Poverty is defined based on whether per capita household welfare, converted to international dollars using the revised 2011 PPP conversion factors, falls below the $1.90 per day poverty line (Ferreira et al, 2015).<sup>4</sup> We consider all children in poor households to be poor and all children in non-poor households to be non-poor; therefore, as is standard, child poverty is defined as the percentage of children that live in poor households. This assumes all household members enjoy the same standard of living, which as discussed in section four below, may understate the full extent of child poverty.

The face of poverty is young, as children ages 0 and 17 comprise just over half the number of extreme poor in the sample. Given that 767 million persons are estimated to be extremely poor in 2013, our best estimate is that 385 million of them are children. That is, 19.5 percent of all children in the sample are poor, as opposed to 12.5 percent of all persons and 9.2 percent of adults. Poverty rates are 21 percent for 0 to 4 year olds, increase slightly to 21.5 percent among 5 to 9 year olds, and then steadily decline for successively older age groups. The extreme poverty rate for adults is 9.2 percent. We also examine moderate poverty, defined as those living between $1.90 and $3.10 per day. The sum of extreme and moderate poverty rates is substantially higher for children, 44.5 percent live on less than $3.10 per day, as opposed to 26.6 percent of adults.

These results, based on household welfare per capita, immediately raise the fundamental question of how child poverty rates depend on adjustments for differences across households in size and composition.<sup>5</sup> Per capita measures give children the same weight as adults when assessing household needs, and do not allow for larger households to benefit from economies of scale. Relaxing each of these assumptions will lower poverty rates for children relative to adults; the former by mechanically assuming that children require less expenditure to meet their minimum needs, and the latter by reducing poverty rates in larger households, which tend to have more children. Previous research by Batana et al suggested that extreme poverty rates for children in 2000 would fall drastically, from 38 percent to between 3 and 5 percent if different equivalence scales were used in place of the per-capita assumption (Batana et al, 2008).

This apparent sensitivity of child poverty rates to the choice of equivalence scale, however, results from a misleading comparison. The $1.90 per day poverty line is a per capita line derived from the national poverty lines of 15 poor countries, which in turn are each developed using per capita consumption as the welfare measure (Ravallion, Chen, and Sangraula, 2009). When examining the sensitivity of child poverty rates to alternative household equivalence scales, welfare measured in terms of equivalent adults is more meaningfully compared with a poverty line adjusted using the same equivalence scale, based on the composition of a typical poor family (Ravallion, 2015). After adjusting the poverty line accordingly, poverty rates among children are only modestly sensitive to the choice of equivalence scale, and remain substantially higher than adult poverty rates for all reasonable “two parameter” equivalence scales.<sup>6</sup>

> 4 Poverty and extreme poverty are used interchangeably and both refer to welfare, measured in money-metric terms, falling short of the $1.90 line. While poverty is recognized to be multi-dimensional, the use of a money-metric poverty line avoids the severe challenges in aggregating different dimensions of wellbeing into a common index (Thorbecke, 2007).

> 5 There is an extensive literature on the topic of household equivalence scales, but foundational articles include Deaton and Muelbauer (1986), and Pollak and Wales (1979), among many others.

> 6 Two parameter scales are characterized by an alpha that defines the unique scale factor applied to children when calculating adult equivalence, and a theta that adjusts for household economies of scale.

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