Studying poverty over time: an analysis by gender and age in Europe

This paper aims to communicate a new conceptualization of persistent poverty used to build the class of longitudinal poverty indices by Mendola et al.(2011), and to show how these indices could be helpful in analyzing the characteristics of persistence of poverty among generations. The indices are based upon the idea that the longer the sequence of consecutive high poverty gaps is, the worse the situation experienced. Moreover they introduce, via a parameter, the idea that the evaluation of the individual experiences of poverty must take into account the poverty mobility in the society. An empirical application on European Community Household Panel data compares the contribution of each generation to the overall index in Europe and allows to understand the effects of some demographic characteristics on persistence of poverty. 1 Chronic poverty of young and women In this paper we focus on the persistence of poverty, with a particular attention paid to gender and age differences. Most of the gender studies maintain that at every stage of the life course women are more at risk of experiencing poverty (European Commission, 2006). This fact is mostly imputed to inequalities and discrimination in education and labour market opportunities and to the impact on both of these of family care responsibilities. Moreover differences in gender and in educational level are often overlapped since, among older generations, women had fewer educational opportunities and lower qualification levels. The way in which poverty acts in different stages of life course has ever concerned scholars and policy makers due to the differentiated and detrimental effect of being poor during the childhood, the adulthood or the older age. 1 Annalisa Busetta, Daria Mendola, Department of Economics, Business and Statistics (University of Palermo, Italy); e-mail: annalisa.busetta@unipa.it ; daria.mendola@unipa.it 2 Annalisa Busetta and Daria Mendola Our empirical analyses, made on a sample from the European Community Household Panel (ECHP), intend to show how longitudinal poverty impacts different subpopulations, revealing interesting differences among European Countries, often attributable to the influence of the welfare state models. 2 Measures and methods In order to measure the longitudinal poverty of individuals, we use the full version index in the class of Longitudinal Poverty Indices (LPI) proposed in Mendola et al. (2011) but ignoring the “recentness effect” (i.e. using only LPISE). This set of indices is based upon the idea that the closer (and the more severe) two years spent in poverty are, the more they contribute to the overall longitudinal poverty measure. Note that LPISE indices map all the longitudinal information inside the sequence of poverty statuses in a single number accounting simultaneously for the duration, sequencing and intensity of the individual poverty experience. The main characteristic of the class is that, playing with a set of parameters, one can give more or less importance to different aspects of the poverty experience, such as the intensity of the experiences of poverty and/or their sequencing, and/or their recentness, and/or the chances for an individual to escape poverty. The consequent class of Aggregate Longitudinal Poverty Indices (in the following, for the sake of shortness, named simply ALPI instead of ALPISE) is derived through a simple arithmetic mean of the individual longitudinal poverty indices LPISE. Therefore, at population level, the higher intensity of the longitudinal poverty of an individual can be compensated by the lower intensity of the longitudinal poverty of another individual. But the intensity of poverty, or even simply the status of poor, of an individual in a single year (i.e. cross-sectional poverty) should not be compensated (at aggregate level) by the non poverty of another individual in the same year. All the indices of the class (both at individual and aggregate level) are normalized in [0,1], where 0 implies minimum longitudinal poverty and 1 maximum longitudinal poverty. An interesting feature, shared by all the indices in the class of ALPI, is the decomposability property, which puts in evidence how different groups contribute differently to the overall evaluation of the longitudinal poverty in a society. Hence, dividing the entire population in M subgroups according to any characteristic of interest, and if, for each year, all the groups share the same poverty line and the permanence probabilities are estimated at population level, the proportional Contribution to the Poverty Persistence of group m (CPPm) can be decomposed by the following ratio: