INTERLOCKING DEFICITS OF TIME AND INCOME

Ajit Zacharias

Levy Economics Institute of Bard College

Prepared for the Global Conference

“Women and Social Inclusion: From Beijing to Post-2015”

May 6—8, 2015, Buenos Aires

Rationale 1: A better measure of income poverty• Official measures assume that people have no time

deficits• Some low-income families do not have the time to perform the

essential tasks of household production that needs to be undertaken to reproduce themselves nor do they have enough money to replace their time deficits with market substitutes

• Because of the neglect of time deficits, official measures • Classify some people who may actually be poor if the monetary

costs of time deficits are taken into account as nonpoor (“hidden poor”)

• Underestimate the income deficit (the difference between the poverty line and income) of poor people incurring time deficits

Rationale 2: A better measure of time deficits

• Most existing measures ignore intra-household disparities in time allocation and define time deficits solely at the household-level• Implies the assumption that time deficit of an individual in the

household is automatically offset by time surplus of another individual in the household

• Not a good assumption given the unequal division of household production tasks within the household, primarily based on gender

• Household-level total of time deficits should be measured by• adding up time deficits of people in the household• not by adding up time deficits and time surpluses of the people in the

household

Our approach• Remedy the difficulties by

• Developing appropriate measures of individual and household time deficits

• Developing an alternative income poverty threshold that is the sum of the official threshold and the monetized value of time deficits

• Combine the two interlinked types of deprivation into a two-dimensional measure of poverty (LIMTIP) to obtain a more accurate profile of poverty

• Implemented by the Levy Institute for: Argentina, Chile and Turkey: 2005/2006; Mexico and Korea: 2008/2009• Under construction: Estimates for Tanzania and Ghana

• Independent estimates: Uruguay (2007 and 2013) and Colombia (2012-2013)

Official vs. Levy poverty rates

Argentina Chile Mexico Korea Turkey0

10

20

30

40

50

60

611

41

3

24

1118

50

8

35

OfficialLevy

Per

cen

t

Estimates of the size of the hidden poverty rate (gap between official and Levy rate) suggest that ignoring time deficits in household production led to a major underestimation of the incidence of poverty in all countries

Unmet income needs: Ratio of adjusted deficits to official deficits

Argentina Chile Mexico Korea Turkey0.0

0.5

1.0

1.5

2.0

2.5

3.0

2.2

2.6

1.7

2.5 2.4

Taking the costs of time deficits of the officially-poor households into account shows that their unmet income needs are about 1.7 to 2.6 times higher than the official measures

Incidence of time poverty by weekly hours of employment and sex (percent), Turkey 2006

Less than 20

21 to 35 36 to 50 51 to 60 61+0

20

40

60

80

100

120

Urban MenRural MenUrban WomenRural Women

Weekly hours of required household production, by weekly hours of employment and sex, Turkey 2006

Me

n

Wo

me

n

Me

n

Wo

me

n

Me

n

Wo

me

n

Me

n

Wo

me

n

Me

n

Wo

me

n

Less than 20 21 to 35 36 to 50 51 to 60 61+

0

5

10

15

20

25

30

35

40

UrbanRural

Median ratio of monetized value of time deficit to earnings, by sex and earnings quintile (percent), Turkey 2006

Bottom Second Middle Fourth Top0

25

50

75

100

125

150

175

200

225

250

Urban Men Urban Women Rural Men Rural Women

Conclusion• Targeting and determination of benefit levels in social

protection and poverty alleviation strategies can be seriously misguided if time deficits are not taken into account

• Addressing time deficits and persistence of “indecent” work• Care systems based on public and community-based provisioning of

care• Rather than private market-based solutions

• Labor market initiatives• Raising minimum wages to “living wages”, enforcing regulation of working

hours, reducing gender disparity in pay, and removing the “care penalty”

• Local public goods provision• Better transportation, access to public services (e.g. water)