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2013 | OriginalPaper | Buchkapitel

4. Poverty and Inequality

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Abstract

Poverty and economic inequality are two of the most highly contested policy issues in both developing and advanced countries. While poverty is frequently associated with the lack of economic progress with the view that greater progress brought about by increasing economic growth and expanding economic opportunities can lower the experience of poverty, the prevalence of poverty amidst the plenty in high-income countries has also been a difficult challenge for policymakers. The issue first is whether or not individuals can derive earnings from the labor market that are sufficient to maintain a basic living standard, which if deficient for reasons beyond the control of individuals can be addressed by some state measures. But the idea of basic living standard itself can be politically charged as what is needed to maintain this standard largely determines the poverty measurement outcomes showing the face of poverty in any society. It is in this relative sense that the issues of poverty and inequality become highly contested as they touch on who has the responsibility to ensure economic security and whose responsibility it is to determine to what extent poverty and inequality are tolerated.

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Fußnoten
1
The LIS (2013) defines disposable household income as the sum of cash or noncash incomes from paid work, capital, social security and assistance transfers, and private transfers, after subtracting the amount of income taxes and social contributions. The equivalence scale used takes the form of the unadjusted household income divided by square root of the number of household members regardless of their age or relationship. Other features used in computing these figures include weighting by person-level adjusted weights, top and bottom coding of incomes (at one percent of the equivalized mean income and 1,000% of the median of nonequivalized income, respectively), and exclusion of all missing or zero household incomes. Additional methodological guides and documentations can be obtained from the LIS (2013).
 
2
Even when these surveys are conducted annually, the LIS database provides data with some intervals as they need to go through the process of data mining, or “lisification” to ensure comparability across countries.
 
3
It must be noted that the number of years for which data are available is limited for the entire period and especially for the decade-wise breakdowns. In many cases, for example, the decade-wise coverage goes further down to 1 year only. While this limited variability has implications for the definitiveness of estimates, the use of data from nationally representative surveys makes them reasonably valid and accurate.
 
4
This new measure misses the intuitive appeal and meaning offered by its original variables, however. It cannot be interpreted as showing the percent population or percent distribution of incomes in the strictest sense, for example, since the two original measures are multiplied together. Yet, this provides an important basis for cross-national comparisons by aggregating the measures of poverty and inequality into a summary indicator.
 
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Metadaten
Titel
Poverty and Inequality
verfasst von
Udaya R. Waglé
Copyright-Jahr
2013
DOI
https://doi.org/10.1007/978-3-319-02815-6_4

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