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Economic Poverty in Finland 1971-2004

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  • Marja Riihelä
  • Risto Sullström
  • Matti Tuomala

Abstract

In this paper we examined trends in the economic poverty in Finland using two data sources, the IDS (Income Distribution Survey) and the CES (Consumption Expenditure Survey). We drew on the recent literature on poverty analysis to analyse a range of poverty measures, using dominance conditions to rank the distributions of living standards. We found that poverty rate was the U-shaped curve over the period 1971 - 2004. As regards trends in poverty over time, the long-run perspective available from the CES indicated that from the early 1970s to the beginning of 1990s, the relative poverty rate declined. The latter part of the 1990s and the early years of 2000s were clearly different. We found that relative poverty rose over the period 1995 - 2004 for a very broad class of poverty measures and a wide range of poverty lines. Poverty rate, measuring poverty line 60 per cent from median income, was about 7 per cent (328000 persons) in 1990 and 11 per cent (557000 persons) in 2004. At the same time poverty became more severe. We also found that since the mid 1990s the poverty rate among children grew much faster than the poverty rate in the whole population. Whilst the total numbers in poverty during the 1987 - 2004 on these various definitions rose markedly, the composition of the poor also changed significantly. There is little doubt that unemployed households are the most vulnerable group of the population. Another vulnerable group is families with youngest children less than 7 years.

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Bibliographic Info

Paper provided by Government Institute for Economic Research Finland (VATT) in its series Discussion Papers with number 418.

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Date of creation: 16 Mar 2007
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Handle: RePEc:fer:dpaper:418

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Keywords: Poverty; poverty measures; ordinal poverty comparison;

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  1. Jantti, Markus & Danziger, Sheldon, 2000. "Income poverty in advanced countries," Handbook of Income Distribution, in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 6, pages 309-378 Elsevier.
  2. Sen, Amartya K, 1976. "Poverty: An Ordinal Approach to Measurement," Econometrica, Econometric Society, vol. 44(2), pages 219-31, March.
  3. Sen, Amartya, 1979. " Issues in the Measurement of Poverty," Scandinavian Journal of Economics, Wiley Blackwell, vol. 81(2), pages 285-307.
  4. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
  5. Kanbur, Ravi & Keen, Michael & Tuomala, Matti, 1994. "Labor Supply and Targeting in Poverty Alleviation Programs," World Bank Economic Review, World Bank Group, vol. 8(2), pages 191-211, May.
  6. Risto Sullström & Ilpo Suoniemi, 1995. "The Structure of Household Consumption in Finland, 1966-1990," Research Reports 27, Government Institute for Economic Research Finland (VATT).
  7. Foster, James E & Shorrocks, Anthony F, 1988. "Poverty Orderings," Econometrica, Econometric Society, vol. 56(1), pages 173-77, January.
  8. Sen, Amartya, 1983. "Poor, Relatively Speaking," Oxford Economic Papers, Oxford University Press, vol. 35(2), pages 153-69, July.
  9. repec:ese:emodwp:em3-00 is not listed on IDEAS
  10. Atkinson, A B, 1987. "On the Measurement of Poverty," Econometrica, Econometric Society, vol. 55(4), pages 749-64, July.
  11. Ilpo Suoniemi, 1993. "Public Welfare Services and Inequality: Introduction to methodology and some examples with the 1985 Finnish Household Expenditure Survey data," Discussion Papers 45, Government Institute for Economic Research Finland (VATT).
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