severe child poverty in the uk - srmc working paper · note: this paper is an extension of an...
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1
Combining Household Income and Material Deprivation to Measure the Extent and
Risk Factors of Severe Child Poverty in the UK
Monica Magadi,
Department of Sociology,
City University, London.
Social Research Methodology Centre Working Paper
February 2009
Note: This paper is an extension of an earlier work on measurement of severe child poverty in
the UK conducted by the Centre for Research in Social Policy (CRSP) for Save the Children
UK1
The Extent and Risk Factors of Severe Child Poverty in the UK
1 Magadi, M and S. Middleton (2007) Severe Child Poverty in the UK. Save the Children Fund, London, UK.
www.savethechildren.org.uk/en/docs/sevchildpovuk.pdf
2
Abstract
This study uses a combination of household income and material deprivation to measure the
extent and risk factors of severe child poverty in the UK, based on the 2004/5 Family
Resources Survey. Given the multi-dimensional nature of poverty, its measurement
encompasses both material deprivation (child and parent deprivation) and low household
income. Principal Components Analysis is used to derive a deprivation index which is then
combined with household income to identify children experiencing severe poverty. The
results show significant regional variations in severe child poverty experience, ranging from
2% of children in South England to 9% in London. The multinomial logistic regression results
conform to what might be expected, showing relatively high risks of severe poverty among
children: with workless parents; whose parents have low education; in large families of four
or more children; from ethnic minority groups, especially of Asian origin; and in families
with disabled adult(s). However, the results with respect to benefit receipt and lone
parenthood show interesting patterns worth further investigating.
Key words: Severe child poverty; material deprivation; low household income; multi-
dimensional poverty; Family Resources Survey; UK
3
The Extent and Risk Factors of Severe Child Poverty in the UK
INTRODUCTION
Study rationale and objectives
The UK has experienced a considerable recent decline in child poverty that has been mainly
attributed to government reforms. However, separate independent studies suggest that
children from the very poorest families remain a legitimate concern. Sutherland (2001) noted
that the income situation of the poorest children may have indeed worsened following the
government’s reforms. Recent evidence from the British Household Panel Survey (BHPS)
revealed that whereas the proportion of children in non-severe poverty declined significantly
after 1997, there has been no evidence of a corresponding decline in the proportion of
children in severe poverty (Magadi and Middleton, 2005). This was consistent with findings
from a separate study based on the Family Resources Survey (FRS) which observed that the
decline in child poverty between 1997/98 and 2003/4 was lower for more severe poverty
(below 50 per cent of median income) compared to the proportion below 60 per cent of
median income (Brewer et al, 2005).
Whilst currently and under the new measures the government will continue to monitor various
dimensions of poverty including persistent poverty, there are no plans to monitor severe
poverty. There has been a vast array of recent research on child poverty, but little is known
about the circumstances and characteristics of children in severe poverty for whom policy
responses may need to be different (Adelman et al, 2003)
This study aims at identifying an illuminating measure of severe child poverty, as well as
identify the risk factors of severe child poverty, based on the 2004/5 FRS. The child poverty
measure: takes into account the child’s own experience of poverty or deprivation; includes the
parent’s experience of poverty or deprivation, separately from that of their children; and
considers the income of household, since the contribution of low household income to the risk
of poverty in childhood cannot be ignored. The specific objectives are to:
(i) identify a measure of severe child poverty that discriminates between the
experiences of children defined as severely poor and other children:
(ii) examine the extent of severe child poverty in the UK; and
(iii) identify the risk factors of severe child poverty in the UK.
Overview of poverty measurement
Given the multi-dimensional nature of poverty, its measurement should encompass a variety
of dimensions and not just income (Perry, 2002). Focussing solely on income may miss out
important aspects of what it means to be poor (Nolan and Whelan, 2005). Furthermore, it has
been pointed out that poverty measures based solely on income are often limited given the
difficulty in obtaining an accurate calculation of a household’s income and widespread
misreporting of income by respondents in surveys (Willitts, 2006). The need to take into
account the multi-dimensional nature of poverty has been well recognized in international
poverty studies. In a descriptive comparative analysis of European poverty, Heikkila et al
(2006) argue that an indicator of poverty based on income, subjective and material
deprivations may be a more reliable measure of poverty than income alone. Material
deprivation indicators should compensate to some extent for the misreporting of income,
which is a particular problem at the lower end of the income distribution (Willitts, 2006).
4
Our measure of material deprivation is based on an enforced lack approach which helps to
discriminate between those not choosing to have necessities and those forced to do without
necessities because of a lack of economic resources (Hallerod, 1995). We do recognize on-
going debate in deprivation literature on the role choice plays and how different groups may
respond differently (Cappellari and Jenkins, 2004). For instance, it has been noted that
younger people tend to say they cannot afford items, whereas older people tend to say they
don’t need items (Mckay, 2004). Nevertheless, our confidence in the use of the enforced lack
approach in this study is strengthened by the fact that research evidence has not highlighted
differential reporting of deprivation indicators by families with children - families tend not to
differ much from the general population (Willitts, 2006).
Although some researchers have highlighted the benefit of material deprivation measure over
income and vice versa, many experts recognize the complementary nature of the two
measures and support the use of combined income and deprivation tier for a more robust and
reliable poverty measure (Ringen, 1988; Muffels, 1993; Hallerod, 1995; Nolan, 1999;
Adelman et al, 2003; DWP, 2003). According to DWP (2003), a better measure of living
standards at any point in time can be obtained by measuring both low income and material
deprivation combined to identify households whose low incomes are leading to deprivation.
Furthermore, the combined measure helps minimize the role of choice in deprivation items.
Analogous to the methodology used to measure severe child poverty based on the Poverty and
Social Exclusion Survey (PSE) of 1999 (Gordon et al., 2000; Adelman et al.,2003; Bradshaw
and Finch, 2003), the measurement of severe child poverty in this study, based on the 2004/5
FRS, involves three indicators:
a. child deprivation – whether the child goes without items that the majority of parents in
the UK believes to be necessary for children, because parents cannot afford to provide
the item(s);
b. parent deprivation – whether parent(s) go without items that the majority of adults in
the UK believes to be necessary for adults because they cannot afford the items; and
c. income poverty of the household – below a given threshold of median household
income .
DATA AND METHODS
Material deprivation threshold
It has been noted that it is not necessary to include a long list of goods and services when
measuring material deprivation (DWP, 2003). The list of deprivation items included in the
FRS (see Annex A) was arrived at through a comprehensive analysis of existing UK
deprivation data to identify a set of questions which best discriminates between poor and non-
poor families (McKay and Collard, 2004). A range of analytical methods were used to select
the subset of questions, ranging from an examination of items that families were most
commonly unable to afford, and direct investigations of the ability of particular questions to
discriminate between poor and non-poor, to more powerful statistical methods based of factor
analysis and latent class analysis. The different methods identified a consistent set of
questions as having the greatest relevance. The data show that a significant proportion of
children were in families who could not afford specific adult-related necessities (Table 1a) or
child-related items (Table 1b).
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Table 1a: Per cent of children in families deprived of specific adult-related items
Item Adults
have
this
Would like
but cannot
afford
Do not
want
NA/
missing
A holiday away from home for at least one week
a year
57.0 38.3 4.0 0.8
Friends or family around for a drink or meal at
least once a month
58.0 16.7 23.4 1.9
Two pairs of all weather shoes for all adults in
the benefit unit
87.2 10.4 1.9 0.6
Enough money to keep your home in a decent
state of decoration
77.9 18.7 1.3 2.1
Household content insurance 74.8 17.7 5.2 2.3
Make regular savings of £10 a month or more for
rainy days or retirement
53.5 40.8 5.0 0.8
Replace any worn out furniture 59.1 30.6 7.9 2.4
Replace or repair electrical goods such as
refrigerator or washing machine when broken
70.4 21.7 5.4 2.4
Have a small amount of money to spend each
week on yourself (not on your family)
62.7 33.4 3.4 0.5
Have a hobby or leisure activity 56.9 18.6 23.2 1.3
Base Population: All children (n=16012) in 2004-5 FRS
Table 1b: Per cent of children in families who are deprived of specific child necessities
Item Children
have this
Would like
but cannot
afford
Do not
want
NA/
missing
A family holiday away from home for at
least one week a year
63.5 31.4 3.5 1.6
Enough bedrooms for each child of 10 or
over of a different sex to have their own
bedroom
14.4 3.1 0.4 82.1
Leisure equipment such as sports
equipment or a bicycle
85.8 8.2 3.6 2.4
Celebrations on special occasions such as
birthdays, Christmas or other religious
festivals
93.3 4.5 1.0 1.2
Go swimming at least once a month 58.6 10.6 27.0 3.8
Do a hobby or leisure activity 76.6 7.0 11.8 4.6
Have friends around for tea or snacks at
least once a fortnight
70.1 8.2 18.1 3.6
Go to toddler group/ nursery/ playgroup at
least once a week (for children under 6 not
attending primary or private school
25.3 2.6 7.5 64.6
Go on school trips (for those over 6, or
under 6 and attending primary or private
school)
75.7 5.1 2.5 16.6
Base Population: All children (n=16012) in 2004-5 FRS
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We used principal components analysis (PCA) to assign indicator weights and derive
summary indices of adult and child deprivation. The PCA is a powerful tool in identifying the
underlying patterns in the data and reducing the number of dimensions without much loss of
information. The resulting summary indices are linear combinations of the sets of indicator
variables used to derive the PCA scores. Although the underlying assumption of the PCA
approach is that the indicator variables are interval level or ratio measurements, it has been
widely applied to categorical variables broken into sets of correlated dichotomous variables to
determine the weights and apply them to form the index. For instance, independent
investigators have used this approach to quantify variations in household wealth based on
household assets and amenities (Filmer and Pritchett 2001; Rutstein and Johnston 2004).
In this analysis, rather than use a 0-1 dichotomy for the indicator variables, we have assigned
deprivation scores for each of the items used to derive the PCA scores of -1 (for those who
have the item), +1 (for those who cannot afford item), and a mid-value of zero for those who
lacked an item but said they did not want or need it. All the deprivation items used to derive
the summary child and adult deprivation indices loaded reasonably well on the summary
indices (see Tables B1 and B2 in Annex B), with the exception of ‘Enough bedrooms for each
child of 10 or over of a different sex to have their own bedroom‘, presumably due to the large
number of ‘not applicable’ cases (see Table 1b). It is important to note that the patterns of
severe child poverty observed in this paper based on PCA derived weights are quite similar to
those obtained using a simple additive approach which assumes equal weights for the
deprivation items (see Magadi and Middleton, 2007). Although the PCA is a useful way of
creating summary indices from related sets of indicators, the inevitable loss of information on
specific indicators is a major limitation. This implies that it would be impossible to identify
specific deprivation indicators that may be of particular importance in the analysis.
The resulting summary deprivation scores derived from PCA were then classified into
quintiles. Children in families falling within the bottom quintile (i.e most deprived 20
percent) with respect to both child and adult deprivation items are considered as having
‘severe’ material deprivation, while those in the bottom quintile with respect to either adult of
child deprivation are considered to have mild-moderate deprivation. Using this classification,
11 per cent of children in the UK are in families with ‘severe’ material deprivation, 16 per
cent are in families with mild-moderate deprivation and the remaining 73 per cent are not
deprived.
Severe income poverty threshold
Income used in this paper refers to household income, equivalised2 based on the modified
Organization for Economic Co-orperation and Development (OECD) equivalence scale,
consistent with child poverty measures to monitor progress on child poverty reduction in the
UK (DWP, 2003). Although the official UK measure of low income3 previously used the
McClements scale (DWP, 2006), the OECD scale is preferred for child poverty measures
since it assigns greater weight to the cost of young children and facilitates comparison with
other official statistics in the UK and Europe. The modified OECD scale is now the preferred
equivalence scale in the UK Households Below Average Income (HBAI) analysis (DWP,
2008).
Low income measures may be based on ‘before housing cost’ or ‘after housing cost’ income.
With an ‘after housing cost’ measure, the median income poverty line and the proportions
below it are calculated after deducting housing costs from the household income. On the other
2 Adjusted to take into account household size and composition. Equivalisation is necessary to make sensible
income comparisons between households - a larger family needs a higher income than a smaller family for both
households to enjoy a comparable standard of living. 3 Households Below Average Income series
7
hand, housing costs are not deducted from the household income in a ‘before housing cost’
measure. This implies that with a ‘before housing cost’ measure, those with high housing
costs (e.g in London) could be wrongly classified as not being in poverty because their high
housing costs, if taken into account, might leave them with low income below the poverty
line. Those with low housing costs may also be wrongly classified as being in poverty.
Consequently, we have used an ‘after housing cost’ measure which is believed to be a better
measure of disposable household income. The measure is more suitable in identifying those
facing greatest financial difficulties – that is, those experiencing severe poverty.
Our income poverty measurement is based on relative (rather than absolute) poverty lines
which are considered more relevant in developed country contexts, such as the UK, where the
key challenge is to ensure that the whole population shares the benefits of high average
prosperity, and what is regarded as minimum acceptable living standards depends largely on
the general level of social and economic development (Expert group on poverty statistics,
2006). Three options were considered in identifying an appropriate income threshold for
severe child poverty measurement. The first involved an attempt to circumvent the well-
recognized drawback of using arbitrary income poverty thresholds. We considered using
median income support levels as a proxy for low income. However, a major shortcoming was
that the prevailing income support levels may not reliably reflect acceptable minimum living
standards. No reliable measure currently exists that can guide the setting up of a rationally
justifiable income threshold. Nevertheless, there is some scope for using this approach in
future when findings from recent and on-going works on ‘minimum income standard for
Britain’ can meaningfully inform the setting up of such a threshold (Bradshaw, et al, 2008;
Oldfield and Bradshaw, 2008).
The second option considered using the lower end of routinely published income thresholds.
The current approach in Opportunities for all is to report a range of low-income thresholds at
50, 60 and 70 percent of median. Measuring child poverty (DWP, 2003) uses the higher end
of income threshold of 70 per cent of contemporary median income, in conjunction with
material deprivation. Our focus in this study is on severe poverty, hence, a lower threshold is
appropriate. We considered using the lower end of income threshold of 50 per cent, or a more
extreme cut-off point of 40 per cent. According to the FRS 2004/05 survey, about 16 per cent
and nine per cent of all children in the UK were in households with income below 50 per cent
and 40 per cent of median income4, respectively. Previous studies on severe child poverty in
the UK have used the 40 per cent threshold (Adelman et al, 2003; Magadi and Middleton,
2005) or the 50 per cent threshold (Magadi and Middleton, 2007). While this approach is
desirable for its simplicity, the choice of thresholds remain rather arbitrary.
The final approach focused on the “poorest of the poor” - that is the bottom half of those
classified as being in poverty based on the commonly used standard threshold of 60 per cent
median income. This involved obtaining the median income for all individuals in income
poverty at 60 percent threshold, then classifying those in the bottom half (i.e below poor
median) as being in ”severe poverty”. This threshold corresponded to 45 percent of the
median income based on 2004/5 FRS. An examination of the proportion of children
classified as being among “the poorest poor” helps establish the extent to which children (or
families with children) are close to the conventional poverty line or disproportionately
experience dire financial difficulties. Using this definition, 12 percent of all children in the
UK are classified as being in ‘severe’ income poverty; 15 per cent are in mild-moderate
income poverty and 73 per cent are not in income poverty.
4 An ‘after housing cost’ income measure, equivalised using the OECD scale, modified to take a childless couple
as reference with an equivalence value of 1.00.
8
Severe child poverty definition
Our approach is to measure severe child poverty based on a combination of severe income
poverty and material deprivation. The severe income poverty measure is based on ‘the poorest
poor’ classification, described above. For material deprivation, a weighted approach based on
principal components analysis is used to identify the most deprived 20 per cent with respect to
both adult and child items.
Children are classified as being in ‘severe’ poverty if they are in households with severe
income poverty (i.e. ‘poorest poor’ – bottom half of income poor at conventional 60%
threshold), in combination with ‘severe’ material deprivation (in the bottom quintile with
respect to both adult and child necessities). Those in households below 70 per cent of median
income, in combination with either adult or child deprivation are classified as being in non-
severe poverty. The remaining are classified as not being in poverty.
RESULTS
The extend of severe child poverty in the UK
Based on the above definition, about four per cent (0.52 million) of children in the UK are
classified as being in severe poverty, being in households with extremely low income (bottom
half of those in income poverty at 60 per cent threshold), in combination with severe material
deprivation (in the bottom quintile with respect to both adult and child necessities).The
poverty permutations and mean income for a one-child couple are presented in Table 2.
Table 2: Poverty permutations and mean income
Poverty permutation Mean income for a one-
child couple family (£)*
Per cent
of children
Not in poverty
- neither income poor nor deprived
- not income poor, some material deprivation
- income poor, no material deprivation
426
514
377
160
78.3
52.0
11.3
15.0
Non-severe poverty
- non-severe income poverty and deprivation
- income poverty and deprivation, one of
which is severe
193
211
179
17.7
7.6
10.1
Severe poverty (severe income poverty and severe deprivation)
112 4.0
Base Population: All children (n=16012) in 2004-5 FRS
Those in severe poverty have extremely low disposable household income averaging only
£112 per week for a one-child couple family, compared to £426 for those not in poverty.
Those classified as being in severe poverty have substantially lower average disposable
income than the other sub-groups, with the exception of those classified as having severe
income poverty with non-severe or no material deprivation. These sub-groups, especially
those having no deprivation are likely to comprise those for whom reliable income measures
are not available. Further examination shows that those in severe income poverty but not
9
deprived comprise a disproportionately high proportion of the self-employed (see Annex C), a
group prone to income measurement errors. For instance 35 per cent of children in severe
income poverty but not deprived have self-employed parents, compared to only 13 per cent
for all children. It is also possible that some of those with no deprivation but low income
could be in a transitional stage of becoming poor (Gordon et al 2000).
We examine in Tables 3a and 3b the extent to which families of children in severe poverty
lack specific adult-related or child-related necessities. Children in severe poverty fair rather
poorly on each of the specific adult-related and child-related deprivation items. The data
highlight the extent of deprivation that children classified as severely poor are experiencing:
89 per cent live in households that cannot afford regular savings of £10 a month or more; 86
per cent live in households that cannot afford to replace worn furniture; 78 per cent live in
households that cannot afford to repair electrical goods; and 76 per cent live in households
without content insurance.
Table 3a: Percent of children whose families cannot afford specific adult-related necessities.
Item
Not in
poverty
Non-severe
poverty
Severe
poverty
A holiday away from home for at least one week a year 25.8 82.6 95.7
Friends or family around for a drink or meal at least once a
month
8.8 42.8 67.5
Two pairs of all weather shoes for all adults in the benefit
unit
4.0 31.1 46.1
Enough money to keep your home in a decent state of
decoration
9.9 50.1 68.4
Household content insurance 7.0 56.2 76.0
Make regular savings of £10 a month or more for rainy days
or retirement
29.2 83.4 89.2
Replace any worn out furniture 18.8 76.2 86.3
Replace or repair electrical goods such as refrigerator or
washing machine when broken
10.5 63.8 77.8
Have a small amount of money to spend each week on
yourself (not on your family)
21.5 75.6 88.5
Have a hobby or leisure activity 10.5 47.0 58.6
Unweighted cases 12394 2979 639
Base Population: All children (n=16012) in 2004-5 FRS
10
Table 3b: Percent of children whose families cannot afford specific child-related necessities.
Item Not in
poverty
Non-severe
poverty
Severe
poverty
A family holiday away from home for at least one week a
year
19.4 74.8 91.7
Enough bedrooms for each child of 10 or over of a
different sex to have their own bedroom
10.9 35.7 52.0
Leisure equipment such as sports equipment or a bicycle 2.8 22.2 61.7
Celebrations on special occasions such as birthdays,
Christmas or other religious festivals
1.3 11.8 37.9
Go swimming at least once a month 4.3 31.1 56.8
Do a hobby or leisure activity 2.5 20.8 46.9
Have friends around for tea or snacks at least once a
fortnight
3.0 22.9 56.1
Go to toddler group/ nursery/ playgroup at least once a
week (for children under 6 not attending primary or
private school
3.2 15.4 35.5
Go on school trips (for those over 6, or under 6 and
attending primary or private school)
2.1 17.3 43.3
Unweighted cases 12394 2979 639
Base Population: All children (n=16012) in 2004-5 FRS
Characteristics of children in severe poverty
The proportion of children in severe poverty ranges from a low of about two per cent in South
England (South East and South West) to a high of about nine per cent in London (Figure 1).
Other regions with above average levels of severe child poverty are the Midlands (West and
East Midlands) and Wales. It is important to note that the average housing costs are highest in
London and South East, hence, these regions would be expected to show lower poverty levels
if income was based on a ‘before housing cost’ measurement. On the other, Northern Ireland
has considerably lower housing costs compared to the other regions, hence, would show
higher poverty levels, relative to the other regions, if income was based on a ‘before housing
cost’ measure. Although an ‘after housing cost’ is our preferred measure as explained earlier,
proponents of a ‘before housing cost’ income measure may argue that the impact of higher
housing is to some extent picked up in the deprivation measure (see for example Willits,
2006) since those with high housing costs cannot afford to buy items and activities.
11
Figure 1 Regional variations of child poverty ranked by increasing severe child poverty levels
83 84 84 83 79 76 76 80 75 79 7667
15 14 13 15 18 20 20 17 21 16 1924
2 2 3 3 3 3 4 4 5 5 5 9
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Sou
th w
est
Sou
th W
est
Eas
tern
North
ern Ir
eland
Yor
ks a
nd H
umbe
rside
North
-West
& m
erse
yside
North
Eas
t Eng
land
Sco
tland
Wale
s
Eas
t Midland
s
West
Midlands
Lond
on
Pe
r c
en
t o
f c
hil
dre
n
Not in poverty Non-severe poverty Severe poverty
The bivariate distribution of child poverty by socio-economic factors show a strong
association between economic activity of parents and severe child poverty status (Table 4). As
might be expected, children in severe poverty are highly likely to have workless parents and
unlikely to have parents in full-time work. The majority (69 per cent) of children in severe
poverty have workless parents, compared to 57 per cent of children in non-severe poverty and
only eight per cent of children not in poverty. Conversely, the proportion of children in severe
poverty who have parents in full-time work is considerably lower that that of children in non-
severe poverty or not in poverty.
It is interesting to note that the low economic activity among parents of children in severe
poverty is not matched with levels of benefit receipt. Children in severe poverty are generally
less likely to be in families in receipt of means tested benefits (except Jobseekers Allowance)
compared to those in non-severe poverty. In particular, children in severe poverty were
considerably less likely to be in families receiving child tax credit (CTC) or working tax
credit (WTC), compared to those in non-severe poverty. While the lower receipt of WTC
among families of children in severe poverty might be explained by the higher proportion of
workless parents among this group, the lower receipt of CTC is surprising since almost all
families in this group would be eligible for CTC since they have dependent children and are
on low income. We have assumed that all families receiving Income Support also received
CTC since some families who were in receipt of Income Support prior to the introduction of
tax credits and were still so doing in 2004-05 had not yet been ‘migrated’ to CTC as
originally planned and continued to receive a single Income Support payment which did
include CTC. The fact that even after this adjustment a lower proportion of children in severe
poverty than those in non-severe poverty were in families receiving CTC, coupled with an
overall higher proportion not being in receipt of any of the above benefits or tax credits,
suggests that take-up of benefits might be an issue for families of children in severe poverty.
12
Table 4: Characteristics of children in severe poverty Column per cent
Severe child poverty status Characteristic Not in
poverty Non-severe
poverty Severe
poverty
All children
Economic activity of parents - Self employed - Couple or single: all in full-time work - Couple: one FT one PT work - Couple: one FT, one unemployed - Couple or single: PT work, no FT - workless
14.7 20.7 27.8 19.2 9.7 7.9
5.8 4.0 4.4
13.4 15.8 56.6
4.1 0.8 0.9 9.4
15.9 68.9
12.7 17.0 22.6 17.8 11.0 18.9
Benefit receipt - Disability living allowance - Jobseeker’s allowance - Incapacity benefit - Income support - Working tax credit - Child tax credit
6.2 0.7 2.5 5.7
14.7 64.2
8.8 4.6 7.2
50.5 19.1 88.6
3.4 7.2 6.7
44.5 10.6 75.2
6.6 1.6 3.5
15.2 15.3 68.9
Age mother left education - Before 16 years - At 16 years - After age 16 years
6.6
41.9 51.5
18.7 52.4 28.9
25.9 45.1 29.0
9.5
43.9 46.6
Mother’s educational qualification - No qualification - Non-degree qualification - Degree level or above qualification
12.6 66.4 21.0
38.2 57.9 3.9
49.0 48.0 3.0
18.6 64.1 17.3
Housing tenure - Own outright - Mortgage - rent
10.2 69.8 20.0
4.7
22.0 73.3
3.3
16.2 80.6
9.0
59.2 31.9
Parents have savings/assets 30.3 3.9 1.7 24.5 Single parent 16.9 52.4 47.4 24.4 Number of children in family
- One child - 2 children - 3 children - 4 or more
25.2 46.9 19.7 8.2
22.1 35.6 24.2 18.1
26.4 33.7 19.8 20.1
24.7 44.4 20.5 10.4
Age of child - 0-4 - 5-9 - 10-14 - 15-19 years
25.1 27.4 31.0 16.4
32.1 25.7 27.7 14.4
34.8 20.0 27.1 18.1
26.7 26.8 30.3 16.1
Age of mother - 16-24 - 25-34 - 35-44 - 45 years or older
3.2
28.0 53.0 15.8
14.2 39.7 36.7 9.4
14.8 30.4 43.4 11.4
5.6
30.2 49.7 14.5
Ethnic background - White - mixed/other - Asian - Black
90.8 2.2 4.6 2.3
82.3 3.6 9.7 4.6
62.9 8.7
20.1 8.3
88.2
2.7 6.1 2.9
Disabled adult present in family 18.7 33.4 34.2 21.9 Disabled child present in family 12.8 17.6 15.4 13.8 Unweighted cases 12394 2979 639 16012
13
There is a strong association between parent’s educational attainment and severe child
poverty. A considerably higher proportion of mother of children in severe poverty had no
qualification (49 per cent), compared to mothers of children in non-severe poverty (38 per
cent) or not in poverty (13 per cent). Correspondingly, only three percent of mothers of
children in severe poverty had degree level qualifications, compared to 21 per cent of mothers
of children not in poverty. The patterns for age of leaving full-time education are consistent
with those of educational attainment, with children in severe poverty having a considerably
higher proportion of mothers leaving full-time education before age 16 years (26 percent),
compared to those in non-severe poverty (19 per cent) or not in poverty (7 per cent). It is
possible that the low educational attainment of parents of children in severe poverty might
contribute to the low take-up of benefits noted in the preceding section.
As might be expected, children in severe poverty were more likely to: live in tented
accommodation; have families with no savings or assets: have lone parent families; or come
from large families with at least four children. However, the relationship between age of
children or age of parents and experience of severe child poverty was not straightforward, but
there was some indication that younger age of mother was associated with higher experience
of child poverty, both severe and non-severe.
There was a strong association between ethnic background and experience of severe child
poverty. Children of Asian ethnic origin, and to a lesser extent, those of other ethnic minority
backgrounds comprise a disproportionately high proportion of children in severe poverty. A
considerably higher proportion of children in severe poverty are from Asian and Asian British
ethnic origin (20 per cent) than those in non-severe poverty (10 per cent) or not in poverty (5
per cent). Although the majority of children in severe poverty are of White ethnic origin (63
per cent), the proportions among those in non-severe poverty (82 per cent) or those not in
poverty (91 per cent) are significantly higher This suggests that children of White ethnic
origin are less likely to experience severe poverty compared to those of ethnic minority
background..
Finally, the presence of disabled adults in the family is strongly associated with the
experience of severe child poverty, but the same does not apply to presence of disabled
children. About one third of children in severe poverty (or non-severe poverty) were in
families where there were disabled adults, compared to 19 per cent of children not in poverty.
The fact that it is the disability of adults, rather than that of children that is strongly associated
with the experience of severe child poverty is not surprising since it is adult family members
who usually engage in economic activities, hence, their disability is likely to impact more
negatively on the families’ financial resources.
Risk factors of severe child poverty
The characteristics of children in severe poverty discussed in the preceding sections provide a
useful overall picture of the profile of children in severe poverty but do not tell us what the
precise risk factors of severe child poverty are. This sub-section examines the risk factors of
severe child poverty, controlling for the effect of other important factors. We recognize that
the associations described above may be influenced by the effect of other important related
factors. For example, parents with lower educational attainment may be less likely to
participate in labour force, hence, it is not straightforward to establish from the bivariate
associations whether it is educational attainment or labour force participation that is the
important risk factor in severe child poverty. The multinomial logistic regression analysis
presented in Table 5 allows us to examine the factors associated with higher odds of severe
child poverty, while holding the other important factors constant.
14
Table 5 Risk factors of severe and non-severe child poverty, relative to not being in
poverty
Factor Non-severe
poverty
Severe
poverty
Region (S & E England)
- North/ Yorks/ Humberside
- Midlands
- London
- Wales
- Scotland
- Northern Ireland
0.82*
0.92
1.25*
1.15
0.85
0.92
0.76
1.53*
1.67*
1.75*
1.08
1.38
Economic activity of parents (workless)
- Self employed
- Couple or single: all in full-time work
- Couple: one FT one PT work
- Couple: one FT, one unemployed
- Couple or single: PT work, no FT
0.34*
0.15*
0.15*
0.43*
0.60*
0.06*
0.01*
0.01*
0.07*
0.29*
Benefit receipt (no receipt)
- Disability living allowance
- Jobseeker’s allowance
- Incapacity benefit
- Income support
- Working tax credit
- Child tax credit
0.29*
2.65*
1.36*
2.84*
1.01
1.29*
0.08*
0.81
0.75
0.54*
0.41*
0.80
Age mother left education (post 16 )
- Before 16 years
- At 16 years
1.32*
0.96
1.96*
1.01
Mother’s educational qualification (degree )
- No qualification
- Non-degree qualification
3.45*
2.54*
6.27*
4.00*
Housing tenure (rent)
- Own outright
- Mortgage
0.31*
0.38*
0.07*
0.22*
Parents have savings/assets (no) 0.31* 0.14*
Single parent (couple) 1.32* 0.71*
Number of children in family (4 or more)
- One child
- 2 children
- 3 children
0.55*
0.60*
0.81*
0.66*
0.55*
0.57*
Age of child (15-19 years)
- 0-4
- 5-9
- 10-14
0.81*
0.66*
0.69*
0.80
0.49*
0.59*
Age of mother (45 years or older)
- 16-24
- 25-34
- 35-44
2.18*
1.37*
1.13
1.82*
1.08
1.56*
Ethnic background (White)
- mixed/other
- Asian
- Black
1.40*
2.39*
1.33
2.82*
6.08*
2.51*
Disabled adult present in family (no) 1.48* 1.49*
Disabled child present in family (no) 0.90 0.95 * - significant at 5 per cent level.
Reference categories are given in italics in brackets.
15
A multinomial logistic model enables us to retain the three categories of the outcome variable:
severe poverty; non-severe poverty; and not in poverty. Table 5 gives the risk factors of
severe and non-severe poverty, relative to not being in poverty. (The per cent distribution of
severe and non-severe child poverty by factors included in the regression analysis is given in
Annex D). A relative risk factor greater than 1.00 implies that the factor is associated with
higher experience of child poverty than the reference category, while a value less than 1.00
implies a lower risk.
The results of the regression analysis are largely consistent with the bivariate associations
described in the preceding sections, confirming a relatively high risk of severe poverty among
children:
• living in London, Wales and the Midlands;
• with workless parents;
• whose parents have low educational qualifications;
• living in rented accommodation;
• whose parents have no savings /assets;
• in large families of four or more children;
• from ethnic minority groups, especially of Asian origin; and
• in families with disabled adult(s).
As might be expected, most of these risk factors apply to non-severe child poverty as well, but
to a noticeably less extent. For instance, the relative risk factors of severe poverty for children
with workless parents (i.e. compared to those whose parents are engaged in economic activity
as full-time of part-time employees or self-employed) are more than double the risk factors of
non-severe poverty. Children whose mothers have no qualification are 6.3 times and 3.5 times
more likely to be in severe and non-severe poverty, respectively (as opposed to not being in
poverty) than those whose mothers have degree level qualification. Also, the risk of severe
child poverty among ethnic minority groups is considerably higher (about double) than the
risk of non-severe poverty.
DISCUSSION AND CONCLUSIONS
This study has adopted a measure of severe child poverty that incorporates both low income
and material deprivation. Children are classified as being in ‘severe’ poverty if they are in
households with very low income (i.e. ‘poorest poor’ – bottom half of income poor at
conventional 60% threshold), in combination with ‘severe’ material deprivation (deprived of
both adult and child necessities – i.e in the bottom quintile with respect to both adult-related
and child-related necessities). Those in households below 70 per cent of median income, in
combination with either adult or child deprivation are classified as being in non-severe
poverty. The remaining are classified as not being in poverty. Based on this definition, about
four per cent of children in the UK (0.52 million) are classified as being in severe poverty.
This is a fairly conservative estimate of severe child poverty in the UK with more stringent
criteria for classification of severe child poverty than used in previous studies (see for
example, Magadi and Middleton, 2007). The sub-group of children classified as being in
severe poverty show relatively high levels of deprivation on each of the specific child-related
or adult-related necessities.
There are significant regional variations in the experience of severe child poverty in the UK,
ranging from two per cent in the South (East and West) of England to nine per cent in
London. The analysis of characteristics of children in severe poverty largely conform to
expected patterns, increasing our confidence that the adopted severe child poverty measure is
16
indeed identifying the most disadvantaged children. The results show a relatively high risk of
severe poverty among children: living in London; with workless parents; whose parents have
low educational attainment; living in rented accommodation; whose parents have no savings
/assets; in large families of four or more children; from ethnic minority groups, especially of
Asian origin; and in families with disabled adult(s). However, the patterns with respect to the
parents’ age or the age of child are not straightforward, while interesting results are observed
with respect to benefit receipt and lone parenthood.
The results of the regression analysis suggest that older children aged 15-19 years are
significantly more likely to experience severe poverty than the younger age groups. A detailed
examination of the experience of severe child poverty by child’s age (not shown) suggests
that it is the 14-15 year olds who are at the highest risk of severe poverty. This may be partly
due to the fact that while benefits moved away from weighting by age, equivalence scales
have not changed, assigning children aged 14 years or older greater weight. The association
between mother’s and severe child poverty does not show a straightforward pattern, but there
is an indication that children of young mothers aged 16-24 years are the most likely to
experience severe or non-severe poverty.
One interesting pattern relates to children with lone parents who are more likely to be in non-
severe poverty, but less likely to be in severe poverty compared to those with couple parents,
when other important factors such as economic activity are controlled for. The apparent
strong association between having a lone parent and the experience of severe child poverty
observed in the bivariate association is largely due to the low economic activity of lone
parents. In fact, about half of children with lone parents (52 per cent) are in workless families,
while another 27 per cent of lone parents are in part-time work. When economic activity and
other important factors are held constant, children of lone parents are less likely to experience
severe poverty than those of couple parents. However, a recent study based on separate
analyses of income poverty and deprivation suggests that the equivalence scales used in the
official income-based measures of poverty tend to overstate the extra resources needed by
couples with children, relative to lone parents, to escape material deprivation (Brewer et al.,
2008).
It is important to note that since the demographic factors relating to lone parenthood, mother’s
age, age of youngest child and number of children are all interrelated, simultaneously
controlling for the effects of these factors in the model is likely to modify the risk factors
associated with specific factors. For instance, further examination of the data (not shown)
shows that lone parents are more likely than couple parents to be in the youngest mothers age
group (16-24 years old), a group associated with a higher risk of poverty. This means that the
risk of poverty for lone parents will appear reduced when the effect of mother’s age is
controlled for.
The regression results reveal particularly striking patterns with respect to benefit receipt. The
link between low take-up of benefits and the experience of severe child poverty warrants
special attention, especially since the same patterns do not apply to the experience of non-
severe poverty which does show the expected positive association with respect to receipt of
means-tested benefits such as Income Support and Jobseekers Allowance. The fact that non-
receipt of Working Tax Credit (after controlling for economic activity) and non-receipt of
Income Support are associated with significantly higher experience of severe child poverty
may suggest that this is a particularly vulnerable sub-group. These results might suggest that
benefit take-up is possibly an issue for families experiencing severe child poverty that is
worth further investigating. The fact that this group is associated with particularly low
educational attainment might suggest a lack of knowledge of benefit entitlement or the skill to
make a successful application among those eligible. Given the very low income of families
with children in severe poverty, one might expect most of these families to be eligible for the
17
means-tested benefits. On the other hand, it is also possible that a disproportionately high
proportion of children in severe poverty are in households not eligible for benefit receipt,
possibly due to such factors as residency status.
Nevertheless, the findings with respect to the Disability Living Allowance (DLA) is not
surprising. The fact that those in receipt of the DLA are highly unlikely to be in severe or
non-severe poverty may be attributable to the fact that the income equivalence scales do not
take into account the increased cost of living due to disability. Furthermore, given the amount
of time require to complete the FRS survey, it is possible that potential respondents caring for
disabled children or adults will be less likely to participate in the survey, resulting in a
response bias for this group which is not currently corrected by the standard FRS non-
response weights. In the absence of reliable adjustments for the increased cost of living due to
disability, coupled with possible non-response bias for this group, we suggest that results
relating to receipt of DLA be interpreted with caution.
The link between non-receipt of means-tested benefits and the experience of severe child
poverty has important policy implications. The current policy initiatives to reduce child
poverty in the UK through provision of various mean-tested benefits or tax credits are
unlikely to work for this group. Effective poverty alleviation efforts for this particularly
disadvantaged sub-group of the population would require further empirical evidence to better
understand the prevailing circumstances (e.g reasons for non-receipt of benefits).
Incorporating severe child poverty dimension within the on-going government child poverty
measures to monitor progress (DWP, 2003) would no doubt be an important step towards
such efforts.
18
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20
Annex A: Material Deprivation questions in FRS 2004 In the FRS 2004, respondents were asked: (a) Adult /parents deprivation “For each of the following things please tell me the number from the showcard which
best explains whether [you and your family /you and your partner /you] have it or not …”
Responses on the showcard were:
(1) We/I have this (2) We/I would like to have this, but cannot afford it at the moment (3) We/I do not want/need this at the moment (4) Does not apply
- a holiday away from home for at least one week a year, whilst not staying with
relatives at their home? - Friends or family around for a drink or meal at least once a month? - Two pairs of all weather shoes for [name all adults in the benefit unit]? - Enough money to keep your home in a decent state of decoration? - Household content insurance - Make regular savings of £10 a month or more for rainy days or retirement - Replace any worn out furniture - Replace or repair electrical goods such as refrigerator, or a washing machine when
broken - Have a small amount of money to spend each week on yourself (not on your family)? - Have a hobby or leisure activity/
(b) Child deprivation “For each of the following things please tell me the number from the showcard which
best explains your child/children have it or not …” Responses on the showcard were:
(1) Child(ren) has/have this (2) Child(ren) would like to have this, but we cannot afford it at the moment (3) Child(ren) do not want/need this at the moment (4) Does not apply
- a family holiday away from home for at least one week a year? - Are there enough bedrooms for each child of 10 or over of a different sex to have their
own bedroom? - Leisure equipment such as sports equipment or a bicycle? - Celebrations on special occasions such as birthdays, Christmas or other religious
festivals? - Go swimming at least once a month? - Do a hobby or leisure activity? - Friends around for tea or snacks at least once a fortnight? - Go to toddler group/ nursery/ playgroup at least once a week (for children under 6
not attending primary or private school? - Go on school trips (for those over 6, or under 6 and attending primary or private
school)
21
Annex B: Principal Components Analysis (PCA) results – PCA loadings Table B1: PCA Loadings for Adult deprivation items Item Loading 1 A holiday away from home for at least one week a year 0.692 Friends or family around for a drink or meal at least once a month 0.574 Two pairs of all weather shoes for all adults in the benefit unit 0.684 Enough money to keep your home in a decent state of decoration 0.656 Household content insurance 0.579 Make regular savings of £10 a month or more for rainy days or retirement
0.681
Replace any worn out furniture 0.568 Replace or repair electrical goods such as refrigerator or washing machine when broken
0.778
Have a small amount of money to spend each week on yourself (not on your family)
0.756
Have a hobby or leisure activity 0.683 Extraction method: Principal Components Analysis; One component extracted 1 – Equivalent to bivarite correlations between specific items and the extracted component
Table B2: PCA Loadings for Child deprivation items
Item Loading 1 A family holiday away from home for at least one week a year 0.413 Enough bedrooms for each child of 10 or over of a different sex to have their own bedroom
0.191
Leisure equipment such as sports equipment or a bicycle 0.624 Celebrations on special occasions such as birthdays, Christmas or other religious festivals
0.685
Go swimming at least once a month 0.588 Do a hobby or leisure activity 0.721 Have friends around for tea or snacks at least once a fortnight 0.632 Go to toddler group/ nursery/ playgroup at least once a week (for children under 6 not attending primary or private school
0.675
Go on school trips (for those over 6, or under 6 and attending primary or private school)
0.599
Extraction method: Principal Components Analysis; One component extracted 1 – Equivalent to bivarite correlations between specific items and the extracted component
22
Annex c Characteristics of children in severe income poverty but not deprived, compared to all children
Column per cent Characteristic*
Severe income poverty but not
deprived
All Children
Economic activity of parents
- Self employed - Couple or single: all in full-time work - Couple: one FT one PT work - Couple: one FT, one unemployed - Couple or single: PT work, no FT - workless
34.8 4.8 7.4 13.9 14.1 25.0
12.7 17.0 22.6 17.8 11.0 18.9
Benefit receipt - no - yes
60.2 39.8
70.9 29.1
Mother’s educational qualification - No qualification - Non-degree qualification - Degree level or above qualification
23.5 57.9 18.6
18.6 64.1 17.3
Family type - Single parent - Couple parents
21.3 78.7
24.4 75.6
Number of children in family - One child - 2 children - 3 children - 4 or more
18.0 43.8 17.3 21.0
24.7 44.4 20.5 10.4
Age of child - 0-4 - 5-9 - 10-14 - 15-19 years
21.0 26.6 31.7 20.7
26.7 26.8 30.3 16.1
Age of mother - 16-24 - 25-34 - 35-44 - 45 years or older
2.3 26.7 54.6 16.5
5.6
30.2 49.7 14.5
Ethnic background - White - mixed - Asian - Black - Chinese or other group
84.4 2.0 8.6 3.7 1.2
88.2 1.0 6.1 2.9 1.7
Disabled child present in family - Yes - No
10.4 89.6
13.8 86.2
Unweighted cases 752 16012 * - only significant factors (p<0.05) are included
23
Annex D Per cent distribution of non-severe and severe child poverty in the UK by background characteristics
Row per cent Severe child poverty status Characteristic
Not in poverty
Non-severe poverty
Severe poverty
Unweighted Cases
Economic activity of parents - Self employed - Couple or single: all in full-time work - Couple: one FT one PT work - Couple: one FT, one unemployed - Couple or single: PT work, no FT - workless
90.6 95.6 96.4 84.6 68.9 32.7
8.1 4.2 3.5
13.3 25.3 52.8
1.3 0.2 0.2 2.1 5.8
14.5
2019 2679 3472 2756 1780 3306
Benefit receipt $ - Disability living allowance - Jobseeker’s allowance - Incapacity benefit - Income support - Working tax credit - Child tax credit - No benefit
74.3 32.0 55.5 29.4 75.2 72.9 92.0
23.6 50.2 36.8 58.9 22.0 22.7
5.1
2.1
17.8 7.7
11.7 2.8 4.4 2.9
1140 271 612
2669 2410
11204 4473
Age mother left education - Before 16 years - At 16 years - After age 16 years
54.4 74.8 86.5
34.7 21.1 11.0
10.9
4.1 2.5
1514 7025 7473
Mother’s educational qualification - No qualification - Non-degree qualification - Degree level or above qualification
53.1 81.1 95.4
36.3 15.9 3.9
10.5 3.0 0.7
3089 10147 2776
Housing tenure - Own outright - Mortgage - rent
89.3 92.3 49.2
9.3 8.6
40.7
1.5 1.1
10.1
1388 9126 5498
Parents have savings/assets - no - yes
72.3 96.9
22.5 2.8
5.2 0.3
12151 3861
Family type - Single parent - Couple parents
54.2 86.1
38.0 11.1
7.8 2.8
4203
11809
Number of children in family - One child - 2 children - 3 children - 4 or more
79.9 82.8 75.2 61.6
15.8 14.2 20.9 30.7
4.3 3.0 3.9 7.7
3652 7022 3432 1906
Age of child - 0-4 - 5-9 - 10-14 - 15-19 years
73.6 80.1 80.2 79.7
21.2 16.9 16.2 15.8
5.2 3.0 3.6 4.5
4304 4578 4686 2444
Age of mother - 16-24 - 25-34 - 35-44 - 45 years or older
44.6 72.7 83.5 85.4
44.8 23.2 13.1 11.4
10.6 4.0 3.5 3.1
829
4923 7899 2361
Ethnic background - White - mixed/other - Asian - Black
80.7 64.2 59.1 61.2
16.5 23.2 27.7 27.5
2.9
12.6 13.1 11.3
14368
393 801 450
Disabled adult present in family - Yes - No
66.8 81.6
27.0 15.1
6.2 3.4
3520
12492
Disabled child present in family - Yes - No
73.0 79.2
22.6 16.9
4.5 3.9
2267
13745
All cases 78.3 17.7 4.0 16012