, Volume 9, Issue 1, pp 87-110
Date: 28 May 2010

Measurement and identification of asset-poor households: a cross-national comparison of Spain and the United Kingdom

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Abstract

This paper is concerned with the analysis of the wealth dimension of poverty in developed countries, which cannot be measured by means of information on household income. We focus on identifying the group of households that lack enough wealth holdings to sustain them during a period of economic crisis in order to quantify asset poverty, and its demographic weight, in two industrialized countries with particularly different household demographics and saving attitudes such as Spain and the United Kingdom. Our results show that the age profile of the asset poor is remarkably similar in the two countries. In both it is individuals in households whose head is under 45 years old who are more likely to be asset poor. However, some country-specific differences also arise. For instance, the incidence of wealth poverty in the United Kingdom is about twice that of Spain. Using counterfactual analysis we find that, although the different household demographics clearly contribute importantly to this result, there remains a significant part of the asset-poverty gap which is not explained by this relevant factor.

I wish to acknowledge the financial support from the Xunta de Galicia (Programa de Estruturación de Unidades de Investigación en Humanidades e Ciencias Sociais 2006/33 and FEDER founds) and the Spanish Ministerio de Ciencia e Innovación (SEJ2007-67911-C03-01/ECON). This paper is based on work carried out during my visit to the Institute for Social and Economic Research, University of Essex, supported by the EU Improving Human Potential Programme.