending power, are based not only on conversely a child in a low-income household will be household income at a single point in time but also counted as poor even if the parents make enormous on savings and debts, on home ownership and house sacrifices to ensure that the child has the same values, on previous earnings and future expectations, advantages and opportunities as his or her peers. on the help that may be available from other family Some or all of these problems combine to introduce members, and perhaps on the value of home- doubts about household incomes as a measure of the produced goods such as food and clothes. real resources available to the child. And they help to σσ When used to compare child poverty in different explain why surveys have sometimes found that countries, income measures cannot take into account measures of household spending do not correspond to the fact that services such as health care and child measures of household incomes. At any given level of care may be subsidised or free in some countries but household income, for example, material living not in others. This may make a substantial difference standards tend to vary substantially according to to real ‘disposable household income’. whether they are assessed by incomes or by expenditures.2 In most advanced economies, household σσ Similarly, whether or not education, and particularly incomes are easier to monitor than expenditures. But pre-school education, is free or subsidised may make expenditure measures would in most cases provide a a substantial difference to disposable incomes. In more reliable guide to the real level of resources most advanced economies, primary and secondary available to the household. education is usually available free of charge. But early childhood education is subsidised to different degrees in different countries. The same is true of tertiary or college education, which may mean that parents in some countries must try to put aside 1 ee for example, Fusco, A., A-C. Guio and E. Marlier (2010). S significant sums even when their children are still ’Income Poverty and Deprivation in European Countries’, Eurostat Methodologies and Working Papers, European Commission, Luxembourg. young. Both of these factors affect real disposable 2 radshaw, J. and N. Finch (2003). ‘Overlaps in Dimensions of Poverty’. B incomes to different degrees in different countries. Journal of Social Policy, 32 (4): 513-525.