1. Absolutely poor or relatively poor: does is matter for social policy design ? Chris de Neubourg Washington DC, November 2009

2. Maastricht Graduate School of Governance 1.Does it matter for priority setting ? 2.Does it matter for identifying the poor? 3.Does it matter for identifying the long term poor ? 4.Does it matter when setting levels and eligibility of means tested benefits ? 5.Does it matter when assessing the incidence and adequacy for targeted and non-targeted benefits ?

3. Maastricht Graduate School of Governance Basic data Poverty estimates for 15 EU countries and the USA for the period 1993 – 2000 Using household surveys in the EU and the in the USA (ECHP and CNEF-PSID) Using relative poverty concept (Laeken) and an absolute concept (Orshansky) for the 16 countries

4. Maastricht Graduate School of Governance Does is matter for setting policy priorities ? Table 1: Poverty incidence (in % of individuals, in 1996 and 2000) Laeken (relative) poverty Orshansky (absolute) poverty

5. Maastricht Graduate School of Governance Does it matter for identifying the poor?

6. Maastricht Graduate School of Governance Does it matter for identifying the long term poor ?

7. Maastricht Graduate School of Governance Percentage of persistent “Laeken” poor who are also “Orshansky” poor, 2000

8. Maastricht Graduate School of Governance Does it matter when setting levels and eligibility of means tested benefits ? Means tested benefits in Europe implicitly set absolute poverty line in the form of minimum income guarantees Social assistance and social assistance plus Are these implicit poverty lines de facto similar to the (US)“Orshansky” poor ?

9. Maastricht Graduate School of Governance Average social assistance level as percentage of “Orshansky” poverty line, 1993 - 2000

10. Maastricht Graduate School of Governance Average social assistance level as percentage of “Orshansky” poverty line, 1993 - 2000

11. Maastricht Graduate School of Governance Average social assistance level as percentage of “Orshansky” poverty line, 1993 - 2000

12. Maastricht Graduate School of Governance Average social assistance level as percentage of “Orshansky” poverty line, 1993 - 2000

13. Maastricht Graduate School of Governance Average minimum income guarantee as percentage of “Orshanky” poverty line

14. Maastricht Graduate School of Governance Minimum income guarantee as percentage of “Laeken” poverty line, 1993 - 2000

15. Maastricht Graduate School of Governance Average yearly minimum income guarantee 1993 – 2000 (in nominal euro)

16. Maastricht Graduate School of Governance Average yearly social assistance benefit and average yearly minimum income guarantee as percentage of “Laeken” (rel) and “Orshansky” (us) poverty lines, 2000.

17. Maastricht Graduate School of Governance Does it matter when assessing the incidence and adequacy for targeted and non-targeted benefits ?

18. Maastricht Graduate School of Governance

19. Figure 6: Incidence of social assistance (below median income, 2000)

20. Maastricht Graduate School of Governance Mean value of social assistance (below median income, 2000)

21. Maastricht Graduate School of Governance Incidence of family allowances (below median income, 2000)

22. Maastricht Graduate School of Governance Mean value of family allowances (below median income, 2000)

23. Maastricht Graduate School of Governance Absolutely poor or relatively poor: Does is matter ? For policy priorities For identification of the poor For identification of the poor at risk of persistence poverty For setting minimum income guarantee levels For assessing incidence and adequacy of policy measures