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Material Deprivation

Material Deprivation. Luke Sibieta. What’s coming up?. Introduction to Material Deprivation Indicator Falling levels of material deprivation since 2004-05 Reflects growth in living standards, but not “catching up” What else can it teach us about living standards of families with children?

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Material Deprivation

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  1. Material Deprivation Luke Sibieta

  2. What’s coming up? • Introduction to Material Deprivation Indicator • Falling levels of material deprivation since 2004-05 • Reflects growth in living standards, but not “catching up” • What else can it teach us about living standards of families with children? • Relationship between income and material deprivation • How severe is “severe poverty?” • What are the risk factors associated with material deprivation?

  3. Rationale for Material Deprivation Indicator • HBAI statistics based on “snapshot” of household income • Unlikely to accurately represent living standards of those with volatile incomes, e.g. self-employed • Government has chosen to use three indicators of child poverty for 2010 target • Relative low Income • Absolute low Income • Combined Indicator of material deprivation and relative low income • Defined as being “materially deprived” and household income below 70% of contemporary median (BHC)

  4. Construction of Material Deprivation Indicator • Based on 21 questions about level of deprivation experienced by adults and children • e.g. Two pairs of all weather shoes for each adult, keep house warm, have a birthday party, go on school trips • Families lack items if they say they “wanted, but could not afford them” • Said to identify “enforced hardship” • Scores range between zero (lack nothing) and 100 (lack everything) • Materially deprived if they have a score greater than 25

  5. Distribution of Material Deprivation Scores 4.8m have score of zero 3.1m have score above 25 2.0m also have incomes below 70% of contemporary median 12.8m children in the UK in 2006-07 Source: HBAI data

  6. Reflecting on the indicator (1) • Indicator of the number of “necessities” that a family can’t afford • BUT… • Can conflate living standards with family preferences • e.g. Mckay (2004) shows that families who said they could not afford “necessities” chose to buy “luxuries.” • Sensitive to exact threshold • Absolute Measure • Does NOT say whether the living standards of poor families with children are keeping up with average living standards • Potentially better indicators available • e.g. expenditure

  7. Summing up trends since 2004-05 • Fall in official indicator of material deprivation • 100,000 per year • Sensitive to exact choice of threshold • No fall in “relative” material deprivation • Living standards of poor families with children are rising year-on-year • But not faster than average living standards • They are NOT catching up

  8. UK Trends since 2004-05 Source: HBAI data

  9. UK Trends since 2004-05 Source: HBAI data

  10. UK Trends since 2004-05 Source: HBAI data

  11. Sensitive to choice of threshold Source: HBAI data

  12. No fall in “relative” material deprivation Source: HBAI data

  13. What else can material deprivation teach us? • What is the relationship between income and material deprivation? • Do those said to live “severe poverty” have very low living standards? • Are the risk factors for income poverty and material deprivation different?

  14. Fuzzy relationship between income and material deprivation Source: HBAI data

  15. How severe is “severe poverty?” Incomes below 40% of contemporary median (BHC) Incomes between 40% and 60% of contemporary median (BHC) 6.2% of children in 2006-07 16.1% of children in 2006-07 Source: HBAI data

  16. Different risk factors? • Disagreement over who is poor between indicators • Disagreement over risk factors? • Analyse which factors are associated with income poverty and material deprivation • Hold constant all other observable factors • Factors: • Region, Number of Children, Family Type, Economic Status, Ethnicity, Housing, Disability

  17. Regional Results Source: HBAI data

  18. Disability and Family Type • Disability (adult) • Less likely to be in income poverty (-2.3 ppts) • More likely to be in material deprivation (+9.4 ppts) • Extra state benefits for higher needs • Family Type/Economic Status • Working lone parents are LESS likely to be income poverty than couples with one worker (-9.1 ppts) • But are MORE likely to be in material deprivation (+15.1 ppts) • Do equivalence scales give enough weight to needs of lone parents? • Might undermine one of the arguments for higher WTC for couples

  19. Conclusions • Falling levels of material deprivation since 2004-05 • Reflects growth in living standards, not catch up • Those in “severe poverty” are less deprived than others in income poverty • “severe” is probably the wrong term • Different risk factors • Reversal of regional rankings, case for regional prices? • Disabled adults more likely to experience material deprivation • Undermining the case for higher WTC for couples?

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