WP13/2008

How invariant is South African child poverty to the choice of equivalence scale or poverty measure?

Stellenbosch Working Paper Series No. WP13/2008

Author(s): Judith Streak, Derek Yu, Servaas van der Berg

JEL Classification: D31, I32

Keywords: Child poverty measurement, Adult equivalence scales, Social grants for children

Download:  PDF (412 KB)


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 of Woolard & Leibbrandt (2006) 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.