CHECKING THE CONSISTENCY OF POVERTY IN POLAND: EVIDENCE by Adam Szulc Warsaw School of Economics, Poland

Abstract This study investigates relationships between various types of poverty in Poland. Monetary poverty is examined together with a subjective one and with a deprivation, conceived as a lack of particular resources. The results reveal quite important discrepancies between those three types of poverty. Though income and expenditure poverty incidence generally decreased over investigated period, the rate of persons living in subjective poverty was higher in 2003 than in 1997, while deprivation substantially decreased. Moreover, quite large discrepancies at the individual levels could be observed. Some conflicting results were found between correlates of poverty of three aforementioned types as well.

DIMESIONS OF POVERTY EXAMINED: current monetary (monthly income and expenditures) material resources (assets and durables) subjective income evaluations THE DATA SOURCE: Household Budget Survey FORMAL APPROACH TO MULTIDIMENSIONALITY OF POVERTY (OR SOLVING THE AGGREAGATION PROBLEM): generally NONE

ANALYSES PERFORMED 1997 – 2003: Time series on monetary poverty (absolute and relative) 1997, 2000 and 2003: Deprivation (lack of particular resources) and subjective poverty: among the monetary poor and in the whole sample Asset, subjective and expenditure prosperity: among the monetary poor and in the whole sample Overlapping (“core”) poverty rates Correlates of three dimensions of poverty Correlates of inconsistent poverty

CONFLICTING RESULTS IN POVERTY CORRELATES 1. NATIONAL INDEX DECOMPOSITION vs. PROBIT REGRESSION For household of farmers and farmer-employees, and single-parent households: poverty incidence above national rates and negative or non-significant estimates of risk of poverty. For household of pensioners: poverty incidence below national rates and positive, significant estimates of risk of poverty. 2. MONETARY POVERTY vs. DEPRIVATION (IN 2000) Deprivation of degree 1: lack of one of basic household facilities[1][1] Deprivation of degree 4: lack of four basic household facilities For single-parent households: negative estimates of risk of monetary poverty and positive of deprivation. For households with one child: positive estimates of risk of monetary poverty and negative of deprivation 1 and 4. For households with two children and large households: positive estimates of risk of monetary poverty and negative of deprivation MONETARY vs. SUBJECTIVE POVERTY For single-parent households: negative estimates of risk of monetary poverty and positive of deprivation [1] Bath or shower, inside toilet, running hot water, central heating. [1]

4. CORRELATES OF INCONSISTENT POVERTY Monetary poverty and: “prosperity” in terms of household assets and durables, subjective evaluations and expenditures on non-food items lack of subjective poverty lack of deprivation of degree one lack of deprivation of degree four The following attributes of the household’s head decrease probability of inconsistency in poverty: blue collar worker, female, pensioner and welfare state recipient. This probability increases with respect to the household size.

CORRELATES OF CONCENTRATION OF POVERTY Estimated by ordered probit regression with independent variable defined as follows: value 0 means absence of poverty of any type, values from 1 to 7 are obtained by adding successively further types of poverty, namely: i/ income or expenditure poverty, ii/ income and expenditure poverty, iii/ subjective poverty, and iv-vii/ four degrees of deprivation. Negative and significant estimates were obtained, inter alia, for farmer- employees, and single-parent household. In 1997 also for farmer’s households.

CONCLUSIONS 1.Trends in monetary and subjective poverty, and in deprivation differed considerably. 2.Presence of one or two children reduces risk of deprivation, though it increases risk of monetary poverty. 3.Single-parent households face higher than average risk of subjective poverty and deprivation, in spite of lower risk of monetary poverty. 4.Households headed by blue collar worker, women, pensioner or welfare state recipient suffering one type of poverty are rather unlikely to avoid other types. 5.Overlapping (“core”) poverty rates are very low, as compared to other types of poverty, and decreased between 1997 and 2003.