Academic journal article Australian Journal of Social Issues

The Changing Socio-Demographic Composition of Poverty in Australia: 1982 to 2004

Academic journal article Australian Journal of Social Issues

The Changing Socio-Demographic Composition of Poverty in Australia: 1982 to 2004

Article excerpt

Introduction

While there exists considerable Australian research documenting the extent of poverty--albeit with some variance in poverty measures employed by researchers--there has been comparatively little attention given to the investigation of the socio-demographic composition of poverty, and more particularly how this has evolved over recent decades. Yet this line of inquiry has the potential to provide valuable information on the identities of the income-poor and on trends in the relative incidence of poverty, information which can, for example, potentially challenge assumptions underpinning social policy formulation.

Hence the motivation for the current study, which draws on the public-release unit record files from the eleven ABS income surveys conducted over the period 1982 to 2004 to investigate the socio-demographic characteristics of persons in poverty. Specifically, I describe changes in the extent of poverty in the Australian community, and in the socio-demographic composition of those in poverty. I then consider the sources of the changes in the characteristics of the poor, identifying the roles played by broader changes in the socio-demographic composition of the population and by changes in the risks of poverty associated with socio-demographic characteristics. For example, growth in the proportion of the poor that is elderly can derive from growth in the proportion of the population who are elderly and can also derive from growth in the likelihood of poverty for elderly people.

The concept of poverty adopted for this study is one of relative socio-economic disadvantage, whereby the poverty threshold is a function of the income distribution. Specifically, the core analysis focuses on a half-median-income definition of the poverty threshold, which has been widely adopted internationally. The rationale for the relative concept of poverty is that absolute deprivation--inability to adequately sustain life--is not a significant feature of developed economies. As such, poverty is usually conceived as a situation of relative deprivation. Nonetheless, arguments may still be mounted for adopting an absolute standard that, while not at the minimum level required for survival, maintains the same purchasing power over time. Consequently, in describing changes in the extent of poverty, I consider several relative and absolute poverty measures in order to provide a more complete depiction of the evolution of the extent of poverty over the 1982-2004 period.

As with all research into poverty, it is to be expected that inferences will be sensitive to poverty definition and approach to measurement. However, compared with studies of absolute numbers in poverty, the study of changes in the composition of poverty is perhaps less susceptible to debate over the definitional and measurement issues that have given rise to much disagreement about the extent of poverty in Australia in recent years. (1) The concern of this study is with changes in the characteristics of those persons who occupy the 'lower end' of the income distribution. Inferences on compositional change are likely to be less sensitive to the precise criteria used to define 'lower end'--that is, the definition of poverty--than are inferences on the total number of people in poverty at a point in time. This contention is indeed supported by the examination of sensitivity of estimates to poverty definition that is undertaken in this study (reported in the Appendix), and it is also consistent with the finding by de Vos and Zaidi (1997) that estimated trends over time in the composition of the poor are much less sensitive to the equivalence scale adopted than are point-in-time estimates.

The plan of the article is as follows. In the following section I describe the data and poverty measure. Estimates of poverty rates based on this data and measure are presented for the 1982-2004 period, followed by description of the socio-demographic characteristics of persons in poverty. …

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