ESCAPING POVERTY THROUGH WORK: THE PROBLEM OF LOW EARNINGS CAPACITY IN THE UNITED STATES, 1973–88

This paper documents the changes in earnings capacity poverty that occurred between 1973 and 1088. Families are "Earnings Capacity Poor" if they are unable to generate enough income to lift them out of poverty, even if all working-age adults in the family work full-time, year-round. Data from the March 1974 and March 1989 Current Population Surveys indicate that earnings capacity poverty increased more rapidly than official poverty. Much of this increase can be attributed to the rise in earnings capacity poverty among whites, intact families, and family heads with more than a high school diploma. Most alarming, the percentage of children in earnings capacity poor families is considerably higher than it is among persons over eighteen; in 1988, nearly 15 percent of children under six lived in families that could not have escaped poverty even if the adults in their family were working and earning at their full capacity levels.     

Welfare and the family size decision of low-income,two-parent families

This study determines the increase in family size given an increase in the per child welfare benefit for a family with children in the US. The family size decision was modeled as a discrete choice decision. Data were obtained from the 1980-91 March Current Population Surveys of the US Census Bureau on 13,516 low-income, nonmilitary, non-farm, two-parent families with at least one dependent child. Low income was any amount under twice the official poverty level. Parents were limited to ages 18-40 years. Alaska and Hawaii were excluded. The data sets for 1979-90 were pooled. The sample included 10% Blacks and 27% receiving some amount of welfare. Average ages were 28.9 years for mothers and 30.8 years for fathers. The average number of children was 2.43. Findings from the ordered probit model indicate that education had a negative impact on family size, and age and race had positive impacts. Wages did not have a significant effect. The state unemployment rate and the average state income had negative effects. Unearned income had a small but significant effect on family size. The marginal welfare benefit had a positive impact. Findings reinforce the wealth hypothesis, that wealthier societies have smaller family sizes. Family size declines with increases in wages and education, which reflect increases in opportunity costs for time. Family size increases with age, as rearing children is labor-intensive. Family size increases with unearned income and welfare benefits that make childbearing affordable. It is argued that poor people in developed societies behave more consistently like poor people in developing countries. A 100% increase in the per child welfare benefit resulted in a 2% increase in the number of children. The policy implication is that a considerable increase in welfare benefits will have only trivial behavioral impacts for the poor on family size decisions.     

QUANTIFYING ABSOLUTE POVERTY IN THE DEVELOPING WORLD

We estimate that in 1985 about one in five persons in the developing world lived in poverty, judged by the standards of the poorest countries. This rises to one in three at a common, more generous, poverty line. The aggregate consumption short-fall of the poorest fifth is about one half of one percent of world consumption, while that of the poorest third is a further one percent. The shape of the distribution of consumption suggests that aggregate poverty would fall fairly rapidly if moderate growth in average consumption levels can be sustained, and the poor share at least proportionally in that growth. However, it would take only small adverse shifts in the world distribution of consumption to eliminate the gains to the poor from growth.     

Sen measures of poverty in the United States: Cash versus comprehensive incomes in the 1990s

Recently developed statistical inference procedures for the Sen index and its components – the headcount, income gap and Gini index among the poor – are used to test explicit hypotheses concerning aggregate poverty in the United States for the period 1989 to 1997. Changes in Sen measures of poverty are investigated for cash and comprehensive income using the official poverty line and six additional poverty lines drawn using thresholds set at 50, 75, 125, 150, 175 and 200 percent of the official level. The paper also reports on the effects of using comprehensive income on subgroup poverty rates and on the demographic composition of the poor.     

Missing poor and income mobility

Higher mortality among the poor prevents standard poverty measures from quantifying the actual extent of old-age poverty. Whereas existing attempts to deal with the ”missing poor” problem assume the absence of income mobility and assign to the prematurely dead a fictitious income equal to the last income enjoyed, this paper relaxes that assumption in order to study the impact of income mobility on the size of the missing poor bias. We use data on poverty above age 60 in 12 countries from the EU-SILC database, and we compare standard poverty rates with the hypothetical poverty rates that would have prevailed if (i) all individuals, whatever their income, had enjoyed the same survival conditions, and if (ii) all individuals within the same income class had been subject to the same income mobility process. Taking income mobility into account has unequal effects on corrected poverty measures across countries, and, hence, affects international comparisons in terms of old-age poverty.     

Assessing the Impact of FCC Lifeline and Link-Up Programs on Telephone Penetration

Lifeline programs sponsored by the Federal Communications Commission (FCC) in cooperation with the states and Local Exchange Companies (LECs) are authorized to increase telephone penetration. Estimates of a variant of Perl's (1983) economic model with 1990 Census Data broken to the state level indicate that expenditures on these programs have a positive statistical effect on telephone penetration in most models. However, program elasticities are extremely small, suggesting that very large expenditure increases per poor household would have little effect on telephone penetration. Importantly, there is no relationship between the size of the state program elasticity and the level of state income or the magnitude of state poverty. We also demonstrate that the 1990 Census Data is superior to the Current Population Survey as a data base.     

Assessing the Possible Antipoverty Effects of Recent Rises in Age‐Specific Minimum Wages in New Zealand

Real minimum wages increased by nearly 33 percent for adults and 123 percent for teenagers in New Zealand between 1999 and 2008. Where fewer than 2 percent of workers were being paid a minimum wage at the outset of this sample period, more than 8 percent of adult workers and 60 percent of teenage workers were receiving hourly earnings close to the minimum wage by the end of this period. These policy changes provide a unique opportunity to estimate the effects of the minimum wage on poverty. Although minimum wage workers are more likely to live in the poorest households, they are relatively widely dispersed throughout the income distribution. This is particularly true of teenage minimum wage workers. Furthermore, low‐income households often do not contain any working members. We estimate that a 10 percent increase in minimum wages, even without a loss in employment or hours of work, would lower the relative poverty rate by less than one‐tenth of a percentage point.     

A NEW LOOK AT THE WEALTH ADEQUACY OF OLDER U.S. HOUSEHOLDS

We examine the current wealth adequacy of older U.S. households using the 1998–2006 waves of the Health and Retirement Study (HRS). We find that the median older U.S. household is reasonably well situated, with a ratio of comprehensive net wealth to present value poverty‐line wealth of about 3.9 in 2006. About 18 percent of households, however, have less wealth than would be needed to generate 150 percent of poverty‐line income over their expected future lifetimes. We see similar patterns of wealth adequacy when we examine ratios of annualized comprehensive wealth to pre‐retirement earnings. Comparing the leading edge of the baby boomers in 2006 to households of the same age in 1998, we find that the baby boomers show slightly less wealth, in real terms, than their elders did, but still appear to have adequate resources at the median. Moreover, we find a rising age profile of annualized wealth, even within households over time and after controlling for other factors, suggesting that older households are not spending their wealth as quickly as their survival probabilities are falling.     

STASIS AMID CHANGE INCOME INEQUALITY IN CANADA 1965-1983

Income inequality in Canada has not changed significantly over the past two decades, though this apparent stability may be surprising in view of the major economic and social changes that occurred over this period. The share of income going to the bottom quintile remains at about four percent while the top quintile continues to receive about 40 percent of income.
Social trends such as lower fertility rates have coincided with increased female labour force participation to increase family incomes in the middle and upper-middle parts of the income spectrum. At the same time, the trend for baby boom children to establish their own separate households, and increased divorce and separation rates, have tended to create more small family units with low incomes. These social trends, in isolation of other factors, would have increased income inequality.
However, economic factors have apparently offset these tendencies. Since employment income is concentrated in the middle and upper-middle ranges, the relative fall in this source of income over the past two decades tended to be equalizing. Similarly, the fact that a large part of total investment income accrues to the elderly who have below average income implies that the trend towards high interest rates has been equalizing. Finally, the social "safety nets" put in place in the mid-1960s and early 1970s have grown in relative importance, and this too has had an equalizing impact on the distribution of income.
Given the overall stability in income inequality, the equalizing tendencies of economic factors such as high interest rates and relatively slow economic growth, with the large automatic responsiveness of governments' social safety net programs, appear to have just about exactly offset the disequalizing social factors of "baby boomers" leaving home, lower fertility, higher divorce and separation rates, and higher female labour force participation.     

The poverty experience of lone mothers and their children

Lone mothers, as sole caregivers and women, face unique challenges to guaranteeing the economic well-being of their children compared to lone fathers. While all lone parents face a trade-off in time spent earning wages and time spent caring for children, mothers are likely to earn wages lower than fathers, thus increasing their chances of falling into poverty. Using data from the U.S. Census Bureau’s 2013 Current Population Survey, we estimate the size of the gender poverty gap among lone-parent families. We apply the Oaxaca–Blinder decomposition to assess whether this gap can be solely attributed to parent and family demographics. Much of the poverty gap, however, is attributed to unobservables, suggesting the increased likelihood of being in poverty for lone-mothered families may be, in part, due to gender-based discrimination in labour markets.     

富爸爸、穷爸爸和子代收入差距

本文使用基于工具变量分位数回归的分解方法,通过构建低收入家庭子女与高收入家庭子女拥有相同的特征分布情况下的反事实收入分布,对高、低收入家庭子女的收入差距进行分解。结果显示,高、低收入家庭的子女之间的收入差距主要来源于教育水平、工作经验、工作单位性质等特征差异;两组子女间的回报差异存在,但主要影响低分位点处子女之间的收入差距,对高分位点处的收入差距影响有限。高分位点处子女之间的收入差距几乎能够完全被特征差异所解释。     

CHILD POVERTY, INVESTMENT IN CHILDREN AND GENERATIONAL MOBILITY: THE SHORT AND LONG TERM WELLBEING OF CHILDREN IN URBAN CHINA AFTER THE ONE CHILD POLICY

China's One Child Policy (OCP), introduced in 1979, changed fundamentally the nature of both existing and anticipated marriage arrangements and influenced family formation decisions in many dimensions, especially with respect to the number of and investment in children. The policy coincided with the Economic Reforms of 1979 and the trend toward greater urbanization, all of which may have influenced the wellbeing of children. This paper examines the mobility status consequence of children in urban China since the introduction of the OCP and the economic reforms using data drawn from urban household surveys in China. The analysis first makes the comparison between child poverty in Canada, the United Kingdom and urban India, where it was found that both status and trends of child poverty are very different among the countries, with children not being over-represented in the poverty group in urban China. The extent to which the policies influenced investment in children is next examined by studying the way in which the relationship between the educational attainment of children and family characteristics changed within families formed prior to and after 1979. We found that the impact of household income and parental educational attainment increased significantly over time, with a positive gender effect where girls advanced more than boys. Applying new techniques for measuring mobility, we observe the reduction in intergenerational mobility. This phenomenon is found to be particularly prevalent in the lower income quantiles, reinforcing a dynastic notion of poverty.     

The Sins of the Fathers: Intergenerational Income Mobility in China

This paper aims to obtain an accurate estimate of China's intergenerational income mobility and to present evidence on its distributional pattern. Using panel data from the China Health and Nutrition Survey (CHNS) over the period 1989–2009, I find that China is less mobile than most developed countries. Then, I employ five different approaches to investigate the distributional pattern of China's intergenerational mobility across income levels. The results suggest that poor families have relatively high mobility, indicating opportunities for the poor children to escape poverty. Finally, I show that while wealthy fathers are likely to pass on their favorable economic status to their sons, rich sons come from a very wide range of family economic backgrounds.     

生命周期视角下收入主导型多维贫困的识别与成因分析

本文根据我国扶贫政策的目标构建了“收入主导型”的多维贫困识别指标，并对成人和儿童设置了差异化的多维贫困识别标准，以此为基础运用CFPS数据度量了我国多维贫困的程度，最后进一步探究多维贫困产生的原因。有74%的儿童存在至少一个维度上的贫困。儿童的多维贫困程度比成人严重，儿童健康和教育维度贫困率都在20%左右，亟须从生命周期视角下构建精准扶贫政策体系。对多维贫困影响因素的分析结果显示，人力资本因素、家庭负债情况等因素影响显著，折射出教育扶贫、金融扶贫等政策的必要性和紧迫性。     

Living Decently

One of the reasons why poverty lines became popular at the turn of the century was their promise of a scientific technique that would dispense with moralising about poverty. We argue that a price paid in this quest has been an impoverishment of the richness of the notion of 'a decent life', the moral concept underlying poverty. In addition, poverty lines have in practice been more to do with inequality at the bottom end of the income distribution than with poverty. The purpose of this article is to rehabilitate the measurement of poverty, and to make it credible. We set out our preferred method of poverty measurement, and illustrate it using data from the Australian Standard of Living Study. A feature of our approach is to distinguish clearly between issues of inequality and issues of poverty. Questions such as who is on the bottom of the income distribution, whether this has changed over time, and how income levels of the worst off compare with the mean, are questions of inequality. As such, the answers tell us nothing at all about how the worst off are actually living. To answer that question, we require direct measures of consumption and of social participation. These measures are not as simple, but they provide us with knowledge about poverty that poverty lines have promised, but have not delivered in a credible fashion.     

Income, Health and Happiness

This article utilises unit record data from the 1989–90 National Health Survey to explore the relationships between low income and perceptions of health and happiness. After describing how the key variables were constructed, attention is focused on the incidence of perceived poor health and unhappiness among those individuals living in income units on either side of a poverty threshold related to the Henderson poverty line. The results reveal that those in poverty generally have poorer health and are less happy than those above the poverty threshold. The observed differences are statistically significant for many income unit types, particularly non-aged single people and couples with children. Attention then turns to exploring how health and happiness vary across the deciles of the income distribution. Again, significant differences are revealed, particularly when more sophisticated distributional measures are employed. Finally, consideration is given to the possibility that the results reflect reverse causality, and that the observed correlations incorporate the role of intervening variables.     

The Immunisation Status of Poor Children: An Analysis of Parental Altruism and Child Well-Being

One out of every five children in the United States is growing up in a household where the family income is at or below the poverty threshold. The stress of poverty creates heighten parental stress, straining their capacity to provide warmth, understanding, and guidance for their children. The lack of an adequate income simply may not allow parents to focus their time and energies on parenting; rather, they are constantly struggling to survive. From an economic viewpoint, poverty     

Trends in Child Poverty in Australia, 1982 to 1995–96

This study suggests that child poverty in Australia fell by about one-third between 1982 and 1995–96, largely as a result of the very substantial increases in government cash payments to lower income families with children. However, while there were sharp falls in poverty among dependent children, poverty rates among 15 to 18 year-olds who had left the parental home or who were still living at home but not in full-time study increased very sharply. In addition, the after-housing poverty picture did not look so optimistic, apparently due to a compositional shift in the types of families in after-housing poverty.     

GROWTH, POVERTY, AND INEQUALITY IN LATIN AMERICA: A CAUSAL ANALYSIS, 1970–94

Taking advantage of consistent poverty and income inequality data for 12 Latin American countries between 1970 and 1994, we analyze the determinants of changes in the incidence of urban and rural poverty and in Gini coefficients over spells of years, stressing in particular the role of aggregate income growth. We find that income growth reduces urban and rural poverty but not inequality. We also find that income growth is more effective in reducing urban poverty if the levels of inequality and poverty are lower, and the levels of secondary education higher. We show that there is an asymmetry in the impact of growth on poverty and inequality, with recession having strong negative effects on both poverty and inequality. Since growth does not reduce inequality, economic cycles create ratchet effects on the level of inequality. However, post-structural adjustment growth is quite effective at reducing poverty, particularly if inequality is low.     

FINDING THE POOR

As a basis for judging how public policy affects the poor, this article explores how "poor" families may be defined and how well such families can be distinguished from other families in the less developed countries. This is done by seeking proxies for poverty which are relatively easy to measure, accurate in discriminating between the poor and the non-poor, and relevant to public policy. To this end, a highly parsimonious model is developed, based on truncation and regression procedures, using only family size and number of wage earners in addition to either income or an education-age combination. Application of this model to data from household surveys in three major cities of Latin America shows that the model is highly effective in pinpointing poverty households, although the pattern of errors is not random, the most frequent type of error being to classify poverty households as non-poor.
Especially significant is that the model is nearly as effective for discriminating poverty households from others when financial variables are excluded as when they are included. This would suggest that a good deal of flexibility exists in deciding what variables to include in future studies of this type. The results also suggest that even better results should be possible if more complete information is obtained on the employment status of the different members of the household and on the contribution of each to household income. Ideally, the data collection and model development should proceed in an iterative manner since there are numerous possible variables as well as alternative model formulations.