EU-MODA: Poverty and Multiple Overlapping Deprivation Analysis in the EU

Chris de Neubourg Paris, November 2015TIAS School for Business and Society, Tilburg University, SPRI, Brussels, EPRI, Cape Town.

Poverty is usually measured not having enough resources - money

“Poverty is not having the financial resources necessary to support a person at the subsistence level of food, shelter, clothing and other necessities”

(Rowntree, 1901)

• In EU: at risk of poverty: 60% (50%) median national income

EPRI

Monetary poverty measures solve an aggregation and weighting problem

food shelter

clothing

Other necessities

Income needed to pay for this

EPRI

Monetary poverty: as a proxy measure

But what is poverty??

“Poverty is not having the financial resources necessary to support a person at the subsistence level of food, shelter, clothing and other necessities” ?

We can study that by looking at the financial resources to …

But we can also study:

Whether people have enough (adequate) food, shelter, clothing and other necessities

First = monetary povertySecond = deprivations or deprivation poverty

EPRI

5

• Child Poverty Headcount Ratio

• Children in poor households= X% of all children

• It is very common globally, and usual in SSA, for children to be over-represented in poor households

• e.g. Children are 40% of population but 50% of the poor• Consider headcount ratios by household type/composition

Monetary poverty: How do we calculate monetary child poverty?

Monetary poverty: What about child poverty? Why should we focus on child poverty?

• Different because– Basic needs for children are different than those for adults– Children are dependent on others and less mobile, their environment

is especially important– Children do not control income, income may not be spent in ways that

benefit children, must therefore measure their welfare directly

• Important to focus on children because– Poverty can have lasting effects, alter a child’s life forever– Returns to investing in children occur in the future, but policy-makers

can be ‘short-sighted’ and focus on present, ignoring future

Child poverty is probably better measured by deprivation

or at least we need to look at both

aspects: living in a poor family

andnot having what is needed (being

deprived)

Thus we need monetary poverty and deprivation poverty

“Poverty is not having the financial resources necessary to support a person at the subsistence level of food, shelter, clothing and other necessities” ?

We can study that by looking at the financial resources to …

But we can also study:

Whether people have enough (adequate) food, shelter, clothing and other necessities

First = monetary povertySecond = deprivations or deprivation poverty

EPRI

Monetary poverty ≠ deprivation • Missing markets of basic services and goods

• Intra-household differences in needs and ‘says’:– Do not always get their fair share in a household [Intra-household distribution of

wealth (discrimination)]– Children cannot make consumption decisions themselves [Lack of consumer

sovereignty]

• Discrepancy remains an issue even for highly developed economies:– Children’s needs often have a high public good character [Public/private nature of

some goods and services and their pricing]– Having enough money [financial resources] does not always imply access to goods

and services– Not having financial resources does not always imply not having access to goods and

services

EPRI

BelgiumBulgaria

Finland

Monetary poverty (NPL) and deprivation (K=3 or K=4) for all children (0-17 years in Mali

Monetary poverty ≠ deprivation

National

Urban

Rural

BamakoKidal

Gao

Tombouctou

Mopti

Ségou

Sikasso

Koulikoro

Kayes

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

100.0

50.1

15.9

60.5

9.0

73.0

59.0

72.4 69.7

56.051.9

46.749.7

46.4

23.1

53.3

10.516.0

29.132.9

49.1 48.8

85.7

44.5

28.1

Deprived (K=3) Monetary poor

Dep

riva

tion/

pove

rty

rate

in %

In conclusion

• Not everybody who is poor is deprived • Not everybody who is deprived is poor

• They mean different things• They measure different things they may identify different people

EPRI

Conceptual clarity: 3 types of poverty

• MONETARY POVERTY– Poverty measured with reference to a pre-defined

benchmark to minimum necessary income/consumption

• DEPRIVATION (POVERTY)– Poverty measured by missing essential basic needs

• SUBJECTIVE POVERTY– self-assessed poverty/wellbeing/deprivation

WELLBEING

FINANCIAL POVERTY

DEPRIVATIONPOVERTY

SUBJECTIVE POVERTY

EQUITY

Multidimensional Poverty ??

food

shelter clothing

Not having enough resources to pay for shelter, etc.

Other necessities

Defining deprivation: additional challenges

• Define “other necessities”• Select indicators and dimensions (and solve the

aggregation and weighting problems)• Relevance of needs across life-stages: life cycle approach

• Neither loose dimensionality• Nor get lost in dimensions

Other necessities

1. EU-MODA uses a ‘child-centered approach’ 2. EU-MODA adopts a ‘life-cycle approach’ with extensive

attention for overlaps in deprivations and poverty3. EU-MODA builds on existing tools of multidimensional

poverty measurement (Bristol, Oxford OPHI, Marlier & Guio)4. EU-MODA helps to create profiles of deprived children5. EU-MODA supports integrative approach to policy-making

(i.e., integration of sectors)6. EU-MODA integrates monetary poverty analysis and

deprivation analysis

EU-MODA vs. other approaches

EU-MODA: (special case of CC-MODA for low- and middle income countries)

• Data from the EU-SILC 2009: EU-27 plus NO and IS– Child-centred deprivation indicators from the Material Deprivation module– Deprivation is defined as lacking an item because the household cannot afford it or for any other reason

• Four levels of analysis– Single deprivation– Multiple deprivation– Monetary poverty– Multiple deprivation and monetary poverty overlap

• Three age-groups• National and comparative

• Three age groups– Pre-school age– School age – Aged 17-18

• National and international comparative– analyses made for separate countries– comparative analyses between countries or

groups of countries

EU-MODA: Dimensions of deprivation

Below minimum compulsory school age

(excluding those under one)

• Nutrition• Clothing• Early childhood education

and care (ECEC)• Child development• Information• Housing

School age, under 16

• Nutrition• Clothing• Educational resources• Leisure • Social • Information • Housing

Age 17-18

• Clothing• Activity• Leisure and social• Healthcare access • Information • Housing

Age 17-18: no data for BE, CZ, DK, FI, IS, NL, NO, SE, SI, UK due to high incidence of missing values

EU-MODA: Indicators of deprivation• Nutrition

– Fruit/vegetables once a day– One meal with meat once a day

• Clothing – Some new clothes– Two pairs of shoes

• ECEC / Educational resources / Economic activity– Pre-school: at least one hour a week in formal childcare – School age: School trips & Suitable place at home to study– Aged 17-18: Not in education, employment, or training (NEET)

EU-MODA: Indicators of deprivation• Child development / leisure / social

– Pre-school: Books at home; Games (outdoor, indoor); Social activities (celebrations, friends)– School-age:

• Books at home; Games (outdoor, indoor); Social activities; Regular leisure activity – Leisure dimension• Celebrations on special occasions; Having friends round to play – Social dimension

– Aged 17-18: • Social life; regular leisure activity

• Healthcare access (aged 17-18 only)– Unmet medical need– Unmet dental need

• There was at least once occasion during the last 12 months when the person really needed examination or treatment but did not have it for any reason.

EU-MODA: Indicators of deprivation• Information

– Computer – Internet – Mobile phone (aged 17-18 only)

• Housing – Overcrowding (Eurostat definition)– Water and sanitation

• The dwelling lacks at least one of the following: a bath/shower for sole use of the household; an indoor flushing toilet for sole use of the household; hot running water

– Multiple housing problems • The dwelling suffers from at least one of the following: a leaking roof, damp roof/walls/foundation,

rot in window frames or floor; there is not enough day light coming through the windows.

MODA – Multiple Overlapping Deprivation Analysis for children

EPRI

Belgium: headcount by number of simultaneous deprivations; pre-school age

Greeceheadcount by number of simultaneanous deprivations; pre-school age

Belgium Number of deprivations by migrant status; pre-school age

Overlapping deprivation in education, nutrition and clothing: Finland and Romania

The single framework: MODAMultiple Overlapping Deprivation

AnalysisEncompassing:- Single indicator analysis- Single dimension analysis- Multidimensional deprivation counting- Multidimensional overlap analysis- Multidimensional poverty indices and their decomposition- Profiling in single deprivation and dimension analysis- Profiling in multidimensional overlap analysis- Overlap analysis and distributional analysis deprivation – mon. poverty

- Focussed on children in current application but applicable to adults

EPRI

References EU-MODA:Chzhen, Y. (2013), ‘Multiple Overlapping Deprivation Analysis for the European Union (EU-MODA) – Technical Note’, UNICEF Office of Research, Florence, forthcoming.De Neubourg C. and Y. Chzhen, (2013), Monitoring Child Poverty and Well-Being in the European Union – Integrated Overlapping Deprivation and Poverty Analysis’, UNICEF Office of Research, Florence, forthcoming.CC-MODA Technical Note:De Neubourg, C., J. Chai, M. de Milliano, I. Plavgo, Z. Wei (2012), 'Cross-country MODA Study: Multiple Overlapping Deprivation Analysis (MODA) - Technical note', Working Paper 2012-05, UNICEF Office of Research, Florence.Step-by-step guidelines to MODA:De Neubourg, C., J. Chai, M. de Milliano, I. Plavgo, Z. Wei (2012), 'Step-by-Step Guidelines to the Multiple Overlapping Deprivation Analysis (MODA)', Working Paper 2012-10, UNICEF Office of Research, Florence.MODA in the context of multidimensional poverty/deprivation measures:De Neubourg, C., M. de Milliano, I. Plavgo (2013), 'Lost (in) dimensions', Working Paper - forthcoming, UNICEF Office of Research, Florence, forthcoming.MODA the basics:De Neubourg, C., J. Chai, M. de Milliano, I. Plavgo, Z.Wei (2013), ‘The Challenge of Multidimensional Child Deprivation Indicators: Reducing complexity without killing the multidimensionality; progress through Multiple Overlapping Deprivation Analysis (MODA)’, Working Paper – forthcoming, UNICEF Office of Research, Florence, forthcoming.

Web-portal 2009

• www.unicef-irc.org/MODA

www.SPRIglobal.org