Multidimensional Poverty Measurement Dr David Gordon Director Townsend Centre for International Poverty Research University of Bristol Simposio: Probreza, disigualdad y exclusion social Universidad Nacional Autónoma de México (UNAM) 30th November – 1st December 2010

Web Site http://www.bristol.ac.uk/poverty x Web Site http://www.bristol.ac.uk/poverty

Cartogram of the World Population http://www.worldmapper.org/index.html

Number of people with incomes over $200 per day http://www.worldmapper.org/index.html

Number of people with incomes less than $10 per day http://www.worldmapper.org/index.html

The Need to Eradicate Child Poverty

Age at death by age group, 1990-1995 Source: The State of the World Population 1998

Death Toll of 20th Century Atrocities http://users. erols Death toll of young children from poverty, 1990 to 1995 10

Absolute Poverty After the World Summit on Social Development in Copenhagen in 1995, 117 countries adopted a declaration and programme of action which included commitments to eradicate “absolute” and reduce “overall” poverty. Absolute poverty was defined as "a condition characterised by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information. It depends not only on income but also on access to services." (UN, 1995)

The Minimum Core Obligations Human Rights The Minimum Core Obligations The UN Committee on Economic, Social and Cultural Rights “is of the view that a minimum core obligation to ensure the satisfaction of, at least, minimum essential levels of each of the rights is incumbent upon every member state party. Thus, for example, a state party in which any significant number of individuals is deprived of essential foodstuffs, of essential primary health care, of basic shelter and housing, or of the most basic form of education is, prima facie, failing to discharge its obligations under the convention”

Continuum of deprivation Deprivation can be conceptualised as a continuum which ranges from no deprivation through mild, moderate and severe deprivation to extreme deprivation. Continuum of deprivation In order to measure absolute poverty amongst children, it is necessary to define the threshold measures of severe deprivation of basic human need for: food safe drinking water sanitation facilities health shelter education information access to service

Child Poverty in the World Over one billion children – half the children in the world- suffer from severe deprivation of basic human need and 30% (650 million) suffer from absolute poverty (two or more severe deprivations). ‘severe deprivation of basic human need’ are those circumstances that are highly likely to have serious adverse consequences for the health, well-being and development of children. Severe deprivations are causally related to ‘poor’ developmental outcomes both long and short term.

Severe Deprivation of Basic Human Need for Children Almost a third of the world’s children live in dwellings with more than five people per room or which have a mud floor. Over half a billion children (27%) have no toilet facilities whatsoever. Over 400 million children (19%) are using unsafe (open) water sources or have more than a 15-minute walk to water. About one child in five, aged 3 to 18, lacks access to radio, television, telephone or newspapers at home. Sixteen percent of children under five years in the world are severely malnourished, almost half of whom are in South Asia. 275 million children (13%) have not been immunised against any diseases or have had a recent illness causing diarrhoea and have not received any medical advice or treatment. One child in nine aged between 7 and 18 (over 140 million) are severely educationally deprived - they have never been to school.

Policy Definitions and the Measurement of Poverty

European Union legal definition of poverty On the 19 December 1984, the European Commission extended the definition of poverty as: “the poor shall be taken to mean persons, families and groups of persons whose resources (material, cultural and social) are so limited as to exclude them from the minimum acceptable way of life in the Member State in which they live.” (EEC, 1985). This is clearly relative definitions of poverty in that it refers poverty not as some ‘absolute basket of goods’ but in terms of the minimum acceptable standard of living applicable to a certain Member State and within a person’s own society.

Mexican Law on Poverty Measurement General Law of Social Development (LGDS): Article 36 – An official Multidimensional Poverty Measure must be produce which includes at least the following eight dimensions; Per capita current income Average gap between compulsory education and actual education at the household level (educational gap) Access to Health Services Access to Social Security Dwelling characteristics, space and quality Access to basic dwelling related services (water, sewerage, electricity, etc) Access to food Level of social cohesion

Low Income in Britain 1961-2003

Mexican Uni-dimensional Income Poverty Measures There are a large number of these, for example; Sedesol alimentary threshold (ie basic food costs) – $1.5 to $2.0 person/day Sedesol capacities threshold (i.e. alimentary plus education & health costs) - $1.8 to $2.4 person/day Sedesol patrimony threshold (ie capacities plus dwelling, transport and clothing) - $2.8 to $4.1 person/day

Vulnerable people by social deprivations Vulnerable people by income Total population 2008 (106,680,526) Population without deprivations and with an adequate level of economic wellbeing Vulnerable people by social deprivations 33.0% 35.2 millions 2.0 deprivations on average 18.3% 19.5 millions Wellbeing Income MODERATE POVERTY MULTIDIMENSIONAL POVERTY Vulnerable people by income EXTREME POVERTY 44.2% 47.2 millions 2.7 deprivations on average Deprivations 4.5 % 4.8 millions 3 2 1 4 5 6 Social Rights Source: estimates of the CONEVAL based on the MCS-ENIGH 2008.

Human Rights and the Cause of Poverty Human rights open up for analysis the structural causes of poverty, rather than only its symptoms, and the impact of government action or inaction on people living in poverty. In this sense, the goal of human rights is to ‘render power accountable … to reconnect power and obligations’ (Gready & Phillips, 2009,p 3). Using human rights entails a shift in perspective from needs and charity to socially and legally guaranteed entitlements and duty: states have legal obligations for which they can be held accountable. Seen through a human rights lens, poverty is ‘neither natural nor inevitable but becomes something done to people, for whom certain actors bear responsibility’ (Gready, 2008, p. 742) Source: Donald and Mottershaw (2009) Poverty, Inequality and Human Rights http://www.jrf.org.uk/publications/poverty-inequality-human-rights

Human Rights and Multidimensional Poverty The full package of human rights provides a lens through which poverty is seen as multi-dimensional, encompassing not only a low income, but also other forms of deprivation and loss of dignity. Donald and Mottershaw (2009) Poverty, Inequality and Human Rights

The Problem with Capability Theory for Poverty Measurement There is no agreed list of capabilities – the work of Nussabaum is highly contested e.g. the capability of interacting with ‘other species’ There is no agreed methodology for drawing up a list of capabilities Sen has argued for over 20 years that poverty is absolute in “the space of the capabilities themselves – the direct constituent of the standard of living – escape from poverty has an absolute requirement, to wit, avoidance of this type of shame. Not so much having equal shame as others, but just not being ashamed, absolutely.” A fundamental problem with this argument is that it is non-sociological, it assumes that a person’s capabilities can be determined and interpreted independently of the society in which they live i.e. that ‘shame’ has some ‘absolute’ meaning independent of society Townsend consistently argued for over 50 years that all conceivable workable definitions of poverty – even those that purport to be absolute definitions – only have meaning relative to the society in which a person lives. If Townsend is correct then it is literally impossible to define or measure poverty in absolute terms in capability or any other space i.e. Sen’s argument is meaningless semantics

The Importance of Social Right & Services

The Average Value of Services to UK Households in 2008 Poorest 10% Richest 10% Market income (earnings, investments, etc) 4,620 103,501 Direct taxes 1,165 25,937 Indirect taxes 3,138 8,654 Post tax market income 317 68,910 Total cash benefits 4,917 1,343 Value of in kind services Education 4,494 1,319 National health service 2,231 2,040 Housing subsidy 45 2 Rail travel subsidy 30 164 Bus travel subsidy 49 86 School meals and welfare milk 90 1 Total Services (in-kind benefits) 6,938 3,611 Final income 12,172 73,864

Economic Cost of Child Poverty in the UK Child poverty costs the UK at least £25 billion a year, (equivalent to 2% of GDP) including £17 billion that could accrue to the Exchequer if child poverty were eradicated. Public spending to deal with the fallout of child poverty is about £12 billion a year, about 60 per cent of which goes on personal social services, school education and police and criminal justice. - The annual cost of below-average employment rates and earnings levels among adults who grew up in poverty is about £13 billion, of which £5 billion represents extra benefit payments and lower tax revenues; the remaining £8 billion is lost earnings to individuals, affecting gross domestic product (GDP).

Bramley, G. and Watkins, D. (2008) The public service costs of child poverty. York: JRF

The Effects of the Global Economic Crisis

http://www.guardian.co.uk/news/datablog/2009/mar/25/banking-g20

The Scale of the Financial Rescue in the USA & UK The bank’s profits were private but the losses belong to the public! http://news.bbc.co.uk/2/hi/business/7893317.stm

Paying for the US Financial Rescue http://flowingdata.com/2009/03/13/27-visualizations-and-infographics-to-understand-the-financial-crisis/

The Global Financial Crisis: the Effects on Children & Young People It seems inevitable that the global financial crisis will increase child and youth poverty in both the ‘rich’ and ‘poor’ countries. The global recession will lead to cuts in social expenditures on health, education and other services which are crucial to children’s well being. Unemployment will increase and the worst affected are likely to be young workers (16-24), those with poor educational qualifications, those living in already impoverished areas/regions and some minority groups. The value of remittances will decline as will economic migration opportunities. Foreign Direct Investment will decline Global demand for exports will decline Child labour may increase in response to failing household incomes and reduced education budgets Domestic violence and crime may increase due to financial stress

Scientific Definition and Measurement of Poverty

Scientific Definitions of Poverty Poverty can be defined as; Command over insufficient resources over time The result of poverty is deprivation

Peter Townsend’s concept of relative deprivation Argues that poverty can only be measured: “objectively and applied consistently only in terms of the concept of relative deprivation.…. The term is understood objectively rather than subjectively. Individuals, families and groups in the population can be said to be in poverty when they lack the resources to obtain the types of diet, participate in the activities and have the living conditions and amenities which are customary, or at least widely encouraged or approved, in the society to which they belong” (1979, p 31)

Peter Townsend’s concept of dynamic poverty “poverty is a dynamic, not a static concept…Our general theory, then, should be that individuals and families whose resources over time fall seriously short of the resources commanded by the average individual or family in the community in which they live . . . are in poverty.” Townsend (1962, p 219)

Modal Deprivation by Logarithm of Income as a Percentage of Supplementary Benefit Scale Rates (Townsend, 1979)

Definition of poverty

Dynamics of poverty

Poverty Groups

Vulnerable people by social deprivations Vulnerable people by income Total population 2008 (106,680,526) Population without deprivations and with an adequate level of economic wellbeing Vulnerable people by social deprivations 33.0% 35.2 millions 2.0 deprivations on average 18.3% 19.5 millions Wellbeing Income MODERATE POVERTY MULTIDIMENSIONAL POVERTY Vulnerable people by income EXTREME POVERTY 44.2% 47.2 millions 2.7 deprivations on average Deprivations 4.5 % 4.8 millions 3 2 1 4 5 6 Social Rights Source: estimates of the CONEVAL based on the MCS-ENIGH 2008.

The research aims To improve the measurement of poverty, deprivation, social exclusion and standard of living. To measure the change in the nature and extent of poverty and social exclusion over the past ten years. To produce policy-relevant results about the causes and outcomes of poverty and social exclusion.

International Advisory Board 1) Dr Aya Abe (National Institute of Population and Social Security Research, Japan) 2) Professor Julio Boltvinik (El Colegio de México, Mexico) 3) Dr Petra Böhnke (WZB, Germany) 4) Madior Fall (Afristat, Mali & INSEE, France) 5) Professor Bjorn Hallerod (University of Gothenburg, Sweden) 6) Dr Daniel He-chiun Liou (Asia University, Taiwan) 7) Professor Brian Nolan (University College Dublin, Ireland) 8) Bryan Perry (Research Manager, Ministry of Social Development, New Zealand) 9) Professor Veli-Matti Ritakallio (University of Turku, Finland) 10) Pedro Sáinz - Secretary of the UN Expert Group on Poverty Statistics (Rio Group, Brazil) 11) Professor Peter Saunders (University of New South Wales, Australia) 12) Dr Gemma Wright (University of Oxford) – work in South Africa

The Bristol Social Exclusion Matrix (B-SEM)