Extreme poverty and vulnerability in OECD countries

1. Extreme poverty and vulnerability in OECD countries Dominic Richardson How to measure Extreme Poverty in the EU Brussels 22nd September 2009

2. Main messages • Policies for the extreme poor should complement work-related anti-poverty strategies • Appropriate definitions and comparability are critical, as they will guide policy responses • To develop coherent and efficient policy responses to extreme poverty knowing who is at risk is vital • At a time of financial crisis there are good reasons to take a cautious approach to this work

3. Why are OECD governments interested in extreme poverty? • All governments aim to reduce poverty at all levels, and some have targets • Policies that encourage employment as a route out of poverty now dominate… • In work benefits and tax credits / Activation policies • … inevitably some people are left behind • The homeless? The ill? The low-skilled? • So, who misses out on these policies, what additional support do they need, and what are the cost implications?

4. About the OECD project on extreme poverty and vulnerability • Designed to understand better the population not captured by employment friendly policies, and the policies in place to meet their needs • Two part project • Data scoping study • Country policy reviews • To be informed by work underway at OECD and elsewhere

5. How might extreme poverty be measured? • Income poverty • Relative or absolute? • Equivalisation and cut-offs? • Social security-based minimum • Consumption • General or necessity based? • Deprivation • Homelessness • Food deprivation

6. What is vulnerability? • Situations that increase the likelihood of individuals to experience extreme forms of poverty • Three forms based on: • Structures • Skills • Personal situations (barriers) • ... and the interactions within and between! • Focus in the scoping paper is on personal and structural indicators of vulnerability • Mental health • Criminality and Criminal records • Informal labour • Low skills

7. Some data concerns • Standard household surveys don’t pick up the very poor • Mis- and under-reporting of benefit receipt and income occurs • Specialist surveys are not consistently comparable across countries • Statistics and the financial crisis • Policies and the financial crisis

8. Indicators of extreme poverty and vulnerability • Extreme poverty • Income poverty - income distributions of the income poor (50% threshold) • Deprivation - Food poverty and homelessness • Vulnerability • Personal - Criminality and Recidivism and Mental health disorders • Structural - Low skills and the low skills market and Informal labour

9. Extreme poverty: The income distributions of the poor population fall in to four main categories Source: Luxembourg Income Study, most recent data (extracted August 2009)

10. Deprivation: In 2007/08 about one in ten people in the OECD reported having trouble feeding their families at some point in the past year Have there been times in the past twelve months when you did not have enough money to buy food that you or your family needed? – Gallup World Poll, 2007 and 08.

11. Defining who is homeless is not a simple task… • Literal homelessness • Hidden homelessness • Rough sleepers • Specific data collection concerns • Coverage (who and how) • Consistency (what) • Times and places (when and where)

12. Just over one in twenty people in OECD countries reported having trouble providing adequate shelter or housing for their families at some point in the past year Have there been times in the past twelve months when you did not have enough money to provide adequate shelter or housing for you and your family? – Gallup World Poll, 2007 and 08.

13. Participation in crime as an indicator of vulnerability to extreme poverty • Lower skills, addictions, records checks, without family support, higher risk of homelessness • Data collected: Prison rates, Recidivism, and Criminal records • Limitations in comparisons • Populations differ, as do institutions covered, reoffending window varies country to country.

14. Prison populations vary massively across the OECD, on average two in a thousand of the working age population are behind bars Prisoners per 10,000 of the population (various sources and years [2006 to 2008]).

15. The number of minors in the figures varies from country to country, as does the number of repeat offenders Proportion of adult prisoners Rate of recidivism Various sources and years (2006 to 2008).

16. Mental health problems as an indicator of vulnerability to extreme poverty • Difficulty in finding and keeping employment; specific needs / treatments, stigma • Data collected: Mental health diagnoses and self reported mental health • Limitations in comparisons • Disorder definitions differ, as do diagnoses, community capture (health system factors)

17. One in eight adults in the OECD have experienced at least one diagnosable mental health complaint in the past year Proportion of adults experiencing at least one diagnosable mental health problem in any one year (various years [2002-2007] and sources)

18. Northern European countries of the OECD are reporting the lowest level of self-reported depression Did you experience the following feelings during A LOT OF THE DAY yesterday? How about Depression? – Gallup World Poll, 2007 and 08.

19. Other possible vulnerability indicators • Personal situations: addictions (drugs and alcohol), social isolation, experiences of domestic violence, forced migrants (between and within countries), family structure • Human Capital: Physical health and soft skills • Structural: availability of childcare, transport, the markets (jobs, housing)

20. The next steps for extreme poverty and vulnerability research at OECD • Proposal to continue the scoping review • Filling data gaps • Assessing the cost issues • Outlining policies to combat extreme poverty and vulnerability • Multiple exposures to vulnerability • Develop a theoretical framework • National country reviews of data and policies will be proposed in 2011

21. Questions for debate • What role is there for measures of extreme poverty using self-reported income? • What factors would you expect to be covered in regards to vulnerability, and how might these be prioritised? • How might the global financial crisis impact on the short term measurement of extreme poverty and vulnerability, and any associated review of policies?

22. Comments and questions welcome Dominic.Richardson@OECD.org +33 145 24 9456 www.oecd.org/els/social