UNICEF
Innocenti Research Centre
Report Card 10

Measuringchild poverty
New league tables of child poverty
in the world’s rich countries

Innocenti Report Card 10 was written by Peter Adamson.
Two background papers from the UNICEF Innocenti Research Centre
support this Report:
1.

Bradshaw, J., Y. Chzhen, C. de Neubourg, G. Main, B. Martorano
and L. Menchini (2012), ‘Relative Income Poverty among Children in
Rich Countries’, Innocenti Working Paper 2012-01, UNICEF Innocenti
Research Centre, Florence.
www.unicef-irc.org/publications/pdf/iwp_2012_01.pdf

2.

de Neubourg, C., J. Bradshaw, Y. Chzhen, G. Main, B. Martorano
and L. Menchini (2012), ‘Child Deprivation, Multidimensional
Poverty and Monetary Poverty in Europe’, Innocenti Working Paper
2012-02, UNICEF Innocenti Research Centre, Florence.
www.unicef-irc.org/publications/pdf/iwp_2012_02.pdf

The UNICEF Innocenti Research Centre would like to acknowledge thegenerous support for Report Card 10 provided by the Andorran,Belgian, Swiss and United Kingdom National Committees for UNICEF.
Any part of this Innocenti Report Card may be freely reproduced using
the following reference:
UNICEF Innocenti Research Centre (2012), ‘Measuring Child Poverty:
New league tables of child poverty in the world’s rich countries’,
Innocenti Report Card 10, UNICEF Innocenti Research Centre, Florence.

The Report Card series is designed to monitor and compare theperformance of economically advanced countries in securing the rightsof their children.
The Innocenti Research Centre (IRC) was established in Florence, Italyin 1988 to strengthen the research capability of the United Nations
Children’s Fund (UNICEF) and to support its advocacy for children
worldwide. IRC is the dedicated research hub of the UNICEF Office of
Research (OOR), which provides global leadership for the organization’s
strategic research agenda around children. The Office aims to set out acomprehensive framework for research and knowledge within theorganization, in support of its global programmes and policies. Throughstrengthening research partnerships with leading academic institutions
and development networks in both the North and South, the Officeseeks to leverage additional resources and influence in support ofefforts towards policy reform in favour of children.
The Centre's publications are contributions to a global debate on childrights and help facilitate full implementation of the Convention on the
Rights of the Child in low-, middle- and high-income countries. The
views expressed are those of the authors and researchers and do notnecessarily reflect the policies or views of UNICEF.

© United Nations Children’s Fund (UNICEF), May 2012
ISBN: 978-88-8912-965-4
ISSN: 1605-7317
UNICEF Innocenti Research Centre
Piazza SS. Annunziata, 1250122 Florence, Italy
Tel: (+39) 055 2033 0
Fax: (+39) 055 2033 220
florence@unicef.org
www.unicef-irc.org

Which countries
are included?

Data on child deprivation rates
are drawn from the 2009 roundof the European Union Statistics
on Income and Living Conditions
and are therefore available for 29
countries, i.e. all 27 countries of
the European Union plus Norway
and Iceland. Most of these (23out of 29) are also members of
the Organisation for Economic
Co-operation and Development(OECD). The exceptions are
Bulgaria, Cyprus, Latvia,
Lithuania, Malta and Romania,
which are EU member states,
but not members of the OECD.
Data on relative child poverty
rates are also available for six
additional OECD countries(Australia, Canada, Japan,
New Zealand, Switzerland, andthe United States). The analysisof relative child poverty therefore
includes the following 35
countries:
Australia, Austria, Belgium,
Bulgaria, Canada, Cyprus,
Czech Republic, Denmark,Estonia, Finland, France,
Germany, Greece, Hungary,
Iceland, Ireland, Italy, Japan,
Latvia, Lithuania, Luxembourg,
Malta, the Netherlands,
New Zealand, Norway, Poland,
Portugal, Romania, Slovakia,
Slovenia, Spain, Sweden,
Switzerland, United Kingdom,
United States.

I n n o c e n t i

R e p o r t

C a r d1 0

UNICEF
Innocenti Research Centre

This report sets out the latest internationally comparable data onchild deprivation and relative child poverty. Taken together, thesetwo different measures offer the best currently available pictureof child poverty across the world’s wealthiest nations.
Previous reports in this series have shown that failure toprotect children from poverty is one of the most costly mistakes
a society can make. The heaviest cost of all is borne by thechildren themselves. But their nations must also pay a verysignificant price – in reduced skills and productivity, in lower
levels of health and educational achievement, in increased
likelihood of unemployment and welfare dependence, in thehigher costs of judicial and social protection systems, and in
the loss of social cohesion.
The economic argument, in anything but the shortest term, istherefore heavily on the side of protecting children from poverty.
Even more important is the argument in principle. Because
children have only one opportunity to develop normally in mind
and body, the commitment to protection from poverty must be
upheld in good times and in bad. A society that fails to maintainthat commitment, even in difficult economic times, is a societythat is failing its most vulnerable citizens and storing up
intractable social and economic problems for the years
immediately ahead.
It is for these reasons that this comparative snapshot of childpoverty in the industrialized nations is presented for theattention of political leaders, press and public.

1

2

I n n o c e n t i

T W O

V I E WS

OF

CHILD

R e p o r t

C a r d

1 0

P OV ER T Y

New league tables of child poverty
in the world’s rich countries

Fig. 1a A league table of childdeprivation, 29 economicallyadvanced countries

0.9

Iceland

1.3

SwedenFigure 1a shows the percentage of children(aged 1 to 16) who lack two or moreof the following 14 items because thehouseholds in which they live cannot
afford to provide them.

1.9

Norway2.5

Finland

1.
2.

2.6

Denmark

2.7

Netherlands

Three meals a day

4.4

Luxembourg

At least one meal a day with meat,chicken or fish (or a vegetarianequivalent)

4.9

Ireland5.5

United Kingdom

7.0

Cyprus3.

Fresh fruit and vegetables every day

4.

Books suitable for the child’s age andknowledge level (not including
schoolbooks)

8.1

Spain

8.3

Slovenia

8.7

Austria5.

Outdoor leisure equipment (bicycle,
roller-skates, etc.)

8.8

Czech Republic

6.

Regular leisure activities (swimming,
playing an instrument, participating inyouth organizations etc.)

8.8

Germany

8.9

Malta

9.1

Belgium

10.1

France12.4

Estonia

13.3

Italy

7.

8.
9.

Indoor games (at least one per child,including educational baby toys,building blocks, board games,
computer games etc.)
Money to participate in school trips
and events
A quiet place with enough roomand light to do homework

17.2

Greece19.2

Slovakia

19.8

Lithuania

10. An Internet connection

20.9

Poland11. Some new clothes (i.e. not all
second-hand)

27.4

Portugal

12. Two pairs of properly fitting shoes(including at least one pair of
all-weather shoes)

31.8

Latvia31.9

Hungary

13. The opportunity, from time to time, toinvite friends home to play and eat
14. The opportunity to celebrate special
occasions such as birthdays, namedays, religious events, etc.

0

56.6

Bulgaria

72.6

Romania102030Child deprivation(% of children lacking two or more items)
Note: Data refer to children aged 1 to 16.
Source: Calculations based on EU-SILC 2009.

The data are drawn from the 2009 round of the European Union Statistics on Income and Living Conditions (EU-SILC)
and are not available for non-European countries of the Organisation for Economic Co-operation and Development (OECD).

I n n o c e n t i

R e p o r t

C a r dIntroduction
The league tables on these pages
present the latest available data on childpoverty across the world’s rich nations.
Figure 1a, made available here for the
first time, shows the proportion of

1 0

3children in each country who are
deprived – i.e. ‘lacking two or more’of 14 items considered normal andnecessary for a child in an
economically advanced country(see opposite for the full list).

Figure 1b shows the percentage ofchildren living in relative poverty,
defined as living in a household whose
income, when adjusted for family sizeand composition, is less than 50% of
the median income for the country inwhich they live.

Fig. 1b A league table of relative child

4.7

Icelandpoverty, 35 economically advanced
countries

5.3

Finland

6.1

CyprusFigure 1b shows the percentage of children(aged 0 to 17) who are living in relative
poverty, defined as living in a household inwhich disposable income, when adjusted
for family size and composition, is lessthan 50% of the national median income.

6.1

Netherlands

0

6.1

Norway6.3

Slovenia

6.5

Denmark

7.3

Sweden7.3

Austria

7.4

Czech Republic

8.1

Switzerland

8.4

Ireland8.5

Germany

8.8France

8.9

Malta

10.2

Belgium

10.3

Hungary

10.9

Australia

11.2

Slovakia

11.7

New Zealand

11.9

Estonia12.1

United Kingdom

12.3

Luxembourg

13.3

Canada14.5

Poland14.7

Portugal

14.9

Japan

15.4

Lithuania

15.9

Italy

16.0

Greece

17.1

Spain

17.8

Bulgaria

18.8

Latvia

23.1

USA

25.5

Romania102030Child poverty rate(% of children living in households with equivalent income lower than 50% of national median)Note: Data refer to children aged 0 to 17.
Sources: Calculations based on EU-SILC 2009, HILDA 2009, SLID 2009, SHP 2009, PSID 2007. Results for New Zealand are from Perry(2011). Results for Japan are from Cabinet Office, Gender Equality Bureau (2011).

Some OECD countries – Australia, Canada, Japan, New Zealand, Switzerland and the United States – are included in the league tableof relative child poverty (Figure 1b) but could not be included in the league table of child deprivation (Figure 1a) because relevant
data are not available. Child deprivation data are drawn from the European Union Statistics on Income and Living Conditions and are
therefore only available for the 27 EU countries plus Iceland and Norway.

40

4

I n n o c e n t i

As may be seen at a glance, the two
league tables project two very different
pictures of child poverty in the world’s
rich nations. What these different
pictures mean – the relationshipbetween them and the controversies
surrounding them – is the subject of
this Report Card.

Slipping down the agenda
In the wake of statistics following thepost-2008 economic crises, the childpoverty rate has rarely surfaced.
“In a downturn,” says Sharon Goldfeld,
National Director of the Australian
Early Development Index, “the firstthing that happens is that children drop off
the policy agenda.” Yet it is arguable thatthe child poverty rate is one of themost important of all indicators of asociety’s health and well-being. For thehere and now, it is a measure of what
is happening to some of society’s mostvulnerable members. For the years tocome, it is a pointer to the well-being
and cohesion of society as a whole.
Previous reports in this series havepresented the evidence for the close
association between child poverty
and a long list of individual and social
risks – from impaired cognitive
development to increased behaviouraldifficulties, from poorer physical healthto underachievement in school, fromlowered skills and aspirations to higher
risks of welfare dependency, from theR e p o r t

C a r dgreater likelihood of teenage
pregnancy to the increased probabilityof drug and alcohol abuse. That there
are many exceptions – many children
who grow up in economically poorfamilies who do not fall into any ofthese categories – does not alter thefact that poverty in childhood is
closely and consistently associated withmeasurable disadvantage both forindividuals and for the societies inwhich they live.i
A commitment to protecting children
from poverty is therefore more thana slogan or a routine inclusion in apolitical manifesto; it is the hallmark
of a civilized society.

Box 1 Children and recession

There are almost no internationally comparable data on
what is happening to child poverty as a result of theeconomic downturn of the last three years.
It is nonetheless evident that front-line services forfamilies are everywhere under strain as austerity
measures increase the numbers in need while depletingthe services available. It is also clear that the worst is
yet to come. Many families, even those on low incomes,
have some form of ‘cushion’ – whether in the form ofsavings, assets, or help from other family members – bywhich to maintain spending during difficult times. Thereis therefore almost always a time lag between the onsetof an economic crisis and the full extent of its impact.
Commitment
In Ireland, a leader in both the theory and practice ofmonitoring child poverty, some data are available toestimate the effects on children and families of asevere contraction in the national economy. Between
2009 and 2010, for example, Ireland’s own childdeprivation index showed a rise of almost 7 percentage
points, from 23.5% to 30.2%.1 Over the same period,
falling median incomes meant that relative child povertyrose by less than one percentage point – again showing
the value of using the two different measures
discussed in this report.

1 0

The possible impact of the economic downturn on
efforts to reduce child poverty rates has also recently
been estimated for the United Kingdom, where theChild Poverty Act of 2010 has set legally binding targets
for reducing child poverty. By 2020, the relative childpoverty rate is to be halved to no more than 10%.
(‘Absolute income poverty‘ – defined as living on
an income below 60% of the median income forthe benchmark year 2010 and updated only for inflation– is to be cut from 20% to 5%.)
But as the Act came into force, the economic crisis
was already beginning to threaten social protection
programmes. Child benefits, for example, have beenfrozen for three years – meaning that in real terms
they will fall in value. Child tax credits and otherprogrammes designed to protect the poorest children
have been cut back.
What difference are such changes likely to maketo the UK’s long-term efforts to bring down childpoverty rates?
ReversalAccording to an October 2011 report from the Institutefor Fiscal Studies (IFS),2 the likeliest prospect is that the
progress of recent years will be thrown into reverse.
Although currently thought to be stable, the childpoverty rate is predicted to begin rising again in 2013.

5

In practice, making good on thiscommitment is impossible without
close monitoring of what is happening
to children’s lives. It is monitoring thatmakes possible evidence-based policy,
political accountability, informed
advocacy and the cost-effective use oflimited public resources. The
availability of timely data is therefore
in itself an indicator of whether thecommitment to protecting children isbeing taken seriously or not.

reveal a crisis of monitoring. In bothcases the data they present, although
the latest available, are mostly drawn
from surveys conducted in 2009. They
are therefore at least two to three years
old.* This would be bad enough at thebest of times. But these are not the bestof times. And it is a significant failing,
on behalf of many governments ofOECD countries, that the available dataon children’s lives do not yet reflect the
impact of the economic downturn(see Box 1: Children and recession).

The two league tables, Figures 1a and1b, therefore reveal more than thepercentages of children living indifferent kinds of poverty. They also

Underlying weak monitoring is thelack of any robust public or politicalconsensus on how child poverty
should be defined and measured.

26
24

Predicted

22
20
18
16
14

Target

12

2020

2018

2016

2014

2012

10
2002

Since these forecasts were made, the commitment toincrease child credits by more than the rate of inflation in2012 and 2013 has been abandoned. According to IFS
calculations, this decision alone is likely to mean that
another 100,000 children will fall below the relative
poverty line.

28

2000

Such forecasts, says the IFS, are “always highly
uncertain.” In particular, they cannot accurately predict
the impact of, and responses to, the tax and benefitchanges currently in the pipeline. They are nonethelessthe best available independent estimate of “what might
happen to poverty under current government policies.”

Many of the questions and confusions
about the measurement of childpoverty are encompassed by the two
league tables with which this reportbegins. It may therefore be helpful tosummarize the principal differences
between them.

Relative child poverty rate,
United Kingdom, 1998–2020

1998

Looking further ahead, levels of ‘relative’ and ‘absolute’
child poverty are expected to reach 24% and 23%
respectively by 2020/21 – compared to the target figuresof 10% and 5%. This would mean a return to the relative
child poverty levels of two decades ago.

“The discourse on poverty is very confusing,”says Jonathan Bradshaw, Professor ofSocial Policy at the University of Yorkand one of the authors of the statisticalanalysis on which this report draws:ii“We tend to mix up concepts and measuresand use different words to describe the samething and the same words to describe
different things.” iii2010

A crisis of monitoring

1 0

2008

C a r d2006

R e p o r t

2004

I n n o c e n t i

Source: Data from the Institute for Fiscal Studies, London, October 2011. The graph shows
the percentage of children living in households below 60% of equivalized median income
before housing costs. For illustrative purposes, the 'Target' line assumes linear progress
towards the 2020 goal.

1 Central Statistics Office Ireland, Government of Ireland, 2011.
2 B
 rewer, M., J. Browne and R. Joyce (2011). Child and Working-age

Poverty from 2010 to 2020, Institute for Fiscal Studies, London.

* EU-SILC 2009: data on income refers to 2008, other data to 2009. Poverty data was released in early 2010.

6

I n n o c e n t i

A deprivation index
Figure 1a, a League Table of Child
Deprivation, represents a significant
new development in the international
monitoring of child poverty. For the
first time, the European Union Statistics
on Income and Living Conditions,sampling more than 125,000
households in 29 European countries,
has included a section on the lives ofchildren aged 1 to 16. Using this data,
the UNICEF Innocenti ResearchCentre has constructed the 14-item
Child Deprivation Index on which
League Table 1a is based.

Three meals a day

2.

At least one meal a day withmeat, chicken or fish (or avegetarian equivalent)

3.

Fresh fruit and vegetables
every day4.

Books suitable for the child’s
age and knowledge level(not including schoolbooks)

Outdoor leisure equipment(bicycle, roller-skates, etc.)

6.

Regular leisure activities(swimming, playing an
instrument, participating in youth
organizations etc.)

7.

Indoor games (at least one per
child, including educational baby
toys, building blocks, board
games, computer games etc.)

8.

Money to participate in school
trips and events

9.

A quiet place with enough roomand light to do homework

C a r dThe second most obvious feature of
the table is that the highest rates ofdeprivation are to be found in someof the newest and poorest member
countries of the European Union.
Over 30% are seen to be deprived in
Hungary and Latvia, over 50% in
Bulgaria and over 70% in Romania.
For Central and Eastern European
countries, therefore, the league table ofchild deprivation makes grim reading.

11. Some new clothes (i.e. not all

Among the richest 15 countries, all
except France and Italy have childdeprivation rates below 10%. But
clearing a bar that is set so low does
not warrant any great applause. In
the world’s wealthiest nations the
proportion of children lacking two
or more of these basic items should
be at or close to zero. Yet in practice
only Denmark, Finland, Iceland, theNetherlands, Norway and Sweden havesecond-hand)
12. Two pairs of properly fitting

shoes (including at least one pairof all-weather shoes)
13. The opportunity, from time totime, to invite friends home toplay and eat
14. The opportunity to celebrate

special occasions such as birthdays,
name days, religious events etc.

Fig. 2a Percentage of children deprived in countries with

Fig. 2b Percentage of children deprived in countries with

GDP per capita between $13,000 – $25,000 (PPP)GDP per capita between $25,000 – $36,000 (PPP)
30

80

27.4

72.6
70
60

1 0

Overall, the league table shows thatapproximately 85% of the almost
85 million children (aged 1 to 16) in
29 European countries have at least 13of the 14 items in the deprivationindex and are therefore ‘not deprived’.

10. An Internet connection

The 14 items in the index
encompass the ability ofhouseholds to afford:
1.

5.

R e p o r t

2556.6% Children deprived

40
31.9

31.8
30

17.2
15

13.3
10.1

10
19.8

20

20.9

8.8

19.2

8.3
7.0

8.1
5.5

12.4
8.9

10

5
2.5

(per capita GDP in parentheses)

Finland($35,254)($35,145)

United Kingdom

France($33,349)

Italy($32,413)

Spain($32,262)

Cyprus($30,728)

Greece($29,303)

Slovenia($27,556)($25,572)

Czech Republic

PortugalMalta($24,804)

Slovakia($22,875)

Hungary($20,275)

Estonia($19,690)

Poland($18,925)($17,059)

Lithuania

Latvia($14,216)

Romania

Bulgaria($16,166)(per capita GDP in parentheses)($25,058)00($13,764)% Children deprived

20
50

I n n o c e n t i

R e p o r t

C a r d1 0

7

Relative poverty league

child deprivation rates below 3%. For
Austria, Belgium and Germany, the rate
climbs to 8% or more. In France and
Italy the rate rises above the 10% mark.

The second of the two league tables(Figure 1b) paints a very different
picture of child poverty in the world’s
advanced economies.

More with less

It includes six OECD countries that
do not participate in EU-SILC(Australia, Canada, Japan,
New Zealand, Switzerland and theUnited States), and is based on thedefinition of relative poverty used by
the OECD. Under this definition, achild is deemed to be living in relative
poverty if he or she is growing up in ahousehold where disposable income,when adjusted for family size andcomposition, is less than 50% of themedian disposable household income
for the country concerned.* By thisstandard, more than 15% of the 200
million children in the 35 countries
listed in Figure 1b are seen to be living
in relative poverty.

Looked at as a whole, the childdeprivation table may therefore seem
to present little more than a blurredreflection of each country’s level of percapita income. But a closer look reveals
that some countries are in factachieving much more – and somemuch less – than their income levels
would predict. Estonia, Hungary and
Poland, for example, have roughly
equivalent per capita incomes but
widely varying rates of childdeprivation (see Figure 2a). Portugal
and the Czech Republic both have percapita incomes of about PPP $25,000,
but Portugal’s child deprivation level isthree times higher (see Figure 2b).
Belgium and Germany have similar
per capita incomes to Denmark andSweden – but child deprivation rates
that are about three and seven times
higher (see Figure 2c).

The top five positions in the league
table are occupied by Iceland, Finland,
Cyprus, the Netherlands and Norway(with Slovenia and Denmark close

GDP per capita between $36,000 – $85,000 (PPP)
10
9.1

8.8

8.7

Controversy
What are we to make of these twovery different pictures of child poverty
in the world’s richest nations?

8
7First, it is important to resist thetemptation to see the two different
views presented in Figures 1a and 1b
as contradictory or mutually exclusive.
Both are valid. Both can inform policy.
And both make it clear that somecountries are doing a much better job
than others at protecting their children
from poverty.

6
4.9

5

4.4

4
3

2.7

2.6

1.9

2

1.3
0.9

1

(per capita GDP in parentheses)($84,766)

Luxembourg

Norway($55,717)($40,796)

Netherlands

Ireland($39,643)

Austria($38,804)($37,672)

Denmark

Sweden($37,157)

Iceland($36,733)($36,320)

Germany

Belgium

0($36,279)% Children deprived

Overall, the divide between thewealthy and not-so-wealthy nations ismuch less clear-cut. Hungary, Slovakia
and Estonia, for example, are seen tohave a smaller proportion of children
living in relative poverty than the
United Kingdom, Italy, Spain, or theUnited States. Clearly, this is not
because a smaller proportion of theirchildren are poor in an absolute sense;
it is because the incomes of most poor
households in these former centrallyplanned economies do not fall as far
behind the median level of income forthe nation as a whole.
Finally, it is worth noting that – despite
the very different measures of child poverty
employed in these two league tables – sevencountries are ranked in the top 10 in both
– Cyprus, Denmark, Finland, Iceland,
the Netherlands, Norway and Sweden.

Fig. 2c Percentage of children deprived in countries with

9behind). All of these countries haverelative child poverty rates below 7%.
Another eight countries including twoof the largest – Germany and France –have rates between 7% and 10%. A thirdgroup, including Australia, Canada,
New Zealand and the United Kingdom,
post rates of between 10% and 15%.
A further six, including populous Italy
and Spain, show rates of between 15%
and 20%. In only two countries are
more than 20% of children living in
relative poverty – Romania and theUnited States.

Note: Data refer tochildren aged 1 to 16.
Sources: Calculations
based on EU-SILC 2009
for child deprivation andon World Development
Indicators (2011) for GDP
per capita, PPP (current
international $).

* Most European Union countries draw the relative

poverty line at 60% of national median income. For
purposes of international comparison, the OECD (andthis Report Card series) uses a relative poverty line
drawn at 50% of median income.

8

The two measures are, however,profoundly different in concept.
The most important difference between
them is that the child deprivation table
uses a fixed measure for all 29 countries
surveyed; the criterion applied (lacking
two or more from the same list of 14
items) is exactly the same for Swedenor the United States as it is for Bulgaria
or Romania. Inevitably, therefore, it
puts the emphasis on the differences
between richer and poorer countries.
The criterion used to measure relative
child poverty, by contrast, changes withthe median income of each country; ittherefore transfers the emphasis to thegap between the bottom and the
middle in the living standards ofchildren within each country.
It is because of this difference that thepoorer countries in Figure 1a tend tohave significantly higher rates of childdeprivation but may or may not havehigher rates of relative income poverty.
For the same reason, the two different
measures tend to respond to economic
and policy changes in very different
ways.iv In periods of sustained
economic growth, for example, theproportion of a nation’s children
defined as ‘deprived’ will almost
certainly fall as overall incomes rise.
The proportion living in relative income
poverty, on the other hand, may either
rise or fall depending upon whether
their household incomes grow by moreor less than the median income for thenation concerned. To take a famous
example, a decade of sustained
economic growth in the Ireland of the
1990s more than doubled the nation’s
median income, but the proportion ofchildren living in relative poverty alsorose because the incomes of households
below the poverty line rose more
slowly than the median income for thecountry as a whole.
Such examples bring us to the heartof one of the principal controversies
surrounding the measurement ofchild poverty.

I n n o c e n t i‘Real’ poverty
It is often argued that relative poverty
isn’t ‘real poverty’. Real poverty, it issaid, means lacking basics - enoughfood to eat, adequate clothing, a dry
home, an indoor toilet, hot water, anda bed to sleep in. Once you leave suchbasics behind and start drawing
poverty lines based on statistical
notions like median income, it isargued, you end up with results thatfail to make intuitive sense and so
fail to convince either politicians or
public. Can the child poverty rate
really be said to be rising, for example,
at a time when the incomes of thepoor are also rising? And can there
really be more children in poverty
in the United Kingdom or theUnited States than in Hungary or
Lithuania (as shown in Figure 1b)?
Or are these findings just statisticalartefacts produced by a definition ofchild poverty that is in effect basedon a concern not with poverty butwith inequality?
Such are the arguments that push
many to reject the relative income
measure and to embrace instead the
direct measurement of deprivation.
Does the child have three meals a day?
A few books in the home? And a roofthat doesn’t leak? Isn’t this a much
more intuitive measure, and one thatis more capable of winning public
understanding and support?
Direct measures of outcomes likedeprivation do have advantages overindirect or ‘input’ measures such as
household income (see Box 2: The
problem with incomes). But the trouble
with the argument that deprivation
measures ‘real poverty’, whereas relative
income does not, is that the intuitively
appealing idea on which it rests is thatpoverty should be measured in an
absolute rather than a relative sense.
And from here it is but a short step tothe belief that the deprivation index
presented in Figure 1a is an absolutemeasure whereas the median income
method used for Figure 1b is ‘only’ arelative measure.

R e p o r t

C a r d1 0This is a mistake. Both are relative
measures.
The deprivation index is based on thekind of possessions, services andopportunities that most people would
consider normal for a child growing
up in a wealthy country today. In
other words, it is relative to both timeand place. Twenty years ago, forexample, such a list would not haveincluded an Internet connection. Go
back a little further in time and‘having at least one meal a day withmeat, chicken or fish’ would not havebeen regarded as normal. In fact thelonger the historical view the more
obvious it becomes that poverty is an
essentially relative concept. Anypoverty line intended to represent aminimum acceptable standard of livingin the industrialized world today
implies higher standards of food,clothing, housing, water supply,
sanitation, health care, education,transport and entertainment than wereavailable to even the wealthiest
households of previous eras.
The whole idea of defining childpoverty in an absolute sense therefore
rests on shaky ground. Unless we wish
to argue that the threshold should be
set at the minimum income necessary
for sheer physical survival then there
can in fact be no such thing as an
absolute poverty line.
The real debate, therefore, is notwhether poverty lines should be
absolute or relative, but how and how
often they should be updated to reflectchanges in the living standards ofsociety as a whole. If the decision istaken, for example, to draw an‘absolute’ poverty line at some fixed
point and to update it only for
inflation, then this means that a relative
poverty line is being anchored to anarbitrary point in time. As the years
pass and incomes rise, such a poverty
line is likely to fall further and further
behind the norm for the society andto become less and less useful. This isessentially what has happened over theI n n o c e n t i

R e p o r t

C a r d1 0

9Box 2 The problem with incomes

Relative child poverty rates are usually estimated byassuming that household income is a reasonable guideto the material resources available to the child. But thisassumption is beset by problems.1
Among the concerns:
σσ Data on incomes may not be reliable, especially if

derived from surveys, or if a significant proportion of
the working population is self-employed or employed
in informal work. Under-reporting of earnings varies
from country to country, and tends to be greater
towards the bottom end of the income scale.
σσ Most countries measure household incomes before

housing costs. In practice, a family’s capacity tomeet children’s needs is more likely to be dependent
on income after housing costs (which can varysignificantly within as well as between countries).
σσ Income does not always reflect the real level ofresources available. A family’s economic capacity, its
security and spending power, are based not only onhousehold income at a single point in time but also
on savings and debts, on home ownership and house
values, on previous earnings and future expectations,on the help that may be available from other family
members, and perhaps on the value of homeproduced goods such as food and clothes.
σσ When used to compare child poverty in different

countries, income measures cannot take into accountthe fact that services such as health care and childcare may be subsidised or free in some countries but
not in others. This may make a substantial difference
to real ‘disposable household income’.
σσ Similarly, whether or not education, and particularly

pre-school education, is free or subsidised may makea substantial difference to disposable incomes. In
most advanced economies, primary and secondary
education is usually available free of charge. But earlychildhood education is subsidised to different
degrees in different countries. The same is true oftertiary or college education, which may mean thatparents in some countries must try to put aside
significant sums even when their children are still
young. Both of these factors affect real disposable
incomes to different degrees in different countries.

σσ Income measures cannot reflect the fluctuations inincome experienced by many households (for example
as a result of overtime, bonuses, working shorter
hours, becoming unemployed, or taking retirement).
σσ Calculating a poverty rate from household income

data requires that some method be used to convert
household income into equivalent individual incomes(see Box 3: Do children have incomes?). To achievethis, an ‘equivalence scale’ must be used. But such
scales are not based on any scientific understandingof the different patterns of need in households ofdifferent size.
σσ Household income measures cannot reflect the factthat some families may be much more competentthan others in managing income or in prioritizing
spending (for example by putting children’s needs
first). The child of a high-income household, forexample, will not be counted as poor even if most of
the income is spent on drugs, gambling or alcohol;
conversely a child in a low-income household will becounted as poor even if the parents make enormous
sacrifices to ensure that the child has the sameadvantages and opportunities as his or her peers.
Some or all of these problems combine to introduce
doubts about household incomes as a measure of thereal resources available to the child. And they help to
explain why surveys have sometimes found thatmeasures of household spending do not correspond tomeasures of household incomes. At any given level ofhousehold income, for example, material living
standards tend to vary substantially according towhether they are assessed by incomes or by
expenditures.2 In most advanced economies, householdincomes are easier to monitor than expenditures. But
expenditure measures would in most cases provide amore reliable guide to the real level of resources
available to the household.

1 See for example, Fusco, A., A-C. Guio and E. Marlier (2010).

’Income Poverty and Deprivation in European Countries’, Eurostat
Methodologies and Working Papers, European Commission, Luxembourg.
2 Bradshaw, J. and N. Finch (2003). ‘Overlaps in Dimensions of Poverty’.

Journal of Social Policy, 32 (4): 513-525.

I n n o c e n t i

1 0

last half century in the United States(see Box 10: The United States:
redrawing the line).
The obvious alternative is to update
national poverty lines in such a way as
to track the norms and living standardsof the society. But how often, and by
what method? Should the line be
updated irregularly in an ad hoc way,
subject to political pressures and thecompeting influences of different
interest groups? Or should it be
updated in a regular and systematic way
in order to preserve its relationship with
contemporary living standards? In
which case, setting the poverty line at apercentage of each nation’s medianincome and updating it every year
might, after all, be a strong contender.
This is why the Innocenti Report Card
series, in common with both theEuropean Union and the OECD,
continues to use a child poverty line
based on a percentage of medianhousehold income.

Why, then, is it necessary tocomplicate the picture by adding asecond measure? Why introduce theChild Deprivation Index?

R e p o r t

C a r d1 0

percentage of median income only
works well if the countries being
compared have broadly similar levels
of income and living costs. Otherwise‘relative poverty’ comes to mean very
different living standards in different
countries: a household with 50% of
median income in Bulgaria has an
actual income of 11,400 a year; ahousehold with 50% of medianincome in Norway has an incomeof 117,000 a year.

Relative weakness
The answer is that, for all its strengths,
the relative income measure has two
principal weaknesses.
First, even those who support the
principle of measuring child poverty
in a relative way would concede thathousehold income may not always bea reliable proxy for the real resources
available to the child (see Box 2: The
problem with incomes). It is, at best,
an indirect measure, leaving open thepossibility that children may be
deprived in households that are notincome-poor and not deprived inhouseholds that are income-poor.

One may argue that this doesn’t reallymake any difference – that relative
poverty means ‘relative to one’s own
particular society’ and not to thenorms of some other country. But thisargument is only fully convincing for
the wealthier countries of the OECD
where living on an income below
50% of the median is a plausible
measure of what it is intended tomeasure – the sense of falling so far
behind the norms of one’s society as
to be at risk of social exclusion

Second, when comparing relative
child poverty rates in different
countries, a poverty line drawn at aFig. 3 Poverty lines and median incomes, European countries
140,000

135,000

130,000

125,000

120,000

115,000

110,000

Note: Income figures for non Euro-zone countries are converted using purchasing power parity (PPP) exchange rates.
Sources: Elaboration of 2009 European Union Statistics on Income and Living Conditions data and Eurostat.

NorwayLuxembourg

Denmark

Ireland

IcelandSwedenFinlandNetherlands

FranceAustria

Belgium

Germany

CyprusUnited Kingdom

Italy

Spain

Slovenia

Malta

GreecePortugal

Czech Republic

Estonia

LatviaSlovakia

PolandLithuania

Bulgaria

Hungary0

Romania

15,000I n n o c e n t i

R e p o r t

C a r d(see Box 8: The public view). Life at
50% of median income in poorer
countries like Bulgaria and Romania
may not signify the same level ofdifference, or imply the same degreeof social exclusion, as it does inDenmark or Norway. That said, itshould also be noted that at very low
levels of income even small differences
can make a significant difference toopportunities and living standards.
Since the enlargement of theEuropean Union to 25 countries in2004 and then to 27 countries in
2007, this problem of ‘the meaning of
the median’ has become more pressing.
Cross-national comparisons in theEuropean Union must now span agroup of countries whose annual per
capita incomes range from less than

1 0

1 1

$14,000 to around $85,000. A relative
income poverty line based on 50% of
median incomes will inevitably
struggle to reflect this new diversity.
Figure 3 illustrates the problem. Thisshows, for example, that the 10 richest
countries have poverty lines that are
higher than the median incomes of the
10 poorest countries. This means thatchildren who are below the relative
poverty line in France or Germany
may be significantly better off in actual
living standards than children who areliving at the median income level in
Poland or Portugal.v Or to takeanother example, a child living at therelative poverty line in the Netherlands
has double the income of a childliving at the median income level in acountry like Hungary (Figure 3).

Fig. 4 A league table of relative child poverty, selected OECD countries

0

4.7

Iceland5.3

Finland

6.1

Netherlands

6.1

Norway6.5

Denmark

7.3

Sweden7.3

Austria

8.1

Switzerland

8.4

Ireland8.5

Germany

8.8France10.2

Belgium

10.9

Australia

12.1

United Kingdom

12.3

Luxembourg

13.3

Canada

14.9

Japan

15.9

Italy

17.1

Spain

23.1

USA
5
10
15
20
Child poverty rate (% of children living in households with equivalent income
lower than 50% of the national median)Note: Data refer to children aged 0 to 17.
Sources: Calculations based on EU-SILC 2009, HILDA 2009, SLID 2009, SHP 2009, PSID 2007. Results for Japanare from Cabinet Office, Gender Equality Bureau (2011).

Finally there is the worry thatcomparing relative child poverty rates
on the basis of household incomescannot take into account significant
differences between countries in thecost of living and especially in thecosts of essential goods and services
such as health and child care. An
income of $30,000 in country A,
where such services are free or heavily
subsidized, may imply a very different
standard of living from the same
income in country B where suchitems must be paid for at market rates.
In sum, a relative poverty line drawn at
50% of median income is an attempt todefine a concept of poverty on which
there is widespread agreement inprinciple – a concept which says thatthe poor are those who do not haveaccess to the possessions, amenities,
activities and opportunities that areconsidered normal by most people inthe society in which they live (seeBoxes 6, 8 and 9). But when using thisyardstick to make comparisons between
countries, it is probably better to restrict
the comparison to those generally
wealthier countries where living on
incomes below 50% of median implies
a similar level of risk of social exclusion.
Figure 4, for example, restricts thecomparison of relative child poverty
rates to the 20 OECD countries withannual per capita incomes of morethan $31,000.

Deprivation doubts
These concerns and problems have led
to increasing pressure for the relative
income measure to be supplemented bya more direct measure of child poverty.

25

Within individual economicallyadvanced countries, direct measures ofchild deprivation are sometimes
available. They have been deployed, forexample, in Finland, Germany, Greece,
Ireland, the Netherlands, Sweden, andthe United Kingdom.vi Internationally,
the Child Deprivation Index presented in
Figure 1a is the first attempt to meetthis need. As already noted, it is made

1 2

possible by the decision of theEuropean Union to include a special
section about children’s lives in the
EU-SILC survey (see Box 7: The
European Union: 2020 vision).
At first glance, this alternative sounds
quite straightforward: draw up a list ofitems that most people think of asnecessary for a child and conduct asurvey to find out what proportion of
the child population of each country
lacks each of the items.
In practice, this too has its problems.
First, deprivation statistics gleaned
from surveys may also be unreliable.
What people consider to be necessary
for their children, for example, mayvary with income and aspiration.
Presented with a list of items whichcorresponds to one’s own family
possessions, it is likely that most items
will be judged as ‘necessary’. A list that
includes items that are not affordable,on the other hand, may attract fewer
ticks in the ‘necessary’ box. The
tendency for what is considered
normal to increase with incomes, andto decrease with persistent poverty, hasoften been observed. And it is notdifficult to see how this might affectthe results of surveys about childdeprivation. Parents in poor
households may decide that certain
items are unnecessary because they areembarrassed or ashamed to admit thatthey are unable to provide them.vii
The published survey results may havethe appearance of objective data, butbehind every statistic of childdeprivation is an individual parent
answering a survey question about
whether or not they can afford toallow their child ‘to participate inschool trips and events’, or ‘to invite
friends home to play and eat’, or ‘tohave a quiet place with enough roomand light to do homework’.
Then there is the problem of whatitems should be included in adeprivation index and what
importance should be attached to each.
How do we know that the list reflects
a minimum acceptable standard of

I n n o c e n t iliving for a given group of countries at
a given time? And who should decide?
Should the items be chosen byexperts? Or by opinion polls to findout which items are regarded asnecessary by the population at large?
Or should they be selected (andweighted) by investigating whatpercentage of the population alreadypossesses the items? Giving no‘weighting’ to the individual items is
not a neutral approach – it is a
judgement that all the items on thelist are of equal importance and that
this is true for all of the countries
being compared.

R e p o r t

C a r d1 0

Further, there is the problem of thedifferent needs of different age
groups. A personal computer, forexample, was originally included in alist of necessities proposed by theEuropean Union but subsequently
dropped when it was shown that only
30% of the population considered acomputer to be ‘absolutely necessary’or ‘necessary’.viii If the poll had been
conducted among young people, as
opposed to the population as a whole,
it is reasonable to suppose that amuch higher proportion would havecategorized a computer as a necessity.

Fig. 5 Child poverty rates by different relative poverty lines
Country

poverty line at 50%

poverty line at 40%

poverty line at 60%

Iceland

4.7

1.9

10.1

Finland

5.3

1.5

11.9

Cyprus

6.1

1.8

12.1

Netherlands

6.1

2.9

15.4

Norway

6.1

3.1

11.3

Slovenia

6.3

2.9

11.1

Denmark

6.5

3.6

11.4

Sweden

7.3

3.7

12.7

Austria

7.3

3.2

13.6

Czech Republic

7.4

3.8

13.0

Switzerland

8.1

3.2

17.9

Ireland

8.4

3.5

18.9

Germany

8.5

4.6

14.9

France

8.8

3.7

16.8

Malta

8.9

2.9

20.3

Belgium

10.2

4.1

16.6

Hungary

10.3

3.0

20.6

Australia

10.9

4.3

17.6

Slovakia

11.2

6.6

17.0

New Zealand

11.7

Estonia

11.9

6.1

20.6

United Kingdom

12.1

5.6

20.8

Luxembourg

12.3

4.2

22.4

Canada

13.3

7.3

21.9

Poland

14.5

7.5

22.9

Portugal

14.7

9.6

22.7

Japan

14.9

9.6

20.5

Lithuania

15.4

8.8

24.3

Italy

15.9

9.7

24.2

Greece

16.0

8.1

23.5

Spain

17.1

11.5

23.6

Bulgaria

17.8

12.2

24.4

Latvia

18.8

12.8

25.0

USA

23.1

16.6

31.1

Romania

25.5

17.8

32.3

19.4

Note: The shading in the last three columns indicates whether a country ranks in the top third (light blue), middle third(mid-blue), or bottom third (dark blue) of the relevant league table.
Sources: Calculations based on EU-SILC 2009, HILDA 2009, SLID 2009, SHP 2009, PSID 2007. Results for New Zealandare from Perry (2011) and refer to 2010. Results for Japan are from Cabinet Office, Gender Equality Bureau (2011).

I n n o c e n t i

R e p o r t

C a r dChoosing a threshold

1 0

1 3

First, both the child deprivation
measure and the relative income
measure must confront the questionof where and how the thresholdshould be drawn.

(as in the European Union) or at 50%(as used by the OECD for purposes ofinternational comparison)? By way ofreassurance, Figure 5 shows that there
is little change to the relative childpoverty rankings when the line isdrawn at different percentages of
median income. (It should also beborne in mind that in practice there
may be little difference between life
just below and just above whichever
poverty threshold is chosen.)In the case of relative income poverty,
for example, should the line be drawn
at 60% of median household income

In the case of the deprivation
measure, should the threshold be
set at ‘lacking two or more’ of the

Finally, in this summary of the strengths
and weaknesses of the different
measures used in the two league tablesof child poverty, it should be noted that
there are problems common to both.

Fig. 6 Proportion of children in each country lacking 2, 3, 4 and 5 items or moreon the deprivation index
Country

2+

3+

4+

5+

29 European countries

13.3

9.8

7.4

5.8

Austria

8.7

5.3

3.7

2.4

Belgium

9.1

6.6

4.7

3.1

Bulgaria

56.6

49.2

41.1

36.3

Cyprus

7.0

5.0

3.8

2.1

Czech Republic

8.8

6.1

4.7

3.1

Denmark

2.6

1.5

1.2

0.7

Estonia

12.4

7.7

4.5

3.3

Finland

2.5

0.6

0.2

0.0

France

10.1

6.5

3.9

2.6

Germany

8.8

6.2

3.9

2.8

Greece

17.2

11.7

8.4

6.1

Hungary

31.9

25.1

20.6

16.7

Iceland

0.9

0.3

0.0

0.0

Ireland

4.9

2.5

1.4

0.6

Italy

13.3

10.3

8.3

6.2

Latvia

31.8

25.2

20.7

15.9

Lithuania

19.8

13.8

11.6

10.4

Luxembourg

4.4

3.1

1.7

1.3

Malta

8.9

5.4

3.5

2.5

Netherlands

2.7

1.2

0.6

0.4

Norway

1.9

0.7

0.3

0.1

Poland

20.9

15.3

10.8

8.5

Portugal

27.4

23.0

17.8

13.8

Romania

72.6

62.0

53.8

46.8

Slovakia

19.2

15.2

12.1

10.3

Slovenia

8.3

4.4

2.6

1.5

Spain

8.1

5.3

3.2

2.1

Sweden

1.3

0.7

0.4

0.0

United Kingdom

5.5

2.8

1.7

1.3

Note: Data refer to children aged 1 to 16.
Source: Calculations based on EU-SILC 2009.

14 items in the deprivation index?
Or at ‘three or more’ or ‘four or
more’? For the league table of childdeprivation in this report (Figure 1a),the line is drawn at ‘lacking two or
more’. But this decision is essentially
opportunistic: drawing the line at‘lacking one or more’ would havegiven arbitrary emphasis to just one
item on the list. It would also haveproduced extremely high childdeprivation rates for the poorest EU
countries. Setting the line at ‘lacking
three or more’, on the other hand,
would have produced extremely
low deprivation rates for thewealthier countries.
Secondly, both the deprivation
measure and the relative income
league table tell us what proportion ofeach nation’s children fall below theselected thresholds, but they tell us
nothing about how far below.
In the case of the deprivation measure,the question of ‘how far below’ can inpart be answered by setting a lower
threshold for the Child Deprivation
Index. Figure 6, for example, shows
the proportion of children in eachcountry who lack 2, 3, 4 and 5 ormore of the 14 items.
In the case of the relative child poverty
measure, the question ‘how far are
those below the poverty line allowed
to fall?’ finds an approximate answer inFigure 7 which compares 35 countries
by the depth of their poverty gaps –the difference between the medianincome of households below thepoverty line and the poverty line itself.
The findings of this table will beconsidered under the heading Assessing
government performance (p.19).

Overlaps
Given the strengths and weaknesses ofthese two very different ways ofmeasuring and comparing childpoverty, there is an obvious
temptation to combine them in someway in order to construct a single
overarching measure which would
have the strengths of both and the1 4

weaknesses of neither. It has beensuggested, for example, that a single
measure of child poverty might beconstructed by counting as poor only
those children who are poor underboth definitions – i.e. those who lack
two or more of the items on the
deprivation index and who live inhouseholds where incomes are lessthan 50% of the national median. But
this would be to ignore theunderlying incompatibility – the factthat the deprivation measure is basedon a definition which does not varyacross countries, whereas the relative
income poverty measure is based on adefinition which changes from nation
to nation. To make the two measuresconceptually compatible, it would benecessary to adjust the deprivationindex so that both the list of items it
contains and the threshold chosen
would reflect a standard of living thatis considered normal or necessary ineach individual country. This could bedone, either by surveys to establish
what proportion of the populationconsiders which items to be‘necessary’ (consensus weighting) orby weighting each item according towhat proportion of households ineach country already own or haveaccess to each item (prevalence
weighting). But this procedure would
raise more problems than it solves
while at the same time jettisoning thesimplicity and the intuitive appeal ofthe deprivation index.
When used for international
comparison the two measures are
therefore separate in concept andshould remain so in practice. Both thechild deprivation rate and the relative
child poverty rate are useful topolicymakers, to social scientists, to themedia, and to advocates for child wellbeing. Combining them into acommon measure would be likecombining oil and water, in that thewhole would be less useful than thesum of the parts.
Within individual countries, on theother hand, it may be useful tocombine the two measures by

I n n o c e n t i

focusing on the overlap between them
– asking what percentage of a nation’schildren are both deprived and living
in relative income poverty. Thisapproach, currently used for example
in Austria, Ireland and the United
Kingdom, helps to ease some of theworries surrounding the measurementof poverty by means of householdincomes. As Professors Brian Nolan
and Christopher Whelan, contributors
to the development of Ireland’s official
poverty measure, have written:

R e p o r t

C a r d1 0

“Given two relevant pieces of information
about the household – income anddeprivation – each with limitations fromboth conceptual and measurement
perspectives, incorporating both into themeasurement process is one way to seek toimprove reliability in identifying the poor.” ix
In practice, household income remains
a principal determinant of whether or
not the needs of children are
adequately met. But it is not the only
determinant. Public spending can also

Fig. 7 The poverty gap

0

10.9

Finland

11.8

Hungary

12.8

Iceland

12.9

Ireland

13.6

Australia

14.6

Luxembourg

15.0France16.0

New Zealand

16.1

Austria

16.2

Switzerland

16.3

Malta

17.6

Slovenia

17.8

Belgium

17.9

Cyprus18.4

Netherlands

18.8

United Kingdom

20.3

Estonia

20.6

Czech Republic

20.6

Poland20.7

Greece21.0

Norway21.1

Sweden21.4

Canada22.3

Germany

23.5

Lithuania

27.1

Slovakia

29.8

Italy

29.9

Portugal

31.1

Japan

31.3

Latvia32.0

Bulgaria

32.8

Denmark

33.1

Spain

34.7

Romania

37.5

USA
5

10

15

20

25

30

35

Child poverty gap(gap between the poverty line and the median income of those below the poverty line)
Notes: The poverty gap is the distance between the poverty line and the median income of those below thepoverty line (expressed as a percentage of the poverty line). Calculations are based on a poverty line set at
50% of the national median income. Countries are ranked by increasing levels of the child poverty gap.
Sources: Calculations based on EU-SILC 2009, HILDA 2009, SLID 2009, SHP 2009, PSID 2007. Results for
New Zealand are from Perry (2011) and refer to 2010. Results for Japan are from Cabinet Office, Gender
Equality Bureau (2011).

40

I n n o c e n t i

R e p o r t

C a r dhelp parents to meet children’s needs.
And for this reason it is not axiomaticthat falling household income must
always mean rising levels of childdeprivation. The governments that are
most successful in protecting children
from poverty are likely to be thosethat strive to reduce the number of
low-income households and help toprovide essential goods, services andopportunities for children growing up
in such households. This strategy
makes it possible to offer a significant
degree of protection to children evenin times of economic crisis. And it also
illustrates the usefulness of deploying
both a relative income measure and a
direct measurement of deprivation in
the struggle to monitor and mitigate
the impact of economic forces on the
lives of children.

1 0

1 5

The argument that the use of thisrelative poverty measure may mislead
the public because it inevitably carries
with it a suggestion of ‘absolute
poverty’ is a genuine concern. But thisis a problem not so much in theconcept as in its communication. It
can and should be addressed bysticking strictly to the term ‘relative
child poverty’ when that is what ismeant. To say that ‘child poverty levels’
are higher in the United States than in
the Czech Republic is to invite public

misunderstanding and rejection. To saythat ‘relative child poverty levels’ arehigher risks no such misunderstanding;there is nothing either misleading or
meaningless about the statement that agreater proportion of children are
allowed to fall significantly below thenorms of their societies in the UnitedStates than in the Czech Republic.
When presented for what it is – anapproximate measure not of absolute
poverty but of falling so far behind theBox 3 Do children have incomes?

How should it be done?
How, then, is child poverty best
measured, monitored, and compared?
In previous Report Cards, some basic
principles for the cross-national
monitoring of child poverty have been
proposed. They are summarized andupdated here.
1. Continue to monitor relative
child poverty based on national
median incomesMedian income is “a strong indicator ofwhat is considered normal in contemporarysociety.”x It should therefore continue
to be used as a basis for identifying
those at risk of social exclusion (seeBoxes 4 and 6).
Most countries have data on incomes,
and these data can be used both tocompare countries and to monitorchanges over time. Tracking theincomes of those at the bottom endof the distribution in relation to theincomes of those at the median shows
how the benefits of economic
progress or the pain of economic
recession are being distributed. It is
not a measure of overall inequality inthe society; it is a measure of how thepoorest are faring in relation to thosein the middle.

Most poverty lines are based on household incomes. But to calculate
how many individuals live below the poverty line, household incomesmust be converted to equivalent individual incomes (including‘incomes’ for children).
This cannot be done by simply dividing household income by the
number of people in the household. It may not be true that ‘two canlive as cheaply as one’, but the amount required to maintain a given
standard of living does not rise in direct proportion to the number ofpeople in the home. The cost of heating, or a television or an Internet
connection, for example, does not double if there are four people
rather than two. Many such economies of scale – including being able
to buy food or cleaning materials in bigger quantities – are available tolarger households.
Unfortunately there is no scientific way of converting household income
into individual incomes. Rough and ready methods must therefore beused, of which the most common is the ‘modified OECD equivalence
scale’ by which the first adult in each household is counted as 1.0, thesecond adult as 0.5, and each child under the age of 14 as 0.3. The total
then becomes the number of ‘equivalent individuals’ by which householdincome must be divided. For example, a household with an income of$46,000 for two adults, one 15-year-old, and one pre-school child would
be counted as having the equivalent of 2.3 individuals and their‘equivalized’ individual incomes would be $20,000. It is this figure that isused to establish the median income for the nation as a whole (the point
at which exactly half have more and half have less – see Box 4: The
median is the message). The relative poverty line is then drawn at a
certain percentage of that median. In the European Union, the line isdrawn at 60% of equivalized median income.
The number of children estimated to be living in poverty is thencalculated as the number of individual children living in households inwhich the equivalized income is below this line.

1 6

I n n o c e n t inormal standard of living in the society
as to be excluded from the advantages
and opportunities that the majority
take for granted – the idea of relative
child poverty does make intuitive sense.
2. Measure deprivation directlyChild poverty also needs to bemonitored by direct measurement ofdeprivation. The proportion of children
who lack an adequate diet, or a quiet
place to do homework, or suitablebooks and an Internet connection, isthe kind of measure that allows actual
living standards to be compared acrossnations. It makes immediate sense to awide public and contributes towards amore rounded understanding of childpoverty. And in so doing, it also helps

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to define and defend the simultaneoususe of the relative child poverty rate.xi

advanced economies in the form ofa ‘poverty gap’ league table.

The special module on childdeprivation, included as a one-off
experiment in the latest round of
EU-SILC, should therefore be
developed into a regular andpermanent feature of future surveys.

Ideally, the monitoring of childpoverty would include its timing andduration as well as its breadth anddepth. The earlier the privation andthe longer its duration, the greater the
potential impact on the child. This istrue both because of the inherent
vulnerability of the earliest years oflife and because the longer a family
stays poor the harder it may become
to maintain essential expenditures(as savings and assets run down, forexample, or as borrowing and othersources of help reach their limits).

3. Measure depth and duration

As already noted, it is also important
to measure how far below the poverty
line the poor are being allowed to fall.
For this purpose, the median incomeof those below the poverty line, as apercentage of the poverty line itself, isa useful measure. Figure 7 haspresented this calculation for 35

In other words, child poverty should

Box 4 The median is the message

The words 'average' and 'median' can still cause
confusion in public discourse and even in policy-making.
The difference between the two is illustrated in the
diagram below.
Imagine a street with a single row of houses numbered
1 to 15. The household with the lowest income in thestreet lives at number 1, the second poorest household
lives at number 2, and so on up to the richest householdin number 15.
The average household income is calculated by
dividing the total income of the street by the total
number of households. In the example given here, thiscomes to $60,000.

The median household income is the income of thehousehold in the middle of the income scale – the point
at which half of the households have more and half haveless. In this example, the median income is $40,000 (theincome of house No. 8).
As the example shows, there can be significant
differences between the average and the median.
The two also respond to change in different ways.
Imagine, for example, that the two richest people in thestreet, living in houses Nos. 14 and 15, were to moveout and be replaced by Bill Gates and Warren Buffett. In
this event, the average household income of the street
would rise to several billion dollars. But the median

Total income of all houses $900,000
Number of houses 15

Average household income $60,000

No. 1$10,000

No. 2$12,000

No. 3$14,000

No. 4$16,000

7 houses with lower income

No. 5$27,000

No. 6$30,000

No. 7
No. 8
$35,000 $40,000

No. 9$50,000

No. 10$60,000

Median household income $40,000

No. 11$70,000

No. 12$80,000

No. 13
No. 14
No. 15$100,000 $140,000 $216,000

7 houses with higher income

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C a r dbe monitored in three dimensions –asking not only how many children fall
below national poverty lines but how
far and for how long.
4. Maintain a close monitoring
systemMost governments of economicallyadvanced countries are committed inprinciple to the monitoring of childpoverty and social exclusion. But it
must be said that collecting and making
available the necessary data every few
years is not monitoring. It cannot
adequately inform policy or alert
governments, the media, the public, thechildren’s organizations, or the academic
community to the problems being facedby children whose years of growth and

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1 7

development are happening now.
All OECD countries have the capacity
to track key economic indicators –growth, inflation, unemployment, tradebalances – on a quarterly basis. It istherefore unacceptable that basic
information on what is happening tochildren’s lives should be so out ofdate. Key data on basic aspects of childpoverty and child well-being should
be made available not every four years
but every year.
5. Set time-bound targets andbuild support

Report Card 6 (2005) recommended
that all OECD countries should aim
to reduce relative child poverty rates toincome would stay the same: the middle house in theincome distribution would still be No. 8, and its income
would still be $40,000.
For the same reason, it is quite possible to increase theincomes of all the houses with incomes above themedian (Nos. 9 to 15) without affecting the medianincome of the street as a whole.
It is sometimes said that relative poverty, defined as thepercentage of households below a certain percentage of
median income, can never be abolished because thetarget is always moving. As incomes rise, the poverty
line also rises, and so ‘the poor will always be with us’.
But this is not the case. In the above example, thoseliving in houses 1, 2, 3 and 4 are below the poverty line
because their household incomes are below 50% of themedian for the street as a whole. But if the incomes of
those households were to rise to $20,000 then there
would be no houses with incomes below 50% of
median. Relative poverty would have been abolished.
And the median itself would not have changed.

below 10%. Countries that had alreadyachieved this were challenged toemulate the Nordic countries byreducing the rate still further – to 5%
or less. Since that time, relative childpoverty rates have risen in almost
every OECD country* (an increasethat does not as yet reflect the impactof the post-2008 economic downturn).
As Figure 1b shows, only Iceland now
achieves a relative child poverty rate ofless than 5%, though Finland remains
close at 5.3%. The latest nationallyavailable data suggest that Iceland, too,has allowed its relative child poverty
rate to drift above the 5% mark.
This upward trend in relative childpoverty rates over recent years is in

Illustrating the normal
This distinction between average and median cansometimes be critical. For example, the argument overwhether pay is generally higher in the public or private
sector may well depend on whether the average or the
median is used when making the comparison. If theaverage is chosen, then pay in the private sector may
well be higher – because the average can besubstantially increased by a small number of people
with very high earnings (the equivalent of Gates andBuffet moving into the street). If the median is selected,
on the other hand, then pay in the public sector may behigher – because the median level of pay in the private
sector is not increased by the incomes of those at thevery top of the income distribution.
Many economists now argue that it is the median,rather than average, that should be used to illustrate
what is normal in a given society. Nobel prize-winningeconomist Joseph Stiglitz, for example, points out thatin the United States, “median and average behave
differently…real median household income has actuallydipped since 2000. But G.D.P. per capita has gone up.”1

1 Quoted in ‘The Rise and Fall of the G.D.P.’ by Jon Gertner, New York Times,

13 May 2010.

* The relative child poverty rates published in Report Card 6 are not strictly comparable with the rates given in Report Card 10 (See Figure 1b andBox 3: Do children have incomes?)

1 8large part the result of global economic
trends. But that does not mean that it isinevitable. It is within the power ofevery government in the OECD to set
realistic targets for reducing relative
child poverty and to put in place thepolicies and the monitoring systems
required to meet those targets.xii Figure
1b shows that a realistic target for thecountries with relative child poverty
rates below 10% would be to renew
the struggle to reduce the rate to 5% orlower. Similarly, the 12 countries with
rates between 10% and 15% should aim
at lowering relative child poverty below
10%. The 8 countries currently with
rates of 15% to 25% have the capacity
to bring the rate below the 15% levelas an essential first step.

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Fig. 8 Relative child poverty rates before taxes and transfers (market income) and aftertaxes and transfers (disposable income)before taxes and transfers

after taxes and transfers

Ireland
Hungary
United Kingdom
Finland
Australia
New ZealandAustria
Czech Republic
NorwayFranceSlovenia
Germany

Announcing such targets is of course notenough. It is now more than 20 years,
for example, since the Government of
Canada announced that it would “seek toeliminate child poverty by the year 2000.”
Yet Canada’s child poverty rate is higher
today than when that target was firstannounced.xiii In part this is because
the commitment was not backed by acompelling political and public consensus
or by any firm agreement on how
child poverty should be defined andmonitored. Targets can only be afirst step.
In the past, the European Commission
has done much to help EU countries
to develop common indicators forthe measurement of child poverty andto develop plans for its reduction (seeBox 7: The European Union: 2020
vision). But since the economic crisis
began, child poverty appears to haveslipped down the Commission’s agenda.
Children barely feature, for example, in
the Europe 2020 strategy. In particular,
the Commission appears reluctant topublish cross-national data on falling
government expenditures for children
and families. Later this year (2012), theCommission is due to make proposals
to member states on child well-being.
Those proposals should include targets
for specific reductions in child poverty
by the end of this decade.

C a r dLuxembourg
IcelandMalta
CanadaSwedenBelgium
Netherlands
Denmark
CyprusSlovakia
Lithuania
Estonia
Portugal
Bulgaria
PolandRomania
LatviaSwitzerland
Spain
USA
Japan
Italy
Greece
0

10

20

30

40

50

Child poverty rate(% of children living in households with income lower than 50% of the national median income)Notes: For each country and for both income definitions, poverty calculations are based on a poverty line set at 50% of
the national median disposable income. Countries are ordered by decreasing percentage of poverty reduction achieved.
‘Taxes and transfers’ takes into account all income taxes paid by households and all benefits that directly affect householdincomes (i.e. not including in-kind or near-cash benefits).
Sources: Calculations based on EU-SILC 2009, HILDA 2009, SLID 2009, SHP 2009 and PSID 2007. Results for New Zealandare from Perry (2011) and refer to 2010. Results for Japan are from Cabinet Office, Gender Equality Bureau (2011).

I n n o c e n t i

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1 9

Fig. 8a Child poverty rates before taxes and transfers (market income) and after taxes and transfers, selected countries
before taxes and transfers

after taxes and transfers

25

20

30

25

19.4

20
25.1

17.1

17.5

25.1
23.1

18.8

17.0

17.0

16.2 15.9

15

20

15
15
10

13.3

10

8.5
7.3

8.8

7.4

10

5

5

5

0

0
France

Spain

0
USA

CanadaAustria

Germany

Czech
Republic

Italy

Sources: Calculations based on EU-SILC 2009, SLID 2009 and PSID 2007.

6. Avoid unnecessary complexity

The more complex the measure ofchild poverty, the less useful it is likely
to be.
7. Measure well-being broadlyChild poverty is about more thanincome or the lack of items on a given
list. Children can be poor in love andattention, in parental time and skills, in
relationships and community, in public
services and environmental quality. It istherefore also necessary to continue todevelop ways of monitoring childwell-being in the round.
It was for this reason that Report Card 7(2007) developed an initial measure ofoverall child well-being for OECD
countries. Bringing together a total of
40 indicators for which internationallycomparable data were available, thereport compared child well-being across
21 OECD countries under theheadings of material well-being, healthand safety, education, peer and family
relationships, risk behaviours, and young
people’s own subjective sense of wellbeing. This experiment will be refinedand repeated with new data in the next
issue in this series (Report Card 11).
8. Focus on disparity

In addition to monitoring averagelevels of child well-being, it is also
important to focus specifically on thechildren left behind.

There will always be children who fallbehind the average, whether in material
circumstances or educational
achievement. The critical question is‘how far behind?’ Is there a point
beyond which ‘falling behind’ is notunavoidable but unacceptable? This was
the issue examined in Report Card 9(2010), which offered a practical guideby looking at the gaps – whether inmaterial well-being, or in health or in
educational achievement – between thechildren at the bottom and thechildren at the median point in eachcountry. If, for example, the gap in
educational achievement is significantly
wider in country A than in country B,
then this suggests that young people incountry A are falling further behindthan is necessary. Put positively, thevarying child disparity records ofcountries at similar levels of economic
development offer a real-world
measure of the scope for improvement.

Assessing government
performance
The extent and depth of childdeprivation and relative child poverty
in different countries is the result of acomplex interaction between culturaland historical factors, demographic
trends, labour market conditions, andglobal economic forces. But
government policies and expenditures
are also critical. “Child poverty is not an

inevitable result of global economic pressuresor demographic transitions.” says Jonathan
Bradshaw. “Governments can and do takesteps that are remarkably successful incounteracting child poverty.”xiv
It would therefore also be useful tohave some measure of how successful.
The principal league tables of childpoverty with which this report beganprovide one overview of the record ofdifferent governments in helping
families to protect children from the
sharpest edges of poverty. But theavailable data also allow more specificcomparisons to be made.
Figure 8 presents one such comparison.
Drawing on data from 35 advanced
economies, it shows what the relative
child poverty rate would be if
governments did not intervene withtaxes and transfers (light blue bar). It
then compares this with the actual
relative child poverty rate after all taxes
are deducted and benefits paid (bluebar). The difference may be seen as one
measure of the efforts and effectivenessof different governments in reducing
relative child poverty.
Such a presentation is of course biased
in favour of those countries with highinitial rates of relative child poverty(the higher the starting level, thegreater the scope for reduction).
Nonetheless, it furnishes some striking

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C a r dBox 5 Invisible children
Both measures of child poverty used in this report are
based on household surveys or household income data.
But some of the children and young people most at riskof poverty do not live in households; they live ininstitutions, in children's homes, in temporary
accommodations, in hostels or hospitals, in prisons, inhouses for refugees or asylum seekers, in mobile
homes, or on the streets. It is also possible that some of
the most at-risk children may be not represented inhousehold surveys because they live in remote areas orin families and communities whose presence may beillegal and unregistered.
All of these ‘non-mainstream’ groups are likely to bestatistically invisible.
A notable example are the 4.5 million Roma children
who live in the European Union.
In 2005, 12 governments (6 of them members of theEU) committed to a ‘Decade of Roma Inclusion’.

At the mid-point of the ‘Decade’, a report from theOpen Society Foundations concluded that, “The lack ofdata about Roma communities remains the biggest
obstacle to constructing any thorough assessment of
how governments are meeting their Decadecommitments.” 1
The Czech Republic, Hungary, Slovakia and Spain, forexample, have no data to track even such basic
indicators as infant mortality rates and primary school
completion rates for Roma children. “Withoutcomprehensive data to evaluate government efforts andguide policies,” says the report, “the situation…is likely
to remain dire.” 2

1 McDonald, M. and K. Negrin (2010). ‘No Data – No Progress: Country

findings, data collection in countries participating in the Decade of Roma
Inclusion 2005-2015’, Open Society Foundations, Budapest. Available at:www.soros.org/initiatives/roma
2 Ibid.

Box 6 Relative agreement
The idea of defining poverty in a relative rather than an
absolute sense is not new.

place and time to time. In America as our standard ofliving rises, so does our idea of what is substandard.” 5

In the 18th century, Adam Smith famously argued thatpoverty is the inability to afford, “not only thecommodities which are indispensably necessary for the
support of life, but whatever the custom of the country
renders it indecent for creditable people, even of thelowest order, to be without.”1 A century later, and froma different ideological perspective, Karl Marx foundhimself in agreement, “Our needs and enjoyments
spring from society; we measure them, therefore bysociety and not by the objects of their satisfaction.
Because they are of a social nature, they are of a
relative nature.” 2

By the early 1960s, sociologists and economists like
Victor Fuchs in the United States and Peter Townsend
in the United Kingdom were arguing that governments
should recognise the essentially relative nature ofpoverty by setting national poverty lines at a fixed
percentage of national median income (see Box 9:
The poverty line: a short history).

In 20th-century America, the liberal economist
J. K. Galbraith argued (1958) that, ”People are povertystricken when their income, even if adequate forsurvival, falls markedly behind that of their community.” 3
In the early 1960s, the conservative Rose Friedman,also argued that the definition of poverty changes as
general living standards change; people living at theend of the twentieth century who are labelled poor, shewrote, “will have a higher standard of living than manylabelled not poor today.” 4 Republicans at the timeendorsed the relative idea: ”No objective definition ofpoverty exists,” said a Republican Congressional
response in 1964: “The definition varies from place to

Today, the most commonly used poverty definition in
the developed world is a definition of relative poverty,
and most OECD countries now calculate their headline
poverty rates by the percentage of the population
whose incomes fall below 50% or 60% of national
median income.

1 Adam Smith, An Enquiry into the Nature and Causes of the Wealth of Nations,Book 5, Chapter 2, 1776.
2 Karl Marx, Selected Works, Volume 1, 268-269, Lawrence and Wishart,

London, 1946.
3 Galbraith, J. K. (1958). The Affluent Society, Houghton Mifflin, Boston.
4 Friedman, R. D. (1965). ‘Poverty: Definition and Perspective’, American

Enterprise Institute for Public Policy Research, Washington, D.C.
5 Minority [Republican] views, p. 46 in U.S. Congress, Report of the Joint

Economic Committee on the January 1964 Economic Report of the President
with Minority and Additional Views, US Government Printing Office,Washington, D.C., 1964.

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C a r dcomparisons. It shows for example, that
Canada and the United States begin
with the same level of relative childpoverty (25.1%) but that after taxes andbenefits the relative child poverty rate
in Canada is almost halved whereas in
the United States it remains almost
unchanged (see Figure 8a).

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2 1

Fig. 9 Child poverty rate and overall poverty ratechild poverty

population poverty
CyprusAustralia
FinlandGermany

Within Western Europe, the table also
shows up stark contrasts. Relative childpoverty rates in France and Spain, forexample, begin at very similar levels(19.4% and 18.8%, respectively) but inFrance the rate is more than halved bygovernment intervention whereas inSpain very little difference is made (seeFigure 8a). Similarly, Austria, theCzech Republic, Germany and Italy
all begin with relative child poverty
rates of 16% to 18%; but after taxes
and benefits the relative child poverty
rate is brought down by half or more
in Austria, the Czech Republic andGermany whereas in Italy there isalmost no reduction at all.

NorwayJapan
Denmark
Slovenia
IcelandSwedenLatviaNetherlands
Ireland
Austria
Switzerland
Malta
Estonia

Falling how far?

CanadaFigure 9 offers a different view of therelative performance of governments.
Its premise is that, in a society
committed to providing special
protection for children, the childpoverty rate would be lower than theoverall poverty rate. But judged by arelative poverty measure, Figure 9shows that in only 10 of 35 countries– Cyprus, Australia, Finland, Germany,
Norway, Japan, Denmark, Slovenia,
Iceland and Sweden – is this the case.
Figure 7, showing the depth of relative
child poverty that is tolerated indifferent countries, has already offeredanother kind of overview ofgovernment performance. Asking thequestion: ‘On average, how far below
the poverty line are the poor being
allowed to fall?’ the graph again reveals
significant differences between
countries. In Finland the small
proportion of children (5%) in relative
poverty are living in households whose
incomes fall, on average, about 11%
below the relative poverty line. In the
United States, the much greater
proportion of children (23%) living
below the relative poverty line are seen

United Kingdom
FranceBelgium
Lithuania
New ZealandCzech Republic
Bulgaria
GreeceSpain
United States
Portugal
PolandHungary
Italy
Slovakia
Luxembourg
Romania
0

5

10

15

20

25

Poverty rate
Notes: For each country, poverty calculations are based on a poverty line set at 50% of the national median income.
Countries are ordered by increasing gap between child poverty and overall population poverty (the first ten countries
are those where children are not relatively disadvantaged compared to the overall population in terms of poverty; at thebottom are the countries where poverty is particularly concentrated among children).
Sources: Calculations based on EU-SILC 2009, HILDA 2009, SLID 2009, SHP 2009, PSID 2007. Results for New Zealandare from Perry (2011) and refer to 2010. Results for Japan are from Cabinet Office, Gender Equality Bureau (2011).

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C a r dBox 7 The European Union: 2020 vision

In June 2010, the Heads of State and Government of
all 27 European Union countries called for 20 million
EU citizens to be lifted out of poverty and social
exclusion by the year 2020.
How will this be measured?
To be counted as living in ‘poverty or social exclusion’,an individual must be either ‘at risk of poverty’, or‘deprived’, or ‘living in a jobless household’. In 2010,
an estimated 80 million people in the EU countries fell
into one or more of these three categories, defined
as follows:At risk
A person is considered ‘at risk of poverty’ if he or she
is living in a household with an equivalized income(see Box 3: Do children have incomes?) below 60% of
the national median.
Deprived
A person is considered ‘deprived’ if he or she is unable
to meet four or more of the following nine criteria(note: both the list of essential items, and the thresholdused, are different from the child-specific deprivation
measure used in this Report Card):
σσ can afford to face unexpected expenses
σσ can afford one week holiday away from homeeach year
σσ can pay for arrears of mortgage or rent, utility bills

or hire purchase instalments
σσ can afford a meal with meat, chicken or fish every

second day
σσ can keep the home adequately warm
σσ can afford a washing machine
σσ can afford a colour TV
σσ can afford a telephone

Jobless
A person is considered to be living in a joblesshousehold if no adult is in paid employment or if thehours spent in paid employment amount to less than
20% of the potential number of hours in a normal
working week. By this definition, approximately 40
million of the EU’s 250 million people are currently living
in jobless households.
Of these three measures, the ‘at risk of poverty’
indicator – the percentage below 60% of mediannational income – is considered to be the headline
social exclusion indicator and is the most widely usedmeasure of relative poverty in the European Union.
A place for children
None of the original range of 18 indicators selected by
the European Commission for the purpose of monitoringpoverty paid specific attention to the needs of children.1
But in 2008, a start was made towards monitoring childpoverty. After consultations, a set of indicators specificto the lives of children was included as a special modulein the 2009 round of the European Union Statistics on
Income and Living Conditions (EU-SILC). It is the resultsof this survey that have been drawn on in order toconstruct the 14-item child deprivation index presented
in this Report Card (Figure 1a).
‘Secondary data’ and special modules are included ineach survey on a four-yearly rotating basis; ‘primarydata’ are gathered annually. But as this report argues,
the availability of timely data on child poverty anddeprivation is critical to protecting the growing minds
and bodies of children. Data that is specific to children
should therefore find a permanent, annual place in the
EU-SILC survey – and European Union poverty reduction
targets for 2020 should be revised to include specifictargets for reductions in child poverty.

σσ can afford a car.

By this definition, an estimated 40 million EU citizens
are currently deprived.

1 Notten, G. and K. Roelen (2011). ‘Monitoring child well-being in the European

Union: Measuring cumulative deprivation’, Innocenti Working Paper 2011-03,
UNICEF Innocenti Research Centre, Florence.

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C a r dto fall, on average, almost 38% belowthat line. Children below the relative
poverty line in Japan, Latvia, Bulgaria,
Denmark, Spain and Romania are seen
to be at average income levels that are
below the poverty line by 30% or more.
Figure 7 also throws up some surprises.
Sweden and Denmark are rightly
proud of their traditionally low rates ofchild poverty, but both find themselvesin the bottom half of the league table
when judged by the depth of relative
poverty into which poor children are
allowed to fall. The relative ‘poverty
gap’ for children is greater in Denmark
than in Sweden, greater in Sweden
than in the United Kingdom, greaterin the United Kingdom than in France,and greater in France than in Finland.

Comparing the risks
So far these different ‘windows’ into
government performance haveconcentrated on relative child poverty
based on median household incomes.
But the newly available data on childdeprivation also offer opportunities forcomparison. Specifically, it is possible
to look at each country’s track recordin protecting specific categories ofchildren who are known to be at
greater risk. For example:■■ children in households with ‘low

work intensity’ (as measured by
the employment record of adults in
the household)■■ children whose parents have lowlevels of education■■ children living in single-parent

families■■ children of migrant families.

Figures 10a, 10b, 10c, and 10dtherefore present league tables of adifferent kind – ranking countries by
the protection afforded to some of
their most vulnerable children.
Figure10a ranks countries by theprotection available to children wholive in single-parent households.
Norway, Sweden, Iceland, Finlandand Denmark are seen to achieve thehighest levels of protection, closely
followed by the United Kingdom andIreland. In Belgium, the deprivation

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Box 8 The public view
The most common measure used for estimating and comparing relative
poverty rates in the rich countries is the percentage of the population
living in households where disposable income is below a certain
percentage of the national median. The OECD uses a poverty line set
at 50% of median income.
These thresholds have been criticised for being arbitrary. Why not draw
the line at 40% or at 60%, as in many individual OECD countries (seeFigure 5).
But there is evidence that ‘50% of median income’ corresponds quite
closely to what the majority of people think of as the income level
below which people are ‘in poverty’.
The public perception
In one of the most famous speeches ever made about poverty, forexample, United States President Franklin Roosevelt declared, “I see
one third of the nation ill housed, ill clad, ill nourished.” There was no
explicit mention of relative poverty in this estimate. But whensociologist Donald Hernandez applied a ‘50% of median income’poverty line to contemporary census data he found that the percentageof the population living below this level was 32%.1
A generation later in 1963, President Lyndon Johnson announced his'War on Poverty’ and asked economist Mollie Orshansky to develop thefirst official US poverty line (see Box 10: The United States: re-drawing
the line). Again, the idea that poverty should be defined in relative terms
was not intended, and Orshansky drew the line at a fixed number ofdollars. But Census Bureau data for 1963 show that the ‘Orshansky line’of $3000 for a family or $1500 for an individual corresponded toapproximately 50% of median US income at the time.
In 1974 Lee Rainwater, another leading figure in the history of poverty
studies, brought together a range of public opinion surveys and family
budget studies to show that, at every point since the 1930s, the American
public’s view of the income required to stay above the poverty line hasremained close to 50% of national median income. The United States
General Social Survey for 1993, for example, reported that, on average,
the American public thought that a family of four would be below thepoverty line if its income fell below $17,658 (in 1993 dollars). This turns
out to be 48% of the US median household income for that year.
Across the Atlantic, the United Kingdom’s Joseph Rowntree Foundation
has in recent years asked focus groups drawn from different kinds ofhouseholds to define a minimum acceptable standard of living – basedon need not wants. Advised by experts in health and nutrition, thefocus groups came up with a ‘Minimum Income Standard’ whichtranslates into approximately 60% of today’s UK median income.
It is sometimes argued that the public at large thinks of poverty in an
absolute sense and that the concept of 'relative poverty' is properly
understood only by economists and social scientists. But it is clear
from these examples that the popular definition of poverty is in fact a
relative one.
1 Hernandez, D. J. (1993). America's Children: Resources from family, government, and the economy,

Russell Sage Foundation, New York.

2 4

I n n o c e n t i

Fig. 10a Deprivation rate for children living insingle-parent families

0

10

20

30

40

50

60

C a r d1 0

Fig. 10b Deprivation rate for children living in families
with low parental education
2.5
3.9
5.9
6.5
9.9
11.7
12.0
13.8
15.8
19.2
19.2
19.3
22.6
26.7
27.9
29.4
32.9
34.0
35.6
37.9
50.8
54.7
59.5
61.0
67.6
74.5
83.8
89.6
92.4

NorwaySwedenIcelandFinlandDenmark
United Kingdom
IrelandNetherlands
Spain
Austria
Slovenia
Italy
Belgium
FranceEstonia
Slovakia
Luxembourg
Germany
GreeceCzech Republic
Malta
Lithuania
CyprusPolandPortugal
Hungary
LatviaBulgaria
Romania

4.1
4.3
4.4
6.8
10.1
12.2
13.0
14.9
15.3
16.9
17.3
17.6
20.0
21.5
22.3
23.1
23.4
23.8
24.3
29.7
31.2
32.7
34.3
42.6
46.5
47.3
50.6
76.0
85.4

R e p o r t

70

80

90

0

Finland
Iceland
NorwaySwedenLuxemburg
Denmark
IrelandNetherlands
Malta
Austria
Spain
United Kingdom
CyprusBelgium
Italy
Estonia
Slovenia
FranceGermany
Portugal
GreeceLithuania
Czech Republic
PolandLatviaHungary
Slovakia
Bulgaria
Romania102030

Deprivation rate (%)

40

50

60

70

80

90

100

Deprivation rate (%)

Note: Data refer to children aged 1 to 16.
Source: Calculations based on EU-SILC 2009.

Note: Data refer to children aged 1 to 16.
Source: Calculations based on EU-SILC 2009.

Fig. 10c Deprivation rate for children living in joblessFig. 10d Deprivation rate for children living in migrant families

households (no adult in paid employment)
SwedenUnited Kingdom
NorwayIceland
IrelandNetherlands
Denmark
Finland
Luxembourg
Spain
Italy
Malta
Belgium
Austria
Germany
Slovenia
FrancePolandCzech Republic
Lithuania
CyprusEstonia
LatviaHungary
Portugal
Slovakia
Bulgaria
Romania

11.8
13.3
14.6
17.9
19.4
20.1
23.2
26.2
29.3
33.5
34.3
38.1
40.4
40.7
42.2
43.6
45.6
46.8
50.0
51.0
54.1
55.5
60.8
64.4
73.6
78.8
85.2
95.8
0

10

20

30

40

50

60

70

80

90

Deprivation rate (%)
Notes: Data refer to children aged 1 to 16. Greece has been omitted
from this table because of the small sample size for the relevant population.
Source: Calculations based on EU-SILC 2009.

100

Sweden

2.7

0

3.1

Ireland

3.4

Norway3.6

Iceland

5.0

Luxembourg

7.4

United Kingdom

7.8

Netherlands

7.9

Denmark

10.1

Malta

11.8

Finland

14.4

Cyprus

15.5

Slovenia

16.6

Estonia

16.7

Germany

17.9

Austria

18.8

Czech Republic

19.4

Spain

19.6

Belgium

20.5

France

23.7

Italy

28.9

Latvia31.5

Lithuania

33.6

Portugal

42.2

Greece
5

10

15

20

25

30

35

40

45

Deprivation rate (%)
Notes: ‘Migrant families’ means that at least one parent is foreign-born. Estimatesare based on the 2009 EU-SILC and may differ from estimates drawn from national
census data or other surveys. Data refer to children aged 1 to 16. Bulgaria, Hungary,
Poland, Romania and Slovakia have been omitted from this table because of thesmall sample size for the relevant population.
Source: Calculations based on EU-SILC 2009.

I n n o c e n t i

R e p o r t

C a r dlevel among children in single-parent
families is approximately double thatof Denmark. Levels in Luxembourg,
Germany and Greece are almost
double that of the United Kingdom.
Figure 10b shows the deprivation rate
for children whose parents have a low
level of education. Again, Finland,
Iceland, Norway and Sweden have thebest protection record, though in adifferent rank order. And again, large
differences emerge. For example, abouta third of French children who areliving in families with low parental
education are deprived, as opposed toconsiderably fewer than 10% in most
Nordic countries.

1 0

2 5

Figure 10c lists countries by thedeprivation level for children who live
in households with no employed adult.
Unsurprisingly, unemployment
increases the risk of child deprivationin all countries; but again the variation
between countries is considerable.
Sweden, the United Kingdom and
Norway top the table with deprivation
rates of under 15% for children in‘jobless households’ – as opposed torates around the 40% mark for such
wealthy countries as Belgium, Austria,
Germany and France.
Figure 10d compares deprivationlevels for a fourth vulnerable group –children living in migrant families.

Because children of migrant families
may be undocumented and therefore
statistically invisible, and because theproportion, composition andbackground of migrant families varyfrom nation to nation, this analysis
must be treated with care. But thetable again shows the same group ofcountries (with the addition of
Ireland) holding positions at or near
the top of the protection league. In
Sweden, Ireland, Norway and Iceland,
fewer than 5% of children in migrantfamilies are deprived. In France and
Italy the proportion is more than 20%(and in a further four countries morethan 25%).

Fig. 10e Child deprivation rates in at-risk groups
Country

Deprivation rate
for children
lacking 2 or more
items

Deprivation rate
for children
living in single
parent families

Deprivation rate forchildren living in families
with low parental
education (none, primaryand lower secondary)

Deprivation rate forchildren living injobless households(no adult in paid
employment)

Deprivation rate
for children livingin migrant families

Iceland

0.9

4.4

3.9

17.9

3.6

Sweden

1.3

4.3

6.5

11.8

2.7

Norway

1.9

4.1

5.9

14.6

3.4

Finland

2.5

6.8

2.5

26.2

11.8

Denmark

2.6

10.1

11.7

23.2

7.9

Netherlands

2.7

14.9

13.8

20.1

7.8

Luxembourg

4.4

23.4

9.9

29.3

5.0

Ireland

4.9

13.0

12.0

19.4

3.1

United Kingdom

5.5

12.2

19.3

13.3

7.4

Cyprus

7.0

34.3

22.6

54.1

14.4

Spain

8.1

15.3

19.2

33.5

19.4

Slovenia

8.3

17.3

32.9

43.6

15.5

Austria

8.7

16.9

19.2

40.7

17.9

Czech Republic

8.8

29.7

59.5

50.0

18.8

Germany

8.8

23.8

35.6

42.2

16.7

Malta

8.9

31.2

15.8

38.1

10.1

Belgium

9.1

20.0

26.7

40.4

19.6

France

10.1

21.5

34.0

45.6

20.5

Estonia

12.4

22.3

29.4

55.5

16.6

Italy

13.3

17.6

27.9

34.3

23.7

Greece

17.2

24.3

50.8

Slovakia

19.2

23.1

83.8

78.8

Lithuania

19.8

32.7

54.7

51.0

Poland

20.9

42.6

61.0

46.8

Portugal

27.4

46.5

37.9

73.6

33.6

Latvia

31.8

50.6

67.6

60.8

28.9

Hungary

31.9

47.3

74.5

64.4

Bulgaria

56.6

76.0

89.6

85.2

Romania

72.6

85.4

92.4

95.8

Notes: Data refer to children aged 1 to 16. The shading indicates whether a country ranks in the top third (light blue),
middle third (mid-blue), or bottom third (dark blue) for each of the four risk categories.
Source: Calculations based on EU-SILC 2009.

42.2
31.5

2 6

I n n o c e n t i

Fig. 11 Spending on families and children
cash transfers

tax breaks towards families

R e p o r t

C a r d1 0

Figure 10e brings these four
deprivation tables together to provide
an overview of the protection recordof different nations. It presents aremarkably consistent picture inwhich the same seven countries –Iceland, Sweden, Norway, Finland,
Denmark, the Netherlands andIreland – feature in the top third of
the table no matter which at-risk
category is chosen. Luxembourg andthe United Kingdom feature in the
top third of the table for three of thefour risk categories.

services

FranceUnited Kingdom
SwedenHungary
Denmark
Belgium
Luxembourg
New Zealand
NorwayIcelandNetherlands
Finland
Australia

In addition to what this overview has
to say about the protection offered byindividual countries to particulargroups of at-risk children, the tablealso makes a strong overall statementthat being the child of a single parent,
or of a migrant family, or of parents
who are unemployed or of low
educational level, does not have tomean deprivation. The level of risk
incurred is not a function of chance ornecessity but of policy and priority.

Germany
Ireland
Austria
Czech Republic
Slovakia
CyprusSlovenia
Estonia
Romania
PolandSpain
Switzerland
Italy
CanadaThe level you pay for

PortugalJapan
Bulgaria
United States
Lithuania
LatviaGreece
Malta
0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

Public spending on families in cash transfers, tax breaks and services (as % GDP)
Source: Data for public spending are from the OECD Family Database, around 2007.

Reductions achieved in relative child poverty rates

Fig. 11a Government spending on families and children compared to reductions
achieved in relative child poverty due to taxes and transfers
100
80

IE

60
MT

40

CA
LT

EE

BGPT

20

LV
US JP

0
-20

CZ

SI

CH
ES
IT

CY

SK

AT
DE

FI
AU

NO
IS
NL

NZ
LU
BE

HU

UK
FR

DK SE

PL RO

GR

-40
0.5

1.0

1.5

2.0

2.5

3.0

Government spending on families (as % GDP)
Note: For country abbreviations see page 35.
Source: See Figures 11 and 8.

3.5

4.0

Finally, it is possible to examine thecommitment of governments to theprotection of children by looking at
the overall level of resources they
are prepared to devote to the task.
Figure 11 presents this information in
the form of a league table ranking 35
countries by the percentage of GDP
that each country spends on cashtransfers, tax breaks and services forchildren and families. France, theUnited Kingdom and Sweden head
the table, followed by Hungary,Denmark and Belgium. Each of these
spends twice as a much – as aproportion of GDP – as countries
such as Spain, Switzerland, Italy,
Canada, Portugal, Japan and Bulgaria.
At the bottom of the table are fivecountries spending little more than
1% of GDP on cash benefits, tax
breaks and services for children andfamilies – the United States, Lithuania,
Latvia, Greece and Malta.
Figure 11a compares this level of
spending with the reductions inI n n o c e n t i

R e p o r t

C a r d1 0

relative child poverty that different
governments manage to achieve (seealso Figure 8). How the money isspent can be as important as how
much is spent, but the chart
nonetheless shows a strong relationshipbetween resources expended andresults achieved. In particular, spending
on children and families is running at
well below the OECD average in
Greece, Italy, Japan, Latvia, Spain,
Switzerland, and the United States.
And in all of these countries the lackof priority for children in national
budgets shows through in thecorrespondingly small reductions inrelative child poverty that eachachieves.

physical growth are placed at risk. �But
societies also pay a heavy price – inlower returns on educational
investments, in reduced skills andproductivity, in the increased
likelihood of unemployment andwelfare dependence, in the higher
costs of social protection and judicial
systems, and in the loss of social
cohesion. In the medium term, thesecosts must be met in the hard currencyof the billions of extra dollars spent in
attempting to cope with the wide
range of problems associated with highlevels of child poverty. The economic
argument, in anything but the shortest
term, is therefore heavily on the sideof preventing children from falling
into poverty in the first place.

Conclusion

Even more important is the argumentin principle. Childhood by its nature,and by its very vulnerability, demandsof a civilized society that children
should be the first to be protected
rather than the last to be considered.
This principle of ‘first call’ for children
holds good for governments andnations as well as for the families whobear the primary responsibility forprotection. And because children have
only one opportunity to grow and todevelop normally, the commitment toprotection must be upheld in goodtimes and in bad. It must be absolute,not contingent.

This report has set out the latest
internationally comparable data onchild poverty as measured by rates ofchild deprivation and relative childincome poverty.
The two measures are profoundly
different in concept. Both havestrengths and weaknesses. Taken
together, they offer two different but
complementary measures and offer thebest currently available comparative
picture of child poverty in the world’s
wealthiest nations.
Both measures are also behind thetimes, and the seriousness of this failinghas been exposed by the post-2008
economic downturn. At this critical
moment for low-income families in somany countries, very few have detailed
information on the impact the crisis ishaving on children’s lives. It may ofcourse be argued that in times of crisis
governments have more to worry
about than producing statistics. But
without up-to-date information there
is little possibility of putting in placepolicies that use limited resources incost-effective ways to protect children
from the effects of poverty.
Failure to offer this protection brings
heavy costs. The biggest price is paidby individual children whosesusceptible years of mental and

Nor can this principle of first call beside-stepped by the argument that theprotection of children is an individual
rather than a social responsibility. No
one can seriously claim that it is thechild’s fault if economies turn down or
if parents are unemployed or low-paid.
That is why the league tables showing
the different degrees of protection
provided to at-risk groups should beweighed by politicians, press andpublic. A society that fails to support
parents in the task of protecting theyears of childhood is a society that is
failing its most vulnerable. It is also asociety that is storing up intractablesocial and economic problems for theyears immediately ahead. 

2 7

2 8

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Box 9 The poverty line: a short history

The earliest known attempts to draw an official poverty
line date from 19th-century Britain and were driven by
the need to ensure that children from the poorest
families were not deprived of schooling.1

weekly minimum income for a family of two adults andsix children. This sum, it was stressed, was only for
subsistence and allowed nothing for the ”cheering
luxuries which gladden life.” 5

The United Kingdom’s Elementary Education Act of 1870
sought to put all children aged 5 to 13 in school. But asparents were required to pay a small fee, the Act also
empowered the members of local School Boards towaive payment “in the case of any child when they are of
the opinion that the parents of such a child is unable frompoverty to pay the same.” 2 The Act specifically stated that
this power was to be ”most cautiously and sparingly
used,” but it still left School Boards with a problem:”No machinery that you could possibly invent,” said thechairman of the London School Board in 1887, ”would
enable you to say what each parent is able to pay.” 3

At the turn of the 19th century the systematic study ofpoverty took a major stride forward with the work of
Seebohm Rowntree, scion of the famous Quaker familyof chocolate manufacturers. Published in 1901,
Rowntree's ‘poverty line’ (he was the first to use thephrase) claimed to be ”the first attempt to fix a poverty
line on scientific lines.” Surveying living conditions
among 10,000 working class families in the city of York,he proposed a minimum income level to ensure“adequate nutrition and other essentials.” 6

Nonetheless, local School Boards made theirjudgements as best they could and established what
was in effect a ‘poverty line’ below which school fees
need not be paid. Where that line was drawn varied
from city to city and was usually kept secret ”for fearthat the Board would be cheated.” 4
Other problems faced by 19th-century School Boards
still face social scientists today: should income bemeasured before or after housing costs? What should
be done about irregular or undeclared earnings? Whatadjustments needed to be made for larger families?
(see Boxes 2 and 3).
Booth and Barnett
The School Boards’ struggles were the background to thework of the man generally credited with the invention of
the poverty line – the Victorian philanthropist and glovemanufacturer Charles Booth. In his 1877 speech to theRoyal Statistical Society, Booth presented the findings ofa survey on the incomes of London's poor and suggested
that a 'line of poverty’, set at 18 to 21 shillings a week,
would divide the people of London into those who live ‘in
comfort’ and those who live ‘in poverty’.
At about the same time, the social reformer Henrietta
Barnett was attempting to calculate a minimum cost ofliving using 'dietetic science’. Her clergyman husband
Samuel Barnett drew on her calculations to propose a

Rowntree proceeded to divide those judged ‘poor’(about 25%) into two groups. The first group he defined
as living in ‘primary poverty’ because they simply did
not have enough income to meet their basic needs.
Those in ‘secondary poverty’, on the other hand, were
failing to meet their needs not because their incomes
were too low but because they spent money on nonessential items (beer and tobacco being judged
particularly non-essential).
Such a distinction would not be sustainable today, but
at the time the concept of ‘primary poverty’ represented
a significant shift away from the 19th-century conceptof poverty as a moral failing associated with ‘laziness’,‘fecklessness’, ‘shiftlessness’ and ‘drunkenness’. After
Rowntree, poverty came to be seen more and moreas the result of impersonal economic forces such as
low pay and unemployment in an increasingly
industrialized society.
In his later work, Seebohm Rowntree moved closer toa relative concept of poverty. In his 1936 survey, forexample, a 'sufficient income' encompassed the ability
to buy some items not absolutely necessary for survival,
including newspapers, books, a radio, tobacco, beer,
and a holiday. By the time of Rowntree’s last survey in1951, it was widely believed that poverty in the
United Kingdom was close to being defeated by the
post-war advance of the welfare state. But as absolute
poverty began to recede into history, the idea of
measuring relative poverty was struggling to be born.

I n n o c e n t i

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Tomorrow's necessities
The idea that poverty is essentially a relative concept
and should be measured as such began to gain groundin the 1960s.
In America, the health economist, Victor Fuchs,
proposed that the poverty line be set at one half of themedian income. “Today's comforts and conveniences,”he argued, “are yesterday's luxuries and tomorrow'snecessities.” 7 This proposal has yet to find full
acceptance in the United States (see Box 10: The UnitedStates: redrawing the line).
In the United Kingdom, the case for a relative poverty
line was already being advanced in the late 1950s by
Peter Townsend, Professor of Sociology at the London
School of Economics and a co-founder of the Child
Poverty Action Group. In his 1200-page study 'Poverty in
the United Kingdom' (1979), Townsend abandoned thefixed poverty standards of his predecessors in favour ofa relative definition that has been central to poverty
studies and poverty measurement ever since:“Individuals, families and groups in the population canbe said to be in poverty when they lack the resources toobtain the types of diet, participate in the activities, andhave the living conditions and amenities which arecustomary, or are at least widely encouraged andapproved, in the societies in which they belong.” 8
The influence of Townsend’s formulation was enormous,and is manifest for example in the definition of poverty
adopted by the European Economic Community in 1984
which states that the poor are:“persons, families and groups of persons whose
resources (material, cultural, and social) are so limited
as to exclude them from the minimum acceptable wayof life in the Member State in which they live.” 9
Townsend also pioneered the use of non-monetary
indicators to measure poverty and deprivation. Drawing
up a list of items and opportunities that ‘no one should
be without’, he conducted surveys to find out what
proportion of the population lacked such items.
The Townsend scale has been developed and refined
ever since. For the United Kingdoms’s Breadline

2 9Studies of 1983 and 1990, for example, researchers
Stewart Lansley and Joanna Mack introduced the ideaof “socially perceived necessities” – arguing that at least
half the population should agree that an item was sonecessary that ”no one should be without”.10 Morerecently still, the United Kingdom’s 1999 Poverty andSocial Exclusion Survey attempted to reflect social
norms by weighting each item on the ‘deprivation list’
according to the proportion of the population alreadyowning the item.
In the present century, the European Union has playeda leading role in developing the concepts and statistical
tools for measuring poverty and social exclusion. Three
principal measures – relative poverty, deprivation, andjoblessness – have been chosen to lead the way inmonitoring social exclusion across the 27 EU countries
plus Iceland and Norway (see Box 7: The European
Union: 2020 vision).

1Gillie, A. (1996). ‘The Origin of the Poverty Line’, Economic History Review,
XLIX, 4: 715-730.

2

Ibid.

3

Ibid.

4

Ibid.

5

Ibid.

6

Rowntree, B. S. (2000, Centennial, ed.). Poverty: A Study in Town Life, The
Policy Press, Bristol.

7

Fuchs, V. R. (1967). ‘Redefining Poverty and Redistributing Income’, The Public
Interest 8: 88–95. See also: Hernandez, D. J., N. A. Denton and S. E.
Macartney (2007). ‘Child Poverty in the US: A new family budget approachwith comparison to European countries’, in Wintersberger, H., L. Alanen, T. Olk
and J. Qvortrup (eds). ‘Childhood, Generational Order and the Welfare State:
Exploring Children's Social and Economic Welfare’, Volume 1, COST A19:
Children's Welfare, University Press of Southern Denmark.

8

Townsend, P. (1979). Poverty in the United Kingdom: A survey of household
resources and standards of living, Penguin Books, Harmondsworth.

9Council of the European Communities (1984). 85/8/EEC: Council Decision of
19 December 1984 on specific Community action to combat poverty.

10 Mack, J and S. Lansley (1985). Poor Britain, George Allen & Unwin, London.

See also: Lansley, S. and J. Mack (2011). Review of Kristian Niemietz, A New
Understanding of Poverty, Institute of Economic Affairs.

3 0

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Box 10 The United States: re-drawing the line
The United States is one of the few OECD countries with
an official poverty line – in fact 48 different poverty lines
for different sizes and kinds of households.
Developed as part of President Lyndon Johnson’s ’War
on Poverty’ in the early 1960s, the original US poverty
line was arrived at by assessing the income required toafford the cheapest of four ‘nutritionally adequate’ foodplans1 and multiplying the result by three (following
research in the mid-1950s which showed that the typical
American household spent about one third of its income
on food). This worked out at $3000 a year for families
and $1500 for individuals.
Updated only for inflation, this is the measure that has
officially defined poverty in America for the last 50
years. But because it has been increased only withprices, not incomes, the material standard that it
represents has fallen further and further behind theliving standards of most Americans. In the 1960s, forexample, the poverty line was the equivalent of 50% ofnational median income; by the end of the century it
had fallen to about 30% of median income.2 The current
official US poverty line therefore reflects what wasconsidered to be a minimally acceptable living standard
over half a century ago.
New needs
For more than two decades, social scientists in the
United States have been urging that the official poverty
line should be re-drawn. Most compellingly, revision isneeded to bring the poverty line closer to the realities ofpresent day America where the average proportion offamily income spent on food is now approximately one
eighth rather than one third.3
A new poverty line, it is argued, should also take into
account not just new needs but also new benefits thatgovernments have made available to those on low
incomes. At present, the process of assessing householdincomes takes only cash benefits into account, ignoring
the more than $200 billion a year disbursed bygovernment to poorer households in the form of foodstamps, tax credits and other in-kind benefits. In sum,says Professor Jane Waldfogel of Columbia University,“The official measure no longer corresponds to reality. It
doesn’t get either side of the equation right – how muchthe poor have or how much they need.” 4
Ideally, a revised national poverty line would also reflect
regional differences in the cost of living, especiallyhousing and health care. According to some estimates,for example, the poverty threshold would have to beraised by $3500 a year just to allow for the higher cost ofurban living in a wealthy State like Connecticut.5

New proposals
In 1995, the United States Congress invited the National
Academy of Sciences (NAS) to address these problems.
The overall conclusion of the NAS panel was that,”the current measure needs to be revised: it no longer
provides an accurate picture of the differences in theextent of economic poverty among population groups
or geographic areas of the country, nor an accurate
picture of trends over time.” 6
In making its proposals, the Academy stopped short ofembracing a European-style relative poverty line basedon a percentage of median national income. Instead, it
proposed basing the new poverty line on a budget for
food, clothing, shelter, utilities, and ”a small additionalamount to allow for other needs”. The new measure wasto be relative in the sense that the budget was to be
based on observed spending in the society at large (andupdated every three years), but it tracked only spendingon necessities rather than spending of all kinds. The new
proposals therefore left the door open for those below
the poverty line to fall further and further behind thenormal standard of living in the United States.
Experiments
When NAS-style budgets were drawn up and calculated,the dollar value of the resulting poverty line was seen tocorrespond to about 20% less than half of US medianincome (in 1992). But this was not the whole story.
A radical change was also proposed in the way thathousehold incomes were calculated. First, all non-cash
benefits – such as food stamps, school lunches, andhousing and energy subsidies – were to be included.
Second, ‘non-discretionary expenses’ were also to be
subtracted – including an allowance for child care andsome medical costs and health insurance premiums.
Such changes, said the NAS panel, would provide a more
realistic assessment of 'disposable household income'.
Taken together, they moved the proposed new poverty
line closer to 50% of median income (the exact figure
would depend on how the proposals were implemented).
Following the NAS report, the United States Census
Bureau began tentative experiments with a new poverty
measure that incorporated some of the recommendations(though not the allowance for regional variations in thecost of living).
Slow progress
Meanwhile, the official US poverty line remains unchanged.
In part, this can be put down to the fact that a revision
along the lines of the NAS proposals would substantiallyalter both the number and composition of those deemedI n n o c e n t i

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to be below the poverty line.7 This in turn would affectthe disbursement of billions of dollars in federal funds,
re-write the eligibility rules for particular benefit
programmes, alter the pattern, level and funding forfederal and state programmes, and impact on different
demographic groups in different ways. Add to this thefact that the official poverty line is the responsibility of the
Executive Office of the President and it is evident that any
re-drawing of the line is going to be a high-profile issue
subject to intense institutional and political pressures.
While the debate continues, the United States Census
Bureau has tentatively introduced a Supplemental
Poverty Measure8 to be deployed, as an experiment,alongside the official poverty line.
Running old and new poverty lines side by side might
help to loosen the ideological knot at the heart of thedebate. One of the objections to the NAS proposals isthat they are to some extent based on observed
spending in the society as a whole; they are therefore
seen by some as a step towards a European-style relative
poverty line. To conservatives in the United States, as
elsewhere, the concept of ‘relative poverty’ is a Trojan
horse which, once admitted within the walls, would pourforth the warriors of more progressive taxation.
In the meantime, individual States and programmes
have begun to move forward on their own.9 New York
City's Office of Economic Opportunity, for example, hasalready begun to use NAS-style poverty measures.

3 1

insurance, and good quality early childhood educationand care.
The result of this experiment, when applied to Census
Bureau data for the end of the 1990s, was a US childpoverty rate of approximately 34%. This compares with
the UNICEF estimate for the same period of 21.9%(for relative child poverty based on the percentage
of children in households with below 50% of medianincome).
This approach may overstate the availability of free orsubsidized ‘good quality’ early childhood education andcare in many OECD countries. But the authors believe
their approach can be justified and that it carries theimportant message that child poverty in the UnitedStates is even more out of line with the rest of thedeveloped world than was previously thought:“A poverty measure going beyond the UNICEF approach
to incorporate these costs shows much larger differences
than indicated by the UNICEF measure. The UNICEF
poverty rates for six countries with near universal
maternal/parental leave, preschool and national healthinsurance, range from 2.4% in Denmark to 10.2% in
Germany. The UNICEF measure for the US is at least
double these rates at 21.9%, and the Basic Budget
Poverty Rate taking into account childcare/early educationand health care is three times greater…” 10Comparisons with Europe
In comparing child poverty rates with other developed
countries, even the new Supplemental Poverty Measure
would almost certainly underestimate the level of relative
child poverty in the United States. This is because amajority of OECD countries provide free or subsidized
early childhood care and education, free or subsidized
health care (or health insurance), and significant
subsidies for parental leave. In the United States, suchservices must usually be paid for from ‘disposable
household income’. Like is not therefore being
compared with like.
In 2007, Professor Donald Hernandez, with colleagues
Nancy Denton and Suzanne Macartney, made a proposalthat would allow a more accurate comparison to bemade between child poverty rates in the US and otherdeveloped countries. Using the NAS recommendations
as a guideline, and drawing on research by Washington’s
Economic Policy Institute, the new proposals first
calculate the income needed for ‘Basic Budget Poverty’.
More radically, the proposal then calculates realdisposable household incomes by subtracting
non-discretionary costs such as transport to work, health1Orshansky, M. (1969). ‘How Poverty is Measured’, Monthly Labour Review,Vol. 92 (2): 37-41.

2

Notten, G. and C. de Neubourg (2011). ‘Monitoring Absolute and Relative
Poverty: “Not Enough” is not the same as “Much Less”’, Review of Income
and Wealth, Series 57 (2).

3Couch, K. A. and M. A. Pirog (2010). ‘Poverty Measurement in the U.S.,
Europe, and Developing Countries’, Journal of Policy Analysis andManagement, Vol. 29 (2): 217.

4

‘Bleak Portrait of Poverty is Off the Mark, Experts Say’, New York Times,
3 Nov, 2011.

5

Couch and Pirog (2010), op. cit. p. 219.

6

Citro, C. F. and Robert T. Michael (eds.) (1995). Measuring Poverty:
A new approach. National Academies Press, Washington DC.
Available at www.nap.edu/html/poverty/summary.html

7

Couch and Pirog (2010). op. cit. p. 219.

8

The Research Supplemental Poverty Measure, United States Census Bureau,
November 2011. Available at: www.census.gov/hhes/povmeas/methodology/
supplemental/research/Short_ResearchSPM2010.pdf

9Smeeding, T. M. and J. Waldfogel (2010). ‘Fighting Poverty: Attentive policy
can make a huge difference’, Journal of Policy Analysis and Management,
Vol. 29 (2): 405.

10 Hernandez, D. J., N. A. Denton and S. E. Macartney (2007). ‘Child Poverty

in the US: A new family budget approach with comparison to European
countries’, in Wintersberger, H., L. Alanen, T. Olk and J. Qvortrup (eds).
‘Childhood, Generational Order and the Welfare State: Exploring Children'sSocial and Economic Welfare’, Volume 1, COST A19: Children's Welfare,
University Press of Southern Denmark.

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C a r d1 0Data for Report Card 10: the surveys

The statistical work for Innocenti Report Card 10 is basedon the direct elaboration of household survey microdata
for 33 economically advanced countries. For two
countries, Japan and New Zealand, the statistical results
have been derived from national studies shared by theirrespective authors with the UNICEF research team.

A comprehensive review of EU-SILC can be found in:

Most of the surveys elaborated for this study wereconducted in 2009.

Data on child income poverty have been elaborated
from the following national representative surveys:

European Union

Australia

European Union Statistics on Income and Living
Conditions (EU-SILC)

Household Income and Living Dynamics in Australia(HILDA), 2008 – 2009.

The 2009 round of EU-SILC is the main source of data
used for Report Card 10, providing data on deprivation
and relative poverty among children for the 29 countries
included in this study (all 27 European Union countries,
plus Iceland and Norway).

HILDA is a household panel study which collects
information on income, employment, family life andhousehold composition on an annual basis.

EU-SILC surveys are conducted annually and collectcomparable data on income, poverty, social exclusion andliving conditions from representative samples of privatehouseholds and their current members living in the
territory of the countries at the time of the data collection.
EU-SILC is the main source of data to monitor theindicators by which the European Union has agreed tomeasure its progress toward reducing social exclusion.
The surveys are administrated nationally, with someflexibility in the implementation (the national surveys are
based on a common framework which defines target
variables, and on common guidelines and concepts tomaximize international comparability).
The survey is made up of a core component (samecontent every year) and special modules (which change
annually). The 2009 EU-SILC survey included the special
module on ’Material Deprivation’, including 36 variables.
Many of these new variables were about ‘child material
deprivation’ and covered ‘basic needs’, ‘educational or
leisure needs’ and ‘medical needs’. Many of thevariables included in the 2009 special module have beenused for the analysis of child material deprivation in thisReport Card.
The EU-SILC data on child material deprivation refer tothe year 2009, while those on child poverty refer to 2008
(except for the United Kingdom, which refer to 2009).
More information can be found at:
epp.eurostat.ec.europa.eu/portal/page/portal/
microdata/eu_silc

Atkinson, Anthony B. and Eric Marlier (eds) (2010),
Income and Living Conditions in Europe, Eurostat,
European Commission, Publications Office of theEuropean Union, Luxembourg.

This survey is conducted annually by the Melbourne
Institute of Applied Economic and Social Research(University of Melbourne) and is funded by the AustralianGovernment through the Department of Families,
Housing, Community Services and Indigenous Affairs.
The income data extracted from this survey refer to thefiscal year July 2008 – June 2009.
More information can be found at:www.melbourneinstitute.com/hilda/
CanadaSurvey on Labour and Income Dynamics (SLID), 2009.
SLID is a panel survey run by Statistics Canada. It is thecountry’s primary source for income data, and includes
information on family situation, education anddemographic background. The survey is representativeof all individuals living in Canada, excluding residents of
the Yukon, the Northwest Territories and Nunavut, as
well as residents of institutions and persons living on
Indian reserves. Overall, these exclusions amount to lessthan 3% of Canada’s population.
Report Card 10 uses data from the 2009 round of theSLID, with income poverty data referring to the year 2008.
More information can be found at:www.statcan.gc.ca

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Switzerland
Swiss Household Panel (SHP), 2009.
SHP is a yearly panel study, run by FORS, the Swiss
Foundation for Research in Social Sciences, based at the
University of Lausanne.
The study follows a random sample of households in
Switzerland over time with the aim of observing socialchange, focusing in particular on changing living
conditions.
Report Card 10 uses data from the 2009 round of the
SHP, with income poverty data referring to the year 2008.
More information can be found at:www.swisspanel.ch
United States
Panel Study on Income Dynamics (PSID), 2007.
PSID is a national representative panel study on socioeconomic status and health across generations in the
United States. The PSID, started in 1968, is directed by
the Institute of Social Research at the University ofMichigan and collects data on income, wealth,expenditure, demographics, education, childdevelopment and other topics.
The PSID data used for Report Card 10 are those fromthe 2007 survey, with income poverty data referring to
the year 2006.
More information can be found at:
psidonline.isr.umich.edu/
For the four surveys described above, HILDA, SLID, SHP
and PSID, harmonized household income data havebeen obtained from the Cross National Equivalent File
(CNEF), a project managed by Cornell University. These
data complemented those extracted directly from theoriginal survey.
More information can be found at:
www.human.cornell.edu/pam/research/
centers-programs/german-panel/cnef.cfm

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Additional sources of information on income poverty
Japan, 2010.
The statistics on child income poverty for Japan havebeen taken from:
Cabinet Office, Gender Equality Bureau, Japan (2011),‘The State of Poverty and Gender Gap’, paper presented
at the Working Group on “Women and the Economy”,
Specialist Committee on Basic Issues and Gender Impact
Assessment and Evaluation under the Council for Gender
Equality, Tokyo 20 December 2011.
The data presented in this paper have been elaborated
from the 2010 Comprehensive Survey of Living
Conditions of the Ministry of Health, Labor and Welfare.
The data on income refer to the year 2010.
More information can be found at:www.mhlw.go.jp/english/database/db-hss/cslc-index.html
New Zealand, 2009 – 2010.
The statistics on child income poverty for New Zealandhave been taken from:
Perry, Bryan (2011),‘Household Incomes in New Zealand:
Trends in indicators of inequality and hardship 1982 to2010’, Ministry of Social Development, Wellington,
July 2011.
This paper elaborates microdata from the 2009-2010
Household Economic Survey of Statistics New Zealand.
Income data from this survey refer to 2010.
More information can be found at:www.stats.govt.nz/surveys_and_methods/
our-surveys/hes-resource.aspx

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R E F E R E N C E SCountry abbreviationsi

UNICEF Innocenti Research Centre(2010). ‘The Children Left Behind:A league table of inequality in childwell-being in the world’s rich countries’,
Innocenti Report Card 9, UNICEF IRC,
Florence.
www.unicef-irc.org/publications/619
ii

Bradshaw, J., Y. Chzhen, C. de
Neubourg, G. Main, B. Martorano, and
L. Menchini (2012). ‘Relative Income
Poverty among Children in RichCountries’, Innocenti Working Paper
2012-01, UNICEF Innocenti ResearchCentre, Florence.
www.unicef-irc.org/publications/pdf/
iwp_2012_01.pdf
iii

Bradshaw, J. and E. Mayhew (2010).
’Understanding Extreme Poverty in theEuropean Union’, European Journal ofHomelessness, Vol.4: 174.

iv

Notten, G. and C. de Neubourg (2011).
’Monitoring Absolute and Relative
Poverty: “Not Enough” is not the sameas “Much Less”’, Review of Income and
Wealth, Series 57 (2): 260-265.

v

Bradshaw et al. (2012). op. cit.

vi

Nolan, B. and C. T. Whelan (2010).
’Using Non-Monetary Deprivation
Indicators to Analyse Poverty and Social
Exclusion: Lessons from Europe?’
Journal of Policy Analysis andManagement, vol. 29 (2): 305-325.

vii

Fusco, A., A-C. Guio and E. Marlier(2010). ‘Income Poverty and Deprivationin European Countries’, Eurostat
Methodologies and Working Papers,
European Commission, Luxembourg.
epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-RA-10-030/EN/KS-RA-10-030EN.PDF

viii

Guio, A-C. (2010). ’What Can Be
Learned from Deprivation Indicators in
Europe’, Eurostat Methodologies andWorking Papers, European Commission,
Luxembourg.
epp.eurostat.ec.europa.eu/cache/
ITY_OFFPUB/KS-RA-09-007/EN/
KS-RA-09-007-EN.PDF
ix

Nolan and Whelan (2010) op. cit, pp.
319-321.
x

Lansley, S. and J. Mack (2011).
Review of Kristian Niemietz, ’A New
Understanding of Poverty’, Institute of
Economic Affairs.
www.poverty.ac.uk/sites/default/files/
Review%20Nimietz%2020%20May%20
sl&jm-final.pdf
xi

Bradshaw et al. (2012). op. cit.

xii

Smeeding, T. M. and J. Waldfogel(2010). ’Fighting poverty: Attentive policy
can make a huge difference’, Journalof Policy Analysis and Management,
vol. 29 (2): 401-407.

xiii

Pasma, C. (2010). ’Bearing the Brunt:
How the 2008-2009 Recession Created
Poverty for Canadian Families’, Citizens
for Public Justice, Ottawa.
www.cpj.ca/en/content/bearing-brunt
xiv

Bradshaw, J. (2000). ’Poor Children
in Rich Countries’, Address to Hawke’s
Bay Medical Research Foundation,
New Zealand.

Australia

AU

AustriaAT

BelgiumBE

Bulgaria

BG

CanadaCA

Czech Republic

CZ

CyprusCY

Denmark

DK

Estonia

EE

FinlandFI

FranceFR

GermanyDE

GreeceGR

Hungary

HU

IcelandIS

Ireland

IE

Italy

IT

Japan

JP

LatviaLV

Lithuania

LT

Luxembourg

LU

Malta

MT

Netherlands

NL

New Zealand

NZ

NorwayNO

PolandPL

PortugalPT

RomaniaRO

Slovakia

SK

Slovenia

SI

Spain

ES

SwedenSE

Switzerland

CH

United Kingdom

UK

United States

US

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A cknowledgements

The Report Card 10 project wascoordinated by the UNICEF Office of
Research Innocenti, and assisted bya panel of advisors and reviewers.
Research was completed at the endof December 2011.

UNICEF advisors

The full text and the background papers tothis report can be downloaded from the
UNICEF Innocenti Research Centre
website at www.unicef-irc.org.

External advisors

Research and data analysis
Peter Adamson (independent consultant
to UNICEF Office of Research Innocenti)
Jonathan Bradshaw (University of York)

Gordon Alexander (Director, UNICEF
Office of Research Innocenti)
James Elder (Chief, Communication Unit,
UNICEF Office of Research Innocenti)

Ferran Casas (University of Girona)
Kenneth Couch (University of Connecticut)
Donald Hernandez (City University of
New York)
Gareth Jones (Consultant, UNICEF Officeof Research Innocenti)

Yekaterina Chzhen (University of Oxford)

Robert Joyce (Institute for Fiscal Studies,
London)Gill Main (University of York)

Geranda Notten (University of Ottawa)

Bruno Martorano (UNICEF Office of
Research Innocenti)

Dominic Richardson (Organisation for
Economic Co-operation andDevelopment)

Leonardo Menchini (Chief, Social Policy,
Monitoring and Evaluation, UNICEF Egypt,
formerly UNICEF Office of Research
Innocenti)
Chris de Neubourg (Chief, Social andEconomic Policy Unit, UNICEF Office of
Research Innocenti)
Support in background research
Bethelhem Ketsela Moulat, Ilze Plavgo
and Jan Oliver Suer (UNICEF Office of
Research Innocenti)
Support on individual country data
sources and statistics
Aya Abe (National Institute of Populationand Social Security Research, Japan),
who kindly provided a paper with thestatistical results on child income poverty
for Japan.
Bryan Perry (Ministry of Social
Development, New Zealand), who kindly
provided a paper with the statisticalresults on child income poverty for
New Zealand.
UNICEF National Committees forAustralia, Canada and New Zealandsupported the UNICEF Office of Research
Innocenti in gaining access to the relevant
data sources for their respective
countries.

Keetie Roelen (Institute of Development
Studies, Brighton)
Kitty Stewart (The London School of
Economics and Political Science)

Administrative support at the UNICEF
Office of Research Innocenti was provided
by Cinzia Iusco Bruschi and Laura Meucci.

Previous issues in this series:
Innocenti Report Card 1
A league table of child poverty in rich nations
Innocenti Report Card 2
A league table of child deaths by injury in rich nations
Innocenti Report Card 3
A league table of teenage births in rich nations
Innocenti Report Card 4
A league table of educational disadvantage in rich nations
Innocenti Report Card 5
A league table of child maltreatment deaths in rich nations
Innocenti Report Card 6
Child poverty in rich countries 2005
Innocenti Report Card 7
Child poverty in perspective: An overview of childwell-being in rich countries
Innocenti Report Card 8
The child care transition: A league table of early childhood
education and care in economically advanced countries
Innocenti Report Card 9
The children left behind: A league table of inequality inchild well-being in the world’s rich countries

Graphics: MCC Design, UK (mccdesign.com)
Printed by: ABC Tipografia, Sesto Fiorentino, Florence, Italy

Innocenti Report Card 10, 2012
Measuring Child Poverty
New league tables of child poverty
in the world’s rich countries

UNICEF Innocenti Research Centre
Piazza SS. Annunziata, 1250122 Florence, Italy
Tel: (+39) 055 20 330
Fax: (+39) 055 2033 220
florence@unicef.org
www.unicef-irc.org
ISSN 1605-7317© The United Nations Children’s Fund (UNICEF)
May 2012

ISBN: 978-88-8912-965-4

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