An Empirical Analysis of Poverty and its Determinants in Trinidad and Tobago Ms. Raynata Wiggins and Dr. Sandra Sookram Sir Arthur Lewis Institute of Social and Economic Studies The University of the West Indies, St. Augustine Campus

OUTLINE OF PRESENTATION Introduction Background Objectives of the Study Data Methodology Results Findings Conclusion

INTRODUCTION Poverty is one of the most serious and persistent problems facing the world Poverty eradication is the first goal of the Millennium Development Goals Poverty Eradication and Social Justice is Pillar 2 in the Seven Interconnected Pillars for Sustainable Development in Trinidad and Tobago

BACKGROUND Trinidad and Tobago has one of the highest per capita incomes in the LAC region The 2014 Human Development Report classifies T&T as having High Human Development The country has experienced positive economic growth due in large part to vast oil and gas reserves.

BACKGROUND (continued) Poverty reduction still remains a challenge 16.7% (2005 SLC) 14.8% (2008/2009 HBS) & of the population lived below the poverty line

OBJECTIVES OF THE STUDY Identify the determinants of poverty Examine the socioeconomic and demographic characteristics that significantly influence the probability of being poor

DATA The realised sample was 7,090 households Data is drawn from the 2008/2009 Household Budgetary Survey (HBS) The HBS provides detailed information on the expenditure patterns of households The realised sample was 7,090 households

METHODOLGY Welfare measure Consumption expenditure is used as a proxy for income Welfare for each household is calculated using consumption-expenditure We employ a probit model fitted by maximum likelihood Value of 1 denotes if a household is poor and a value of 0 if otherwise Model

RESULTS EXPLANATORY VARIABLES POOR Household size 0.267 (5.54)** Number of children 0.247 (3.28)** Age of head 0.003 (0.65) Sex of head (female) 0.161 (1.43) Single parent 0.376 (2.99)** Area of dwelling (base category: Urban)   Rural 0.086 (0.59) Ethnicity of head (base category: African) Indian 0.183 (1.49) Mixed -0.140 (1.15) Marital status of head (base category: Single) Separated -0.267 (2.42)* Living together (married or common-low) 0.166 (0.89) Highest education of head (base category: University) No education 0.822 (1.25) Pre-school 1.561 (3.39)** Primary school 1.520 (5.88)** Secondary school 0.969 (3.92)** Other 0.791 (2.66)** Main employment status of head (base category: Permanent ) Temporary 0.577 (4.95)** Contract 0.256 (1.58) Seasonal -0.090 (0.18) Occasional / Odd Jobs 0.503 (1.73)

RESULTS (continued) EXPLANATORY VARIABLES POOR Tenancy of household (base category: Owner occupied) Unfurnished rented / leased 0.529 (4.31)** Furnished rented / leased 0.678 (2.60)** Rent free 0.846 (6.41)** Squatted 0.388 (0.90) Other -0.727 (0.99) Area of residence (base category: Port Of Spain) San Fernando -0.240 (0.84) Arima 0.004 (0.01) Chaguanas -0.430 (1.45) Point Fortin -0.169 (0.51) Diego Martin -0.481 (1.91) San Juan / Laventille -0.662 (2.88)** Tunapuna / Piarco -0.759 (3.19)** Couva / Tabaquite / Talparo -0.570 (2.16)* Mayaro / Rio Claro -0.150 (0.37) Sangre Grande -0.435 (1.36) Princes Town -1.096 (3.63)** Penal / Debe -0.505 (1.54) Siparia -0.348 (1.06) Tobago -0.768 (2.42)* Constant -2.876 (7.17)** Observations 1,170 Robust standard errors are reported in parentheses. *Significant at 10%; **significant at 5%

FINDINGS Household size and number of children per household significantly influences poverty Single parent-headed households are more likely to live below the poverty line When compared to single persons, legally separated couples are significantly less likely to be poor

FINDINGS (continued) Education has an important influence on poverty The main employment of the head significantly influenced the probability of being poor

FINDINGS (continued) Households that rented were significantly more likely than their counterparts to be poor Area of residence is a major determinant of poverty

RECOMMENDATIONS & CONCLUSION Greater emphasis should be placed on poverty correlates such as household size and composition More attention should be placed on investing in tertiary level education that directly targets low income families Social protection coverage as it relates to periodically unemployed workers should be made a priority policy area

THANK YOU FOR YOUR ATTENTION