deprivations related to long-term unemployment or low labor market participation. A similar situation can be observed for households with no school age children in terms of enrollment in schooling. This analysis therefore assumes that households where there are no values for a specific indicator or dimension are not deprived.

2. Information on some indicators is not collected for certain sub-groups. For instance, households in urban areas do not answer questions on how long it takes them to reach the closest provider of such public services as education and health. Here, the threshold for rural areas is reasonably high and it is assumed that households in Yerevan and other cities would be able to access these services much faster due to agglomeration effects, and consequently are not deprived.

The implications of these working assumptions are that (a) estimates of the share of Armenian households being deprived in a certain indicator or dimension establish a lower bound of deprivations; and (b) the method of dealing with missing data for some sub-groups (in particular urban) may again bias downward the share of the population being deprived.

# 4. Data and Summary Statistics

The previous section outlined the normative foundations for identification of indicators and dimensions that reflect the full experience of poverty in Armenia. This section draws on ILCS data to detail how each indicator was constructed and presents summary statistics for 2015.<sup>4</sup> Each year the ILCS interviews more than 5,000 households; is representative at the regional level (marz level, which corresponds to the NUTS 3 regions<sup>5</sup> ); and provides comparable data starting from the early 2000s. The ILCS asks about education, labor market outcomes, health behavior, and living conditions of households and individuals. It also collects detailed data on consumption behavior and is used to calculate Armenia’s official poverty rate. Since the measure of multidimensional poverty is meant to complement the analysis of consumption poverty, using the same survey instrument is crucial. On the other hand—a serious drawback of using existing rather than new data—constructing the measure on multidimensional poverty is limited by the ILCS information available.

## **Summary Statistics for All Indicators**

The dimension on basic needs captures vulnerability to economic shocks, especially the heavy dependence on remittances, that helps to shape the experience of poverty in Armenia. A large fraction of households across the entire welfare distribution receive money from abroad, and 8 percent of individuals would fall below the extreme poverty line if remittances were removed from their disposable household income (Figure 4). Dependence on remittances is most prevalent in urban areas other than Yerevan, where 11 percent of individuals rely on them to avoid extreme poverty (Figure 5).

> 4 Further information on the construction of each indicator is presented in Annexes 2 and 3. Annex 4 also provides a sample STATA code to replicate the calculations for 2015.

> 5 Marz refers to the first-level administrative entities in Armenia. NUTS refers to the Classification of Territorial Units for Statistics developed by Eurostat.

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