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Implications for the Measurement of Poverty

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Implications for the Measurement of Poverty WHY TIME DEFICITS MATTER: IMPLICATIONS FOR THE MEASUREMENT OF POVERTY Ajit Zacharias, Rania Antonopoulos, and Thomas Masterson July 2012 Empowered lives. Resilient nations. Acknowledgements Ajit Zacharias and Rania Antonopoulos of the Levy Economics Institute directed the project. Thomas Masterson of the Levy Economics Institute had the primary responsibility for the statistical matches and simulations that provide the basis for the bulk of the results of the report. The authors are deeply grateful to the United Nations Development Programme (UNDP) and International Labour Organization (ILO) for their generous support of this project. 2 Contents Preface ........................................................................................................................................................11 1 Introduction ........................................................................................................................................14 1.1 Context........................................................................................................................................14 1.2 The conceptual concern with existing income poverty measures .............................................17 1.3 A brief introduction to the analytical framework.......................................................................18 1.4 Objectives of the research project..............................................................................................19 1.5 Information content of the LIMTIP and potential uses ..............................................................20 2 Model and Empirical Methodology ....................................................................................................22 2.1 A model of time and income poverty .........................................................................................23 2.2 Empirical methodology and data................................................................................................27 2.2.1 Statistical matching.............................................................................................................27 2.2.2 Estimating time deficits.......................................................................................................29 2.2.3 Adjusted poverty thresholds...............................................................................................34 2.2.4 Accounting for hired domestic help in Mexico...................................................................35 2.2.5 Simulations of employment and household work..............................................................36 3 Income and Time Poverty of Households...........................................................................................41 3.1 All households.............................................................................................................................41 3.1.1 Official versus LIMTIP income poverty................................................................................41 3.1.2 The LIMTIP classification of households .............................................................................51 3.1.3 A closer look at time-poor households: effects of poverty status and gender ..................52 3.2 Households by employment status ............................................................................................60 3.2.1 Official versus LIMTIP income poverty................................................................................60 3.2.2 The LIMTIP classification of households .............................................................................75 3.2.3 Time-poor households ........................................................................................................79 3.3 Households by type of household ..............................................................................................85 3 3.3.1 Official versus LIMTIP income poverty................................................................................85 3.3.2 The LIMTIP classification of households .............................................................................95 3.3.3 Time-poor households ......................................................................................................100 3.4 Summing up ..............................................................................................................................113 4 Income and Time Poverty of Individuals...........................................................................................118 4.1 All individuals ............................................................................................................................120 4.1.1 Official versus LIMTIP income poverty..............................................................................120 4.1.2 The LIMTIP classification of individuals ............................................................................125 4.1.3 Time poverty rates of men and women............................................................................129 4.2 Individuals by employment characteristics ..............................................................................134 4.2.1 Employed versus nonemployed........................................................................................134 4.2.2 Employed persons by earnings quintile............................................................................142 4.2.3 Employed persons by type of employment......................................................................156 4.3 Summing up ..............................................................................................................................168 5 Full-Time Employment and Poverty..................................................................................................172 5.1 Characteristics of employable adults........................................................................................174 5.2 The effects of full-time employment on the income and time poverty of households ...........176 5.2.1 Official versus LIMTIP income poverty..............................................................................176 5.2.2 The hard-core poor ...........................................................................................................178 5.2.3 The LIMTIP classification of households ...........................................................................182 5.3 The effects of full-time employment on the income and time poverty of individuals.............187 5.3.1 Official versus LIMTIP income poverty..............................................................................187 5.3.2 The LIMTIP classification of individuals ............................................................................188 5.3.3 Time poverty rates for employed men and women.........................................................195 5.4 Summing up ..............................................................................................................................197 6 Concluding Remarks: Policy (Re) Considerations..............................................................................200 4 6.1 The employed poor...................................................................................................................202 6.2 The underemployed and nonemployed poor...........................................................................207 References ................................................................................................................................................212 5 List of tables in the main text Table 2-1 Surveys used in constructing the Levy Institute Measure of Time and Income Poverty............28 Table 2-2 Thresholds of personal care and nonsubstitutable household activities ...................................29 Table 2-3 Commuting time of employed individuals (weekly hours per adult, 18 to 74 years).................34 Table 3-1 Factors affecting the hidden poverty rate (LIMTIP minus official poverty rate): All households ....................................................................................................................................................................44 Table 3-2 Average income deficit (nominal values in national currency) and share (in the total number of income-poor households) of income-poor households by subgroup ........................................................48 Table 3-3 Decomposition of time poverty rate of men and women in time-poor households .................55 Table 3-4 Number (in thousands) and composition (in percent) of income-poor households by employment status of household: Official versus LIMTIP ..........................................................................63 Table 3-5 Poverty rates of households by employment status: Official vs. LIMTIP....................................65 Table 3-6 Factors affecting the difference between LIMTIP and official poverty rate (hidden poverty rate): Employed households.......................................................................................................................69 Table 3-7 Factors affecting the hidden poverty rate (LIMTIP minus official poverty rate): Employed households with children............................................................................................................................71 Table 3-8 LIMTIP classification of employed households and incidence of time poverty among employed households
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