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Measuring Child Poverty in South Africa: Sensitivity to the Choice of Equivalence Scale and an Updated Profile

Abstract

This paper offers evidence on the sensitivity of child poverty in South Africa to changes in the adult equivalence scale (AES) and updates the child poverty profile based on the Income and Expenditure Survey 2005/06. Setting the poverty line at the 40th percentile of households calculated with different AESs the scope and composition of child poverty are found to be relatively insensitive to the scale used. The rankings of children of different ages, girls versus boys, racial groupings and children living in rural versus urban areas are unaffected by choice of AES, although some provincial rankings on the poverty headcount measure are. The proportions of children and households ‘correctly’ identified as poor for the full range of scales is extremely high. These findings support the argument that it may be appropriate for profiling poverty in South Africa to use a poverty line based on a per capita welfare measure. For the construction of the child poverty profile, per capita income is used as the welfare indicator with the poverty line set at the 40th percentile of household. The profile suggests that poverty amongst children is more extensive than amongst the population or adults even after the massive injection of transfers into households with poor children through the child support grant. The child poverty headcount, depth and severity are all highest amongst children age 0–4 and lowest amongst those aged 15–17, who are not yet beneficiaries of the grants. They are also highest amongst African and Coloured children. Large variations across provinces remain. The analysis underlines the importance of prioritising children in the fight against poverty, particularly in their earliest years.

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Notes

  1. The definition of a child varies. The South African Constitution defines a child as an individual younger than 18 years. This definition is used here unless otherwise stated.

  2. See Woolard (2002) for a description of the Engel method.

  3. For more on the range of AESs and their determination see Deaton and Muellbauer (1986) and Deaton (1997).

  4. The only evidence in this regard is that from Woolard’s comparison of the child poverty headcount in the 1995 and 1999 OHS (see Streak 2002b). She found that child poverty increased between 1995 and 1999. However, this finding should be read with caution because of the concern about extensive underreporting of income in the 1999 OHS.

  5. Whilst there has been little careful measurement work on multi-dimensional child poverty, qualitative research (see for example Berry and Guthrie 2003; Ewing 2004) has revealed that children suffering material deprivation commonly experience deprivation across a range of other domains, including health, education and psycho-social. Moreover, poor children commonly also experience greater difficulty in accessing health, education and basic services, and a poorer quality of such services.

  6. And considering differences in dealing with imputed rent between the surveys.

  7. In 2007, the exchange rate of the Rand fluctuated around an average value of R7.05 to the US dollar.

  8. One non-money metric indicator available from the General Household Survey, the proportion of households who reported that children have gone hungry in the past year, has shown a consistent decline every year since measurement began in 2002, and this proportion has now dropped from 31% in 2002 to 16% in 2006 (Van der Berg et al. 2007, p. 25).

  9. Two survey methods were used in combination to gather expenditure data: The diary method required respondents to record their expenditures on food and personal care items for 4 weeks in the form of a diary, while the recall method entailed capturing through a questionnaire their total expenditures on other items during the 11 or 12 months prior to the survey. As with the IES 1995 and 2000, only the recall method was used to capture income data using the main survey questionnaire. Reported income is the sum of regular and irregular income for a period of twelve months each. Statistical Release No. P0100 from Statistics South Africa (2008) contains more details on the design and implementation of the survey.

  10. This level, though somewhat arbitrary considering the equally arbitrary choice of poverty line, can be seen in the context of findings based on earlier data sets that used similar poverty cut offs. The National Institute of Economic Policy (NIEP) (1996) measurement study, based on the PSLSD 1993, and which used the old OECD AES, found the poverty headcount amongst children aged 0–4 years to be 60%. Woolard (2002), using the OHS 1999, a welfare indicator of per adult equivalent income and a Cutler & Katz (1992) type AES with the child cost parameter set at 0.6 and economies of scale parameter at 0.9 found it to be 59.2% amongst children age 0–17 and 59.3% amongst children age 0–6. Thus is appears that the poverty findings here are not all that different from those in previous studies, whereas there is somewhat less child poverty if the suggested StatsSA poverty line is used.

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Correspondence to Judith Christine Streak.

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Streak, J.C., Yu, D. & Van der Berg, S. Measuring Child Poverty in South Africa: Sensitivity to the Choice of Equivalence Scale and an Updated Profile. Soc Indic Res 94, 183–201 (2009). https://doi.org/10.1007/s11205-008-9421-6

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Keywords

  • Child poverty measurement and choice of equivalence scale
  • Child poverty scale and characteristics in South Africa