Income Poverty in Advanced Countries

The living standard of the least well-off members of society – industrialized or not – is of public policy and ethical interest. One way to examine differences between societies in this respect is to study the extent and severity of income poverty be­tween countries and over time. While poverty can be thought of in many different ways, examining income poverty has a long tradition. This chapter reviews issues that arise in studying economic poverty in industrialized countries and examines evidence on their ranking according to poverty and its changes over time. We review conceptual issues in Section 2. We discuss the measurement of re­sources, comparisons between different types of units, and what kinds of compar­isons between different populations can be made. We also discuss the role of time, income sharing assumptions and the aggregation of poverty införmation. ln Sec­tion 3, we discuss domestic evidence on poverty beföre tuming to evidence drawn from the Luxembourg lncome Study (LIS) on the incidence of relative poverty and its evolution over time. We then examine poverty orderings of countries using dominance criteria, studying the ordering by increasingly demanding conditions, and using both the poverty standard of each country and a common poverty line för all countries. We then move to examine in Section 4 the ordering of countries, using similar methods, för selected demographic subgroups of the population: children, the elderly and persons living in female-headed households. ln Section 5 we examine briefly the role of the public sector in terms of differences between market income and disposable income poverty rates, measured using the LIS. ln Section 6 we examine longitudinal evidence on poverty, show some cross­national evidence on the pattems of intragenerational poverty mobility and persistence should be weighed against their enhancement of other goals, such as the avoidance of social exclusion (Atkinson and Mogensen, 1993) or the promotion of social co­hesion and preservation of individual dignity (Barr, 1993).