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Poverty Measurement in Innocenti (2005) Report Card

Essay by   •  June 6, 2011  •  Case Study  •  2,470 Words (10 Pages)  •  1,812 Views

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Poverty measurement in Innocenti (2005) report card

The Innocenti (2005) report card reports child poverty rate by drawing a poverty line based on the income level fallen below 50% of the national median income. The reports also moved the poverty line to 40% and 60% below national median income to compare how different poverty line reflect a income inequality compare to different nations. These children and families earning less than the indicated percentage of the income levels are defined as living in relative poverty.

In addition, the report used a fixed poverty line (backstop)as a reference poverty line to measure the changes in terms of increases and decreases in poverty rate in comparison to OECD countries. This measurement method is widely used in international aspect in the purpose of comparing poverty rate among the OECD countries known as the " rich nations" in the world. It is to determine numbers of factors contributing in poverty, and indicated which nations and how are government intervention and policies influences the poverty rates.

Poverty measurement in Campaign 2000 report card

The Campaign 2000 report card used LICO (Low Income Cut-Offs) before and after tax as a measure of the poverty rate. It shows a major indication of the income and wealth inequality towards Canadians. It reflects the pattern of the average earning of low-income family to be define as living in poverty. With the Low-Income Gap of Canadians in a downward spiral between the rich and the poor, the reports measures and compare the difference not solely with the average income but the highest and the lowest income for families with children under 18 to indicated the distribution of the wealth and income inequality in Canada. Pre-tax LICO measures different demographic groups according to individual characteristics within the populations and focuses on the high risk groups such as the first nation, immigrants, people with disability and children with lone parents. The reports compare the impact of poverty rates across provinces in Canada at not just slightly under the poverty line, but well below and may be in dire need of external assistance and government interventions.

Methods as explained in the text by Raphael (2007)

Raphael (2007) states that LICO (Low Income Cut-Offs) is the primary measurement method of poverty in Canada. Statistic Canada defined low income as poverty as the current poverty line that used to measures poverty is unclear and and the definition of poverty is ambiguous which is associated with relative poverty. It measures income spending within household on the basic needs in life such as food, shelter and clothing which is calculated in two dimensions, before and after tax. Moreover, LICOs are adjusted to measure different family sizes and community sizes. Families who fall below the cut off lines are described as low income and living in poverty. It serves as an income threshold in which family expenditure on normal goods is below the income level than other average families. Therefore, the gap between the amount of money a low income family earn and the low income cut offs line indicated a certain degree of income inequality. As In Campaign 2000 report card has shown that the LICO data represents after-tax income measures of poverty rate has decreased when compare to pre tax income level.

Poverty rate decline by about 4-5% based on calculation after tax LICO, as it demonstrates the true value of an individuals spending and distribution of income after tax whereas pre tax LICO calculation generates a relatively more accurate result on the perception of require amount of income level to avoid poverty (Raphael 2007).

Raphael (2007) also states that the method of measuring poverty is the comparison of the income received by a household is 50% less of the median income level of the populations measures in the national sector with other OECD countries. This method allow to measure of income inequality from how the nations distribute income and resources within the population as compare the lower 10% to the upper 10% of the populations. However, Raphael (2007) indicated that it is an appropriate method of measuring relative poverty as it leaves the jurisdictions upon the reliance of the market, labour and economic forces. The Innocenti report cards and other world wide studies of poverty are commonly used this methodology in international perspective, as it also takes absolute poverty ability -an accessibility to a certain amount or types of goods and services into account in which a measures of material deprivation as compare to one nation to another.

Strengths and weaknesses

In the Innocenti report card, it best captured poverty in relative approach, below 50% of median income of the populations allow the measures in poverty rate provide a more complex and broader view in income and sources inequality which the method LICOs used in Campaign 2000 report card cannot. However, the reports has noted that this method has its limitations on the fact that it merely measures income poverty and it leaves out an influential factors on the material deprivation of living. Poverty is difficult to measure as it has different dimensions in viewing poverty, income or wealth not solely based on salary for a certain period of time and a certain degree of income equality but its important to include the properties, assets, saving, pension or other social assistance which they would also act an impact or changes on the poverty figure especially on the economic growth or during recession period.

In Campaign 2000 report card, it measures poverty directly through the income level by drawing a low income cut off line before and after tax to determine low-income and families and children living in poverty. Its is best using the appropriate and available data to calculate poverty rate to allow policies intervention to follow the commitment of reducing poverty and make changes to improve the situation of the people defined as living in poverty as indicated as vulnerable and of the high risk social groups.

Poverty rate in different countries

Social trends, labor market conditions and government policies are the key drivers that determines a countries' child poverty rate. Of the three, government policies is the most significant. There are no clear definition amongst all OECD countries on what child poverty should be defined as (Innocenti, 2005). Therefore all countries have their own level of commitment and have different tactics towards reducing child poverty. It should be noted that there is a positive correlation between high government spending on family/ social benefits and low child poverty rate (Innocenti, 2005). A healthy

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