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Multidimensional poverty in developed countries: German experiences (Empirical Applications based on SOEP-Data) Peter Krause / Christoph Jindra Workshop on Measuring Human Development June 14, 2013, GIZ, Eschborn, Germany

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Page 1: Multidimensional poverty in developed countries: …hdr.undp.org/sites/default/files/11_mpov_05.pdf · Multidimensional poverty in developed countries: German experiences ... Why

Multidimensional poverty in developed countries:

German experiences (Empirical Applications based on SOEP-Data)

Peter Krause / Christoph Jindra

Workshop on Measuring Human Development

June 14, 2013, GIZ, Eschborn, Germany

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Content

I Motivation Why using multiple poverty measures?

Advantages to conventional income based poverty analyses?

II Database & Methods Database: German Socio-Economic Panel Study (SOEP)

Methods: Multiple Poverty Index (MPI), Alkire/Foster (2011)

Multiple Dimensions (n-items) [level of aggregation]:

HH-Income (2-5/6) [H]

Health (1) [Ind]

Education (1) [Ind]

Work-Intensity (1) [H]

Housing (1) [H]

SWB (1) [Ind]

2

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Content

III Results I – Review on income based poverty analyses [total population, 1984(1995) – 2011]

One-dimensional vs. multi-dimensional approaches

Longterm development, Age profiles (for periods)

Robustness (n-of items/dimensions)

Cardinal Approaches (Multiple FGT-Measures)

IV Results II – Review on income based poverty analyses [respondents population, 1994/5 – 2011]

Six Dimensions: Developments and Age profiles

Weighting (Reducing impact of income on patterns of deprivation)

3

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Content

V Discussion Advantages and shortcomings of multidimensional poverty measures

Tasks for further developments:

Identification: 1st Cutoffs / 2nd cutoffs (absolute/relativ lines; time)

Weighting of dimensions

Aggregation: Correlation based poverty measures

Final Remarks

References

Many thanks to OPHI – Jose Manuel Roche.., Sabina Alkire, a.o.

for sending us a new version of their MPI-Stata-programs!!!

4

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I Motivation

Motivation

Why using multiple poverty measures?

Advantages to conventional income based poverty analyses?

How can we handle multiple deprivation measured at different aggregation levels on different scaling?

Outline Empirical application

Review of conventional income poverty measures

Lonterm development & age profiles

Applications of multi-dimenional poverty measures

5

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II Database & Methods

Database: German Socio-Economic Panel (SOEP)

6

Database Infrastructure for the German Socio-Economic Panel SOEP(core)

•Representative annual longitudinal household survey since 1984 •Regular Inclusion of new subsamples •in 2010: 10.840 households, with 28.436 persons

SOEP-IS (SOEP Innovation Sample)

•Established in 2011 (based on subsamples of SOEPcore) •Inclusion of innovative survey modules, experiments and tests

[SOEP-Pretests]

[SOEP-RS (related studies)]

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II Database & Methods

Methods: Multidimensional Poverty Index (MPI)

7

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II Database & Methods

Methods: Multidimensional Poverty Index (MPI)

8

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II Database & Methods

Methods: Multidimensional Poverty Index (MPI)

9

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II Database & Methods

Methods: Multidimensional Poverty Index (MPI)

10

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II Database & Methods

Methods: Multidimensional Poverty Index (MPI)

11

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III Results I – Income Poverty

Measures for Income related poverty items [Total population] Household-Net-Income, equivalized (rev. OECD-Scale);

price levels of 2010 (sep. adjustments for prices between East and West

till 1998);

Type of Incomes

Monthly Income (Screener)

Annual Income (previous year) Imputed Rent

Annual Income (previous year)

Type of Poverty Definitions

Cutoff: 60%-median of equiv. HH-Net-Income

Current year / anchored in time (lagged income reference level – for absolute impacts on income poverty)

Measures

Head Count [H], FGT

12

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III Results I – Income Poverty

Montly & annual incomes – longterm development of poverty rates

13

5,0

7,5

10,0

12,5

15,0

17,5

20,0

22,5

25,0

1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

percent

pov(H) HH-Inc/month pov(H) HH-Inc/p.year mpov(Hi) HH-Inc(2D)

mpov(MO) HH-Inc (2D/50) mpov(Hu) HH-Inc(2D)

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III Results I – Income Poverty

Montly & annual incomes – longterm development of poverty rates

14

0

5

10

15

20

25

30

35

Age

0

-08

Age

9-1

7

Age

18

-25

Age

26

-34

Age

35

-44

Age

45

-54

Age

55

-64

Age

65

-74

Age

75

+

Age

0

-08

Age

9-1

7

Age

18

-25

Age

26

-34

Age

35

-44

Age

45

-54

Age

55

-64

Age

65

-74

Age

75

+

Age

0

-08

Age

9-1

7

Age

18

-25

Age

26

-34

Age

35

-44

Age

45

-54

Age

55

-64

Age

65

-74

Age

75

+

Age

0

-08

Age

9-1

7

Age

18

-25

Age

26

-34

Age

35

-44

Age

45

-54

Age

55

-64

Age

65

-74

Age

75

+

in percent

hheqr_pov60 m050_per_age h1_per_age h0_per_agemean hheqr_pov60 mean m050_per_age mean h1_per_age mean h0_per_age

1995 - 1999 2000 - 2003 2004 - 2007 2008 - 2011

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III Results I – Income Poverty

Montly & annual incomes – longterm development of poverty rates

15

0

5

10

15

20

25

Ag

e

0-0

8

Ag

e 9

-17

Ag

e 1

8-2

5

Ag

e 2

6-3

4

Ag

e 3

5-4

4

Ag

e 4

5-5

4

Ag

e 5

5-6

4

Ag

e 6

5-7

4

Ag

e 7

5+

Ag

e

0-0

8

Ag

e 9

-17

Ag

e 1

8-2

5

Ag

e 2

6-3

4

Ag

e 3

5-4

4

Ag

e 4

5-5

4

Ag

e 5

5-6

4

Ag

e 6

5-7

4

Ag

e 7

5+

Ag

e

0-0

8

Ag

e 9

-17

Ag

e 1

8-2

5

Ag

e 2

6-3

4

Ag

e 3

5-4

4

Ag

e 4

5-5

4

Ag

e 5

5-6

4

Ag

e 6

5-7

4

Ag

e 7

5+

Ag

e

0-0

8

Ag

e 9

-17

Ag

e 1

8-2

5

Ag

e 2

6-3

4

Ag

e 3

5-4

4

Ag

e 4

5-5

4

Ag

e 5

5-6

4

Ag

e 6

5-7

4

Ag

e 7

5+

in percent

hheqr_pov60 d2m050_per_age d4m050_per_age d6m050_per_age

mean hheqr_pov60 mean d2m050_per_age mean d4m050_per_age mean d6m050_per_age

1995 - 1999 2000 - 2003 2004 - 2007 2008 - 2011

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IV Results II – Multidimensional Poverty

Deprivation Measures: [Respondents, age 18+ ] Income (5) [Household level]:

Monthly Income (Screener) [currrent & anchored in time]

Annual Income (previous year) Imputed Rent [currrent & anchored in time]

Annual Income (previous year) [currrent]

Health (1) [Ind. Level]:

Handicaps in everyday activities & low health atisfaction

Education (1) [Ind. Level]:

Left school without graduation, no vocational training [casmin]

Work-Intensity (1) [Household level]:

No individual in the household working or in education at working age [laeken]

Housing(1) [Household level]:

Less than 20sqm/per>3y | bad condition | missing of sanitary equipment

Subjective Wellbeing (SWB) (1) [Ind. Level]:

Life satisfaction 0-3 [Scale 0-10]

16

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IV Results II – Multidimensional Poverty

Deprivation Measures: 5 Non-Income Dimensions

17

0,0

5,0

10,0

15,0

20,0

25,0

1994 1996 1998 2000 2002 2004 2006 2008 2010

percent

Dep_Health Dep_Educ Dep_WI Dep_Housing Dep_SWB

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IV Results II – Multidimensional Poverty

Deprivation Measures: Income (5) [H] , Resp. 18+

18

0,0

2,5

5,0

7,5

10,0

12,5

15,0

17,5

20,0

22,5

25,0

1994 1996 1998 2000 2002 2004 2006 2008 2010

percent

hheqr_pov60 af_i5m050 af_i5h1 af_i5h0

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IV Results II – Multidimensional Poverty

Deprivation Measures: Income (5) [H]

19

0

5

10

15

20

25

Age 1

8-2

5

Age 2

6-3

4

Age 3

5-4

4

Age 4

5-5

4

Age 5

5-6

4

Age 6

5-7

4

Age 7

5+

Age 1

8-2

5

Age 2

6-3

4

Age 3

5-4

4

Age 4

5-5

4

Ag

e 5

5-6

4

Age 6

5-7

4

Age 7

5+

Age 1

8-2

5

Ag

e 2

6-3

4

Age 3

5-4

4

Age 4

5-5

4

Age 5

5-6

4

Age 6

5-7

4

Age 7

5+

Age 1

8-2

5

Age 2

6-3

4

Age 3

5-4

4

Age 4

5-5

4

Age 5

5-6

4

Age 6

5-7

4

Age 7

5+

in percent

hheqr_pov60 i5m050_per mean hheqr_pov60

1995 - 1999 2000 - 2003 2004 - 2007 2008 - 2011

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IV Results II – Multidimensional Poverty

Deprivation Measures: Health [Ind]

20

0,0

5,0

10,0

15,0

20,0

25,0

30,0

1994 1996 1998 2000 2002 2004 2006 2008 2010

percent

Dep_Health M0-Inc&Health(mc50,w50)

H-Inc&Health(mc1[union]) H-Inc&Health(mc100,[intersection])

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IV Results II – Multidimensional Poverty

Deprivation Measures: Health [Ind]

21

0

5

10

15

20

25

30A

ge

18

-25

Age

26

-34

Age

35

-44

Age

45

-54

Age

55

-64

Age

65

-74

Age

75

+

Age

18

-25

Age

26

-34

Age

35

-44

Age

45

-54

Age

55

-64

Age

65

-74

Age

75

+

Age

18

-25

Age

26

-34

Age

35

-44

Age

45

-54

Age

55

-64

Age

65

-74

Age

75

+

Age

18

-25

Age

26

-34

Age

35

-44

Age

45

-54

Age

55

-64

Age

65

-74

Age

75

+

in percent

Dep_Health_age M0-Inc&Health(mc50,w50)_age Dep_Health_ M0-Inc&Health(mc50,w50)_

1995 - 1999 2000 - 2003 2004 - 2007 2008 - 2011

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IV Results II – Multidimensional Poverty

Deprivation Measures: Education [Ind]

22

0,0

5,0

10,0

15,0

20,0

25,0

30,0

35,0

1994 1996 1998 2000 2002 2004 2006 2008 2010

percent

Dep_Educ M0-Inc&Educ(mc50,w50)

H-Inc&Educ(mc1[union]) H-Inc&Educ(mc100,[intersection])

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IV Results II – Multidimensional Poverty

Deprivation Measures: Education [Ind]

23

0

5

10

15

20

25

30

35

40A

ge

18

-25

Age

26

-34

Age

35

-44

Age

45

-54

Age

55

-64

Age

65

-74

Age

75

+

Age

18

-25

Age

26

-34

Age

35

-44

Age

45

-54

Age

55

-64

Age

65

-74

Age

75

+

Age

18

-25

Age

26

-34

Age

35

-44

Age

45

-54

Age

55

-64

Age

65

-74

Age

75

+

Age

18

-25

Age

26

-34

Age

35

-44

Age

45

-54

Age

55

-64

Age

65

-74

Age

75

+

in percent

Dep_Educ_age M0-Inc&Educ(mc50,w50)_age Dep_Educ_ M0-Inc&Educ(mc50,w50)_

1995 - 1999 2000 - 2003 2004 - 2007 2008 - 2011

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IV Results II – Multidimensional Poverty

Deprivation Measures: Work-Intensity [H]

24

0,0

5,0

10,0

15,0

20,0

25,0

30,0

1994 1996 1998 2000 2002 2004 2006 2008 2010

percent

Dep_WI M0-Inc&WI(mc50,w50) H-Inc&WI(mc1[union]) H-Inc&WI(mc100,[intersection])

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IV Results II – Multidimensional Poverty

Deprivation Measures: Work-Intensity [H]

25

0

10

20

30

40

50

60A

ge

18

-25

Age

26

-34

Age

35

-44

Age

45

-54

Age

55

-64

Age

65

-74

Age

75

+

Age

18

-25

Age

26

-34

Age

35

-44

Age

45

-54

Age

55

-64

Age

65

-74

Age

75

+

Age

18

-25

Age

26

-34

Age

35

-44

Age

45

-54

Age

55

-64

Age

65

-74

Age

75

+

Age

18

-25

Age

26

-34

Age

35

-44

Age

45

-54

Age

55

-64

Age

65

-74

Age

75

+

in percent

Dep_WI_age M0-Inc&WI(mc50,w50)_age Dep_WI_ M0-Inc&WI(mc50,w50)_

1995 - 1999 2000 - 2003 2004 - 2007 2008 - 2011

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IV Results II – Multidimensional Poverty

Deprivation Measures: Housing [H]

26

0,0

5,0

10,0

15,0

20,0

25,0

30,0

35,0

1994 1996 1998 2000 2002 2004 2006 2008 2010

percent

Dep_Housing M0-Inc&Housing(mc50,w50)

H-Inc&Housing(mc1[union]) H-Inc&Housing(mc100,[intersection])

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IV Results II – Multidimensional Poverty

Deprivation Measures: Housing [H]

27

0

5

10

15

20

25A

ge

18

-25

Age

26

-34

Age

35

-44

Age

45

-54

Age

55

-64

Age

65

-74

Age

75

+

Age

18

-25

Age

26

-34

Age

35

-44

Age

45

-54

Age

55

-64

Age

65

-74

Age

75

+

Age

18

-25

Age

26

-34

Age

35

-44

Age

45

-54

Age

55

-64

Age

65

-74

Age

75

+

Age

18

-25

Age

26

-34

Age

35

-44

Age

45

-54

Age

55

-64

Age

65

-74

Age

75

+

in percent

Dep_Housing_age M0-Inc&Housing(mc50,w50)_age

Dep_Housing_ M0-Inc&Housing(mc50,w50)_

1995 - 1999 2000 - 2003 2004 - 2007 2008 - 2011

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IV Results II – Multidimensional Poverty

Deprivation Measures: Subjective Well-Being (SWB) [Ind]

28

0,0

5,0

10,0

15,0

20,0

25,0

30,0

1994 1996 1998 2000 2002 2004 2006 2008 2010

percent

Dep_SWB M0-Inc&SWB(mc50,w50)

H-Inc&SWB(mc1[union]) H-Inc&SWB(mc100,[intersection])

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IV Results II – Multidimensional Poverty

Deprivation Measures: Subjective Well-Being (SWB) [Ind]

29

0

1

2

3

4

5

6

7

8

9

10A

ge

18

-25

Age

26

-34

Age

35

-44

Age

45

-54

Age

55

-64

Age

65

-74

Age

75

+

Age

18

-25

Age

26

-34

Age

35

-44

Age

45

-54

Age

55

-64

Age

65

-74

Age

75

+

Age

18

-25

Age

26

-34

Age

35

-44

Age

45

-54

Age

55

-64

Age

65

-74

Age

75

+

Age

18

-25

Age

26

-34

Age

35

-44

Age

45

-54

Age

55

-64

Age

65

-74

Age

75

+

in percent

Dep_SWB_age M0-Inc&SWB(mc50,w50)_age Dep_SWB_ M0-Inc&SWB(mc50,w50)_

1995 - 1999 2000 - 2003 2004 - 2007 2008 - 2011

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IV Results II – Multidimensional Poverty

All Dimensions, Impact of Income (100,75,50,25,15,0 percent)

30

0,0

10,0

20,0

30,0

40,0

50,0

60,0

1994 1996 1998 2000 2002 2004 2006 2008 2010

percent

i100M0 i100H(u) i100H(i) i075M0 i075H(u) i075H(i)

i050M0 i050H(u) i050H(i) i025M0 i025H(u) i025H(i)

i015M0 i015H(u) i015H(i) i000M0 i000H(u) i000H(i)

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IV Results II – Multidimensional Poverty

All Dimensions, Impact of Income ([M0] 100,75,50,25,15,0 %)

31

-1,0

1,0

3,0

5,0

7,0

9,0

11,0

13,0

15,0

1994 1996 1998 2000 2002 2004 2006 2008 2010

percent

i100M0 i075M0 i050M0 i025M0 i015M0 i000M0

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V Discussion

Multidimensional poverty measures – Advantages

Ability to put together items at different aggregation levels: individual / household / region

Therefore we can overcome shortfalls in established poverty analyses:

Working poor

Intra-household variation of poverty (due to pool-assumption)

We can include variables at regional levels to combine opportunities and constraints [health, labor market, education system] with „visible“ indicators of deprivation for inividuals and households

We are able to include subjective measures to show us, whether the existing frames are able to provide us with sufficient chances [constraints]

32

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V Discussion

Tasks for further developments: Identification: 1st Cutoffs / 2nd cutoffs (absolute/relativ lines; time)

Problems of cardinality

Weighting of dimensions

Aggregation: Correlation based poverty measures

(Final ) Remark The main difference between income-based poverty analyses and

multidimensional poverty approaches are not the number of dimensions, which are taken into account –

The main differences is wether we adress all kind of welfare aspects to one monetary unit (which is easier to handle for measurement), or whether we deal with different dimensions and different measures at the same time.

Again ... many thanks to OPHI – Jose Manuel Roche, Sabina Alkire!!!

33

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Thank You!