Evaluating the Pro-Poorness of Income Transfers: Does the Choice of Poverty Indicator Influence the Assessment?-

Dr. Geranda Notten, University of Ottawa

The pro-poorness of income transfers depends on a complex mix of social protection programs; each having their own purpose, design and implementation. However, an assessment of the poverty reduction impact of such programs also depends on the indicator that is used to evaluate pro-poorness. Income is by far the most used welfare indicator for such an exercise. However, income indicators are now increasingly supplemented with a range of non-income indicators in areas such as material deprivation. This paper investigates how influential the choice of welfare indicator is when evaluating the poverty reduction impact of income transfers. It evaluates the pro-poorness of income transfers using the official EU income poverty and material deprivation indicators, focusing on transfers that are relevant for families with working-age adults (family, unemployment, welfare and housing transfers). These transfers are compared between six EU
member states (France, Germany, Ireland, United Kingdom, Sweden and the Netherlands). The pro-poorness of a transfer increases as i. the number of poor households receiving the transfer increases (coverage), ii. the transfer to poor households increases (adequacy), and iii. the share of total program transfers distributed to poor households increases. The study involves the analysis of survey data (quantitative) and program information from various sources (qualitative): the EU-SILC data are used to estimate the pro-poorness of these transfer categories while information on the characteristics of the transfer programs is required to understand program design, to check the validity of the empirical findings and to assess the role of program design on outcomes in terms of pro-poorness. Preliminary analyses indicate that the choice of poverty indicator influences the assessment of the pro-poorness of income transfers. 'Last resort' type of income transfers, for example, are assessed as more pro-poor when evaluated with a material deprivation indicator than with an income poverty indicator. These finding suggests that the currently dominant use of income poverty indicators to assess the (cost)-effectiveness of programs that aim to reach the poor and reduce poverty needs to be reconsidered

About the speaker
Dr. Geranda Notten is assistant professor at the Graduate School of Public and International Affairs (Canada). She specializes in poverty and social policy research and has been working on developed and developing countries including the European Union, United States, Russia and Congo Brazzaville. In her current research she studies children's living conditions in Germany, France, the Netherlands and the United Kingdom. The project focuses on the breadth of deprivation: to what degree does a child simultaneously experience deprivations across domains of well-being, how strongly are these deprivation outcomes related to income poverty and how effective are social protection transfers in reaching deprived children and their families? This research contributes to knowledge relevant for the identification of vulnerable groups of children and their coverage by various social protection programs. It also informs on the appropriate way to define poverty for children and it tests poverty measures that take cumulative deprivations into account. Geranda has been a visiting researcher at CEPS/INSTEAD (Luxembourg), the Kennedy School of Government (United States) and at the Maastricht Graduate School of Governance (Netherlands). She further worked on consultancy projects for the World Bank, European Union and UNICEF on countries such as Mauritius, Congo Brazzaville and Russia. Geranda holds a PhD at Maastricht Graduate School of Governance from Maastricht University.

Venue: Conference Room

Date: 01 May 2012

Time: 12:30 - 13:30  CET