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Poverty in Canada: Unidimensional and Multidimensional Measures Presented by: Lori J Curtis, PhD Department of Economics IARIW-BOK Conference, Seoul South Korea, April 26-28 2017

Multidimensional Poverty in Canada · Background Multidimensional measures of well-being/poverty gaining traction. In developing countries Multidimensional Poverty Index (MPI) (Alkire

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Page 1: Multidimensional Poverty in Canada · Background Multidimensional measures of well-being/poverty gaining traction. In developing countries Multidimensional Poverty Index (MPI) (Alkire

Poverty in Canada: Unidimensional and Multidimensional Measures

Presented by: Lori J Curtis, PhD

Department of Economics

IARIW-BOK Conference, Seoul South Korea, April 26-28 2017

Page 2: Multidimensional Poverty in Canada · Background Multidimensional measures of well-being/poverty gaining traction. In developing countries Multidimensional Poverty Index (MPI) (Alkire

Unidimensional Measures

of Poverty

Can a single measure, such as GDP/capita, income or expenditure, adequately represent the experience of poverty (Atkinson, 2003; Sen, 2006)?

Multidimensional Measures

of Poverty

Is aggregating multiple measures of attainments or deprivations into a single multidimensional measure better?

subjective measures

Weights

Cut-offs

Background

IARIW-BOK Conference, Seoul South Korea, April 26-28 2017 PAGE 2

Page 3: Multidimensional Poverty in Canada · Background Multidimensional measures of well-being/poverty gaining traction. In developing countries Multidimensional Poverty Index (MPI) (Alkire

Background

GDP measures have been used as an indication of the economic well-being (UNDP, 2016).

viable indicator of aggregate economic growth

limited as a description of the experience of wellbeing

household production or the underground economy?

health, leisure, environment, political freedom, or social justice?

Income/expenditure historically commonly used measure in micro-level poverty studies.

household production?

health, leisure, environment, political freedom, or social justice?

IARIW-BOK Conference, Seoul South Korea, April 26-28 2017 PAGE 3

Page 4: Multidimensional Poverty in Canada · Background Multidimensional measures of well-being/poverty gaining traction. In developing countries Multidimensional Poverty Index (MPI) (Alkire

Background

Multidimensional measures of well-being/poverty gaining traction.

In developing countries

Multidimensional Poverty Index (MPI) (Alkire & Santos, 2010)

Human Development Index (UNDP, 2010)

Beginning in developed countries

European Union (Alkire et al., 2014, Whelan et al 2014).

US (Mitra & Brucker, 2014; Dhongde & Haveman, 2015).

Canada (UNDP, 2016; Canada Index of Wellbeing, 2016)

IARIW-BOK Conference, Seoul South Korea, April 26-28 2017 PAGE 4

Page 5: Multidimensional Poverty in Canada · Background Multidimensional measures of well-being/poverty gaining traction. In developing countries Multidimensional Poverty Index (MPI) (Alkire

Background

PRESENTATION TITLE PAGE 5

Page 6: Multidimensional Poverty in Canada · Background Multidimensional measures of well-being/poverty gaining traction. In developing countries Multidimensional Poverty Index (MPI) (Alkire

Background

PRESENTATION TITLE PAGE 6

Page 7: Multidimensional Poverty in Canada · Background Multidimensional measures of well-being/poverty gaining traction. In developing countries Multidimensional Poverty Index (MPI) (Alkire

Background

PRESENTATION TITLE PAGE 7

Page 8: Multidimensional Poverty in Canada · Background Multidimensional measures of well-being/poverty gaining traction. In developing countries Multidimensional Poverty Index (MPI) (Alkire

Background

Some countries have developed survey instruments for MDPI (see for example the Global MDPI project at http://www.ophi.org.uk/).

Some have high quality longitudinal survey data to develop the instruments

EU-SILC data in the European Union (Alkire et al., 2014, Whelan et al., 2014)

Germany – SOEP (Suppa, 2016)

Others parse together indicators using available data

American Community Survey (Dhongde & Haveman, 2015)

Current Population Survey and American Community Survey data (Mitra & Brucker, 2014)

IARIW-BOK Conference, Seoul South Korea, April 26-28 2017 PAGE 8

Page 9: Multidimensional Poverty in Canada · Background Multidimensional measures of well-being/poverty gaining traction. In developing countries Multidimensional Poverty Index (MPI) (Alkire

Data

This study compares constructed MDP measures with ‘traditional’ measures of poverty using multiple nationally representative data sources (pumf files)

Cansim tables 384-0038 and 051-0005 are used to calculate the growth in GDP/capita over time. (http://www5.statcan.gc.ca/cansim)

Survey of Household Spending (SHS) – 2003, 2005, 2007, and 2009

Canadian Community Health Survey (CCHS) - 2003, 2005, 2007, 2009, and 2012

Waiting for access to Master files of SHS and CCHS

IARIW-BOK Conference, Seoul South Korea, April 26-28 2017 PAGE 9

Page 10: Multidimensional Poverty in Canada · Background Multidimensional measures of well-being/poverty gaining traction. In developing countries Multidimensional Poverty Index (MPI) (Alkire

Methods

Growth GDP/capita is % change in annual expenditure based real GDP/population (chain-linked).

SHS Income and expenditure measures are estimated per Crossley and Curtis, 2006.

Households are considered poor if they have adjusted income or expenditure ≤ 0.5*median.

MDP dimensions, indicators, and thresholds a la Dhongde & Haveman’s (2015)

CCHS indicators are reported for households

Statistics Canada weights are multiplied by household size poverty head counts.

Paper presents sensitivity analysis of many measures – here present growth in GDP/capita, income and expenditure from SHS, Multidimensional from CCHS

IARIW-BOK Conference, Seoul South Korea, April 26-28 2017 PAGE 10

Page 11: Multidimensional Poverty in Canada · Background Multidimensional measures of well-being/poverty gaining traction. In developing countries Multidimensional Poverty Index (MPI) (Alkire

Multidimensional Poverty Dimensions and Indicators

Dimensions Indicators

Health

No Regular MD Household does not have a regular

family physician

Disability A household member is limited in

activities by a disability

Education

No High School Highest adult educational level in

household is less than high school

certificate

No Eng/Fr

Speaker

No one in household speaks an official

language

Standard of

Living

No Employment Major source of household income is

not employment income

Low Income Household income (adjusted) is in the

bottom quintile of the income

distribution.

Housing

Do Not Own

Home

The house is not owned by a member of

the household

Crowded There is not a bedroom for parent(s)

and each child

Food Insecure Food Insecure IndexIARIW-BOK Conference, Seoul South Korea, April 26-28 2017

Page 12: Multidimensional Poverty in Canada · Background Multidimensional measures of well-being/poverty gaining traction. In developing countries Multidimensional Poverty Index (MPI) (Alkire

Mutlidimensional Poverty measure - CCHSSensitivity

MDP1 = No MD + Disability + No High school + No Eng/Fr + No employ income+ low income + crowded + house not owned

MDP3 = No MD + Disability + No High school + No Eng/Fr + No employ income+ low income + food insecure + house not owned MDP 5 = MDPH without language (SHS comparison)

MDP 7 = MDP H dropping PEI and NB (not available in 2009)

MDP2 = MDP1 without home ownership

MDP 4 = MDP 3 without home ownership

MDP 6 = MDP 5 without home ownership

MDP 8 = MDP 7 without home ownership

MDP(H) = MDP1 (03 – 07) and MDP3 (09-12)

MDP(NH) = MDP2 (03 – 07) and MDP4 (09-12)

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Page 13: Multidimensional Poverty in Canada · Background Multidimensional measures of well-being/poverty gaining traction. In developing countries Multidimensional Poverty Index (MPI) (Alkire

Indicators in CCHSProportion of Individuals with stated Indicator in CCHS

2003 2005 2007 2009 2012

No MD 0.1413 0.1437 0.1597 0.1589 0.1545

Health

0.0014 0.0014 0.0015 0.0015 0.0021

Disability 0.1068 0.1116 0.1064 0.0901 0.1121

0.0012 0.0013 0.0012 0.0012 0.0019

No High school 0.0479 0.0366 0.0962 0.0889 0.0925

Education

0.0009 0.0008 0.0012 0.0012 0.0017

No Language 0.0148 0.0110 0.0148 0.0142 0.0083

0.0005 0.0004 0.0005 0.0005 0.0005

No Employ Income 0.0453 0.0433 0.0479 0.0484 0.0518

Standard of

Living

0.0008 0.0008 0.0009 0.0009 0.0013

Low Income 0.0638 0.1468 0.1480 0.1500 0.1402

0.0010 0.0014 0.0014 0.0015 0.0020

No Own Home 0.2080 0.1946 0.2213 0.2148 0.2353

Housing

0.0016 0.0016 0.0017 0.0017 0.0025

Crowded 0.1283 0.1024 0.1013

0.0013 0.0012 0.0012

Food Insecure 0.0813 0.0663 0.0806

0.0014 0.0010 0.0016

*Canadian respondents 25 to 64 years of age (2009 where PEI and NB are excluded – see text for explanation)

IARIW-BOK Conference, Seoul South Korea, April 26-28 2017

Page 14: Multidimensional Poverty in Canada · Background Multidimensional measures of well-being/poverty gaining traction. In developing countries Multidimensional Poverty Index (MPI) (Alkire

Tetrachoric

Correlations between

Indicators

CCHS 2007

No

Regular

MD

Disability No

High

School

No

Empl

Inc

Low

Income

Not

Own

Home

Crowd Food

Insecure

No

English

Speaker

No Regular MD 1.0000

Disability -0.1510

No High School 0.0485 0.3201 1.0000

No Employment

Income 0.0620 0.4360 0.4106 1.0000

Low Income

0.1345 0.3419 0.3911 0.6926 1.0000

Does Not Own Home

0.3008 0.1574 0.2310 0.4702 0.5933 1.0000

Crowded

(<1 rm/person) 0.1562 -0.0069 0.1579 0.3071 0.4966 0.4783 1.0000

Food Insecure

0.1076 0.3717 0.2949 0.5514 0.6394 0.5173 0.3963 1.0000

No English Speaker

0.0651 0.0423 0.3188 0.2297 0.4209 0.2635 0.2695 0.2522 1.0000

IARIW-BOK Conference, Seoul South Korea, April 26-28 2017

Page 15: Multidimensional Poverty in Canada · Background Multidimensional measures of well-being/poverty gaining traction. In developing countries Multidimensional Poverty Index (MPI) (Alkire

Correlation Matrix

Multidimensional Poverty

Counts

CCHS 2007

MDP1

Count

MDP2

Count

MDP3

Count

MDP4

Count

MDP5

Count

MDP6

Count

MDP7

Count

MDP8

Count

MDP1 Count1.0000

MDP2 Count0.9460 1.0000

MDP3 Count

0.9528 0.8937 1.0000

MDP4 Count

0.8826 0.9296 0.9455 1.0000

MDP5 Count

0.9945 0.9376 0.9470 0.8739 1.0000

MDP6 Count

0.9388 0.9917 0.8859 0.9207 0.9439 1.0000

MDP7 Count

0.9516 0.8832 0.9038 0.8196 0.9561 0.8879 1.0000

MDP8 Count

0.8887 0.9269 0.8354 0.8558 0.8925 0.9333 0.9448 1.0000

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Page 16: Multidimensional Poverty in Canada · Background Multidimensional measures of well-being/poverty gaining traction. In developing countries Multidimensional Poverty Index (MPI) (Alkire

Tetrachoric

Correlations

Multidimensional

Poverty Score ≥ 2

CCHS 2007

MDP1

Count ≥ 2

MDP2

Count ≥ 2

MDP3

Count ≥ 2

MDP4

Count ≥ 2

MDP5

Count ≥ 2

MDP6

Count ≥ 2

MDP7

Count ≥ 2

MDP8

Count ≥ 2

MDP1 Count ≥ 21.0000

MDP2 Count ≥ 20.9791 1.0000

MDP3 Count ≥ 20.9708 0.9436 1.0000

MDP4 Count ≥ 20.9408 0.9632 0.9693 1.0000

MDP5 Count ≥ 20.9949 0.968 0.9684 0.9312 1.0000

MDP6 Count ≥ 20.9792 0.9946 0.9389 0.9518 0.978 1.0000

MDP7 Count ≥ 20.9619 0.9289 0.935 0.8798 0.9682 0.9349 1.0000

MDP8 Count ≥ 2 0.9361 0.9591 0.8943 0.9043 0.9364 0.9602 0.9619 1.0000

IARIW-BOK Conference, Seoul South Korea, April 26-28 2017

Page 17: Multidimensional Poverty in Canada · Background Multidimensional measures of well-being/poverty gaining traction. In developing countries Multidimensional Poverty Index (MPI) (Alkire

0.0000

0.0500

0.1000

0.1500

0.2000

0.2500

MDP H MDP NH MDPC 1 MDPC 2 MDPC 3 MDPC 4 MDPC 5 MDPC 6

Pro

po

rtio

n o

f P

op

ula

tio

nSensitivity Analysis

2003 2005 2007 2009 2012

IARIW-BOK Conference, Seoul South Korea, April 26-28 2017

Page 18: Multidimensional Poverty in Canada · Background Multidimensional measures of well-being/poverty gaining traction. In developing countries Multidimensional Poverty Index (MPI) (Alkire

0

0.05

0.1

0.15

0.2

0.25

2003 2005 2007 2009 2012

Pro

po

rtio

n o

f P

op

ula

tio

nPoverty Measures with and without NB and PEI

MDP H MDP NH MDPsm H MDPsm NH

Economics

Page 19: Multidimensional Poverty in Canada · Background Multidimensional measures of well-being/poverty gaining traction. In developing countries Multidimensional Poverty Index (MPI) (Alkire

-0.05

0

0.05

0.1

0.15

0.2

0.25

GDP/cap Income Expend MDP H MDP NH

Pro

po

rtio

n o

f P

op

ula

tio

n

Well being/Poverty Measures

2003 2005 2007 2009 2012

IARIW-BOK Conference, Seoul South Korea, April 26-28 2017

Page 20: Multidimensional Poverty in Canada · Background Multidimensional measures of well-being/poverty gaining traction. In developing countries Multidimensional Poverty Index (MPI) (Alkire

0

10

20

30

40

50

60

2003 2005 2007 2009 2012

Per

cen

t o

f P

op

ula

tio

nMDP Counts with Housing CCHS

0 1 2 3 4 5 6 7 8 mdp1u mdp1i mdp≥2

IARIW-BOK Conference, Seoul South Korea, April 26-28 2017

Page 21: Multidimensional Poverty in Canada · Background Multidimensional measures of well-being/poverty gaining traction. In developing countries Multidimensional Poverty Index (MPI) (Alkire

0

10

20

30

40

50

60

70

2003 2005 2007 2009 2012

Per

cen

t o

f P

op

ula

tio

nMDP Counts without Housing CCHS

0 1 2 3 4 5 6 7 mdp2u mdp2i MDP

IARIW-BOK Conference, Seoul South Korea, April 26-28 2017

Page 22: Multidimensional Poverty in Canada · Background Multidimensional measures of well-being/poverty gaining traction. In developing countries Multidimensional Poverty Index (MPI) (Alkire

Multidimensional Poverty Index, MPI (𝑀0)*

2003 2005 2007 2009 2012

M0 (H) 0.056 0.061 0.073 0.066 0.073

M0 (NH)

0.032 0.038 0.047 0.041 0.044*weighted average deprivations experienced by the multidimensional poor.

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Page 23: Multidimensional Poverty in Canada · Background Multidimensional measures of well-being/poverty gaining traction. In developing countries Multidimensional Poverty Index (MPI) (Alkire

IARIW-BOK Conference, Seoul South Korea, April 26-28 2017

0

1

2

3

4

5A

tla

nti

c

QU

E

ON

T

Pra

irie

s

BC

Atl

an

tic

QU

E

ON

T

Pra

irie

s

BC

Atl

an

tic

QU

E

ON

T

Pra

irie

s

BC

Atl

an

tic

QU

E

ON

T

Pra

irie

s

BC

2003 2005 2007 2009

Ra

nk

ing

Regional Ranking by Measure

GDP Income Exp MDP H MDP NH

Page 24: Multidimensional Poverty in Canada · Background Multidimensional measures of well-being/poverty gaining traction. In developing countries Multidimensional Poverty Index (MPI) (Alkire

Income, Expenditure & Multidimensional Poverty by Family Type

2003 2005 2007 2009

Inc Exp

MDP

H

MDP

NH Inc Exp

MDP

H

MDP

NH Inc Exp

MDP

H

MDP

NH Inc Exp

MDP

H

MDP

NH

Single 0.22 0.04 0.40 0.22 0.21 0.03 0.41 0.24 0.21 0.04 0.43 0.26 0.19 0.02 0.44 0.27

Couple 0.05 0.02 0.14 0.07 0.06 0.02 0.14 0.08 0.04 0.01 0.17 0.10 0.04 0.01 0.17 0.10

Two

Parent 0.06 0.02 0.14 0.09 0.07 0.02 0.15 0.11 0.07 0.03 0.17 0.13 0.07 0.02 0.14 0.10

Lone

Parent 0.28 0.07 0.41 0.26 0.27 0.06 0.44 0.33 0.27 0.07 0.45 0.33 0.25 0.07 0.43 0.33

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Page 25: Multidimensional Poverty in Canada · Background Multidimensional measures of well-being/poverty gaining traction. In developing countries Multidimensional Poverty Index (MPI) (Alkire

Multidimensional Poverty by Immigrant Status - CCHS

2003 2005 2007 2009 2012

H NH H NH H NH H NH H NH

Native

Born 0.151 0.093 0.161 0.108 0.181 0.122 0.169 0.114 0.186 0.117

Immigrant

< 10 yrs 0.479 0.306 0.475 0.337 0.500 0.356 0.459 0.279 0.472 0.250

Immigrant

≥ 10 yrs 0.188 0.098 0.201 0.151 0.240 0.191 0.193 0.139 0.253 0.176

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Page 26: Multidimensional Poverty in Canada · Background Multidimensional measures of well-being/poverty gaining traction. In developing countries Multidimensional Poverty Index (MPI) (Alkire

Conclusions….

Individual Indicators are not highly correlated

MDP measures are highly correlated

Surveys provide different levels for indicators and thus poverty

MDP higher head counts than income and expenditure (generally)

Income higher levels of poverty than expenditure

Generally uni and multidimensional trends not very similar

Ranking changes at provincial level

Subgroup analyses provide similar trends

GDP growth most inconsistent with the other measures

IARIW-BOK Conference, Seoul South Korea, April 26-28 2017

Page 27: Multidimensional Poverty in Canada · Background Multidimensional measures of well-being/poverty gaining traction. In developing countries Multidimensional Poverty Index (MPI) (Alkire

Conclusions….

???? Right measure???

Assumption seems to be MDP best captures experience but???

Policy –

No official poverty measure in Canada

Who decides which measure is best?

Who decides which indicators are important?

If poverty alleviation important goal need consistent measure

Then need consistent data

LFS legislated to provide consistent data over time for Urate etc.

Could we do the same for poverty measures?

IARIW-BOK Conference, Seoul South Korea, April 26-28 2017

Page 28: Multidimensional Poverty in Canada · Background Multidimensional measures of well-being/poverty gaining traction. In developing countries Multidimensional Poverty Index (MPI) (Alkire

IARIW-BOK Conference, Seoul South Korea, April 26-28 2017

Thank You

Comments Appreciated

[email protected]