# **1. Introduction**

A wealth of evidence indicates that early childhood investments in human capital are critical for improving productivity and living standards. Poor families, however, often cannot afford to make these crucial investments in childhood health, nutrition and education. In part to monitor the extent to which poverty constrains human capital investment, the Sustainable Development Goals place particular emphasis on disaggregating poverty and other measures of welfare by age. This paper does so for children, in the context of the first Sustainable Development Goal, which aims to “By 2030, eradicate extreme poverty for all people everywhere, currently measured as people living on less than $1.90 a day.” How many of the extreme poor population are children and what are their characteristics? Unfortunately global child extreme poverty estimates, unlike global counts, are only calculated and published sporadically. Batana et al (2013), estimate extreme child poverty rates using household survey data from 73 countries, collected between 1992 and 2005. That study estimates that 38.4 percent of children younger than 18 lived on less than $1.25 per day in 2000, as compared with 31.4 percent of people overall. Meanwhile, Olinto et al (2013) use data from 73 countries between 2000 and 2009, to which they apply the prevailing headcount poverty rates for 2010, measured using the 2005 Purchasing Power Parity (PPP) exchange rates. Their analysis finds that children under 18 comprise 47 percent of the poor, and that the poverty rate among children aged 12 and under in the developing world is 32 percent, compared to 19 percent for persons 13 years and older. Evans and Palacios (2015) apply a relative poverty line to a sample of 65 developing countries and find that on average children under 15 comprise 36 percent of the poor. Recent estimates by Watkins and Quattri (2016) were obtained by multiplying, for each country, the fraction of the population that are children times the number of poor, with an adjustment to account for the higher fertility rate among the poor. This yielded an estimate of 409.4 million children living in extreme poverty in 2012, implying that children comprised 45.6 percent of the poor. This figure, which was subsequently published by UNICEF (2016), could underestimate the extent of child poverty, by not fully adjusting for children’s higher poverty rates.<sup>2</sup> Overall, existing estimates vary considerably in their source data and age cut-offs, with corresponding differences in results.

This paper makes two main contributions. First, it presents new estimates of child poverty as of 2013, for a sample of 104 surveys collected since 2009 in 89 developing countries. These estimates define children as those below the age of 18, in accordance with the Convention of The Rights of The Child.<sup>3</sup> These estimates of child poverty are the first estimates calculated using the Global Micro Database (GMD), which adds a set of harmonized household characteristics to the same surveys and welfare measures that are used to produce the poverty estimates published by the World Bank (Castañeda et al 2016). The 89 countries included in the database contain an estimated 84.2 percent of the population in the developing world, and 82.1 percent of the child population. Second, this analysis tests the robustness of age-group poverty rates with respect to different equivalence scales, while appropriately adjusting the poverty line to take into account the composition of families near the poverty line (Ravallion, 2015).

> 2 The fertility adjustment was made on the basis of separate data from Demographic and Health Surveys. See Watkins and Quattri (2016), p.34.

> 3 Convention on the Rights of the Child, Part I, Article 1: “For the purposes of the present Convention, a child means every human being below the age of eighteen years unless under the law applicable to the child, majority is attained earlier.”

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