Written evidence from Dr. José Manuel Roche (CPM0046)

Evidence from Dr. José Manuel Roche, Research Associate

at the Oxford Poverty and Human Development Initiative (OPHI)

1. This note expands on the oral evidence provided to the Work and Pensions Committee on the inquiry: Children in poverty: Measurement and targets.[1] We include additional details from the multiple examples of best practice around the world.

2. The Sustainable Development Goals (SDGs) offer the most important global framework to monitor progress on poverty, including child poverty. Building on international conventions signed by countries including the UK, the SDGs contain a set of global targets that Member States have agreed to meet by 2030.

3. A key novelty of the SDGs framework is that it applies to all countries around the world, rich and poor countries alike.[2] All countries, including the UK, are expected to submit voluntary reports to the UN on their progress on all targets and indicators. The international goals and metrics are used for international comparability, but countries are also expected to set up their own benchmarks and relevant metrics for national monitoring and to report to their own citizens.

4. The SDGs were adopted in 2015 and set 2030 as the target year for delivery. The benefit of such long-term targets is to create sustained public accountability on persistent, pressing challenges such as child poverty.[3]

5. The first goal of the SDGs aims to ‘end poverty in all its forms everywhere’ by:

• Target 1.1. Eradicating extreme monetary or income poverty, and
• Target 1.2. Reducing at least by half the proportion of women, men and children living in poverty in all its dimensions, according to national definitions.

6. The consensus behind the SDGs defines poverty in terms of both income poverty (Target 1.1.) and multidimensional poverty or poverty in all its forms (Target 1.2).

7. The SDGs framework acknowledges that poverty measures should aim to capture both monetary and non-monetary aspects of poverty because monetary and multidimensional poverty does not fully overlap. The two measures can identify different populations as poor[4]. Relying solely on monetary poverty may miss large segments of the population experiencing deprivations in areas other than income, for instance, schooling or learning, health, employment, or housing conditions. Similarly, excluding income or economic poverty could overlook some households experiencing material or deprivations in living standards. There is therefore consensus that monetary poverty measures and multidimensional poverty measures complement each other to provide a fuller picture.

8. Monetary and multidimensional poverty can also move at different speeds and in different directions over time[5]. Thinking of the ongoing Covid-19 crisis in terms of child poverty, people’s income and employment might be impacted more than their housing conditions in the short term, while, among children, deprivations in education and learning could increase rapidly despite no immediate changes in living standards. Therefore, governments need both measures to direct policy and effectively target poverty in all its forms everywhere as per the SDG definition.

9. In terms of reporting on SDG 1, global data on income poverty is produced by the World Bank using different poverty lines for different types of comparisons. At the country level, almost all countries produce their own national income poverty measures based on more precise poverty lines using standardized methodologies. Countries may combine absolute poverty measures with relative poverty measures to provide a fuller picture. The best practice is to disaggregate income poverty picture by age groups, monitoring in such way child poverty also.[6]

10. Internationally comparable figures on multidimensional poverty in the developing world are published by the United Nations Development Programme and the Oxford Poverty and Human Development Initiative via the global Multidimensional Poverty Index[7]. Many countries have also adopted an official national Multidimensional Poverty Index (MPI), tailored to their own context, to complement unidimensional income/consumption measures. So far, 64 countries have reported on multidimensional poverty for the SDGs, with at least 28 countries using national Multidimensional Poverty Indices. Most national MPIs are used for measurement and monitoring, policy design and coordination, budget allocation and targeting. A group of 61 countries and 19 organizations are part of the Multidimensional Poverty Peer Network (MPPN) which exchanges expertise and policy work on this area.

11. Countries around the world use a combination of the following methods to measure poverty:

• Unidimensional monetary measures – focusing on income or consumption. Poverty is defined as living below a minimum level identified by a single threshold (the poverty line) The threshold identified can be absolute or relative.

• Multidimensional measures - focusing on multiple deprivations poor people experience in their daily lives (e.g. food insecurity, poor health or access to healthcare, inadequate living standards, material deprivation). It can be measured using different tools such as an index or a dashboard.

• Dashboard – shows only the incidence of poverty and for each indicator separately, with no overall summary score to track changes in poverty over time. It cannot capture whether the same person or household experiences deprivation across one or multiple indicators. 

• Index – provides a more complete picture of poverty with indicators summarised in a single index score which helps to monitor changes over time. The index can be broken down to show differences across population subgroups, areas and indicators. Besides incidence, it also captures the intensity of poverty and simultaneous deprivations experienced by the poor.

12. All three types of measures report on the form(s) of poverty experienced by poor people, the minimum standard(s) required in each area, and the proportion of the population identified as living in poverty by the measure (incidence or headcount ratio).

13. In addition, a Multidimensional Poverty Index (MPI) captures the intensity of poverty[8] experienced by those identified as poor. This is important for eradicating poverty, as governments have a duty not only to lift people above the poverty line but also to reduce the number of deprivations faced by those still in poverty.

14. Unlike multidimensional dashboards, the MPI shows the simultaneous disadvantages experienced by individuals and households across the different areas of poverty. This enables policymakers to go beyond the proportion of the population identified as living in poverty and address the interlinkages between deprivations such as health, education, income or living standards. This can lead to more effective policy responses such as multi-sector interventions that target different but connected aspects of poverty.

Source: Angulo, R. (2016). ‘From Multidimensional Poverty Measurement to Multisector Public Policy For Poverty Reduction: Lessons from the Colombian Case’. OPHI Working Paper 102, University of Oxford.

Source: ‘Multidimensional Poverty Index – Applications Colombia’. Presentation to the First Multidimensional Poverty Peer Network meeting by Bruce Mac Master, Director of the Department for Social Prosperity. Oxford, June 2013

15. Best practices across the globe include not only specific targets and metrics, but also a careful institutional design to facilitate policy coordination to address poverty in all its forms, and in particular child poverty. New Zealand, Colombia and Mexico three constricting and successful examples (see boxes for example 1, 2 and 3). Our advice to the UK Parliament is to consider carefully the institutional layout that can most successfully implement a child poverty reduction strategy in the UK context.

16. Many countries advocate that child poverty measures form part of the national strategy for poverty reduction as disjointed measures and targets can cause confusion and make interpretation for policy-applications difficult. That is the case for both Mexico and Colombia. The key for successful policy responses is to think about how the different poverty measures can be combined to work together in effectively reducing poverty in all its forms.

17. Child poverty measures should ideally be at the individual level, but this is often difficult to achieve as many child-relevant deprivations are measured at the household level, and deprivations also change by age group (e.g. infants cannot be at school). Both conditions tend to pose limitations in availability and comparability of data, hence why child measures are often constructed at the household level. 

18. The most common approach to measure child poverty using a Multidimensional Poverty Index (MPI) has been to include key child indicators in the national MPI and disaggregate the results by age group such as the case of Colombia. It is also possible to do intrahousehold analysis of the MPI to explore dynamics within the household.[9] A third option is to create a child MPI that directly links to a national MPI, which is what Mexico has chosen.

19. A child-specific poverty measure has the potential to capture deprivations that have disproportionate effects on children and/or deprivations impacting children only. We know that children experience poverty differently from adults, and poverty varies for children across age groups. Therefore, a child-focused poverty measure should include age-appropriate deprivations to fully understand the situation for different age cohorts .

20. Beyond measuring the lived experience of poverty among children accurately, it is vital that all indicators in a measure have clear policy implications. If an indicator cannot react to policy over time, it loses value for monitoring and public policy. There could of course be a causal relationship between indicators, but the analysis on the causes should be undertaken separately.

21. Our advice is to focus on outcome indicators that capture dimensions of wellbeing that matter for children. The child poverty measure is an evaluative measure after all, so the dimensions should reflect the desired outcomes for children (being healthy, being educated and learning, enjoying good housing conditions, being free from material deprivations, etc.). 

Additional Examples and Resources

Dimensions special issue on child poverty
https://mppn.org/wp-content/uploads/2019/08/Dimensions-7.pdf

This provides a comprehensive introduction and covers a range of topics related to measuring child poverty, including differences between the monetary and multidimensional approach, MODA and MPI, and some case studies from Mexico and Panama. The articles are not too technical and are suited for an audience such as the Commission. 

Thematic conference on measuring child poverty using MPI
https://mppn.org/child-multidimensional-poverty/

This includes presentations from Chile and Mexico (as well as OPHI).

Multidimensional Poverty Measurement and Analysis: The Book

https://ophi.org.uk/multidimensional-poverty-measurement-and-analysis/?preview=true

About OPHI

The Oxford Poverty and Human Development Initiative (OPHI) is a world-leading economic research and policy centre within the Oxford Department of International Development at the University of Oxford. Established in 2007, the centre is led by Professor Sabina Alkire and specialises in multidimensional poverty measurement and analysis. OPHI aims to build and advance a more systematic methodological and economic framework for reducing multidimensional poverty, grounded in people’s experiences and values.

Our work focuses on:

• Broadening poverty measurement by developing and implementing multidimensional measures of poverty, wellbeing and inequality.
   

• Improving data on poverty by developing and sharing tools to measure missing dimensions of poverty data that poor people value but which have been largely overlooked in international studies of poverty to date (quality of work, empowerment, physical safety, shame and humiliation, psychological wellbeing, social isolation).
   

• Building capacity by running technical training programmes and academic courses on multidimensional poverty and human development, and collaborating with development agencies, governments, universities and other research institutions and policy makers using our work.
   

Impacting policy by producing effective methodologies that have been adopted by policy makers, including national governments and the United Nations Development Programme Human Development Report Office.
 

June 2021