Bruce Bradbury

Family Size Equivalence Scales and Survey Evaluations of Income and Well-Being

This article examines different methods for determining relative need (economic resources) as it varies with different family composition. The question is how to equalize standard of living among families of varying composition for social policy purposes. Equivalence scales are one measure for comparing economic resources of different families. Income is the usual summary measure of the ability of people to consume goods and services without depleting assets. An equivalence scale could account for housing quality wealth intergenerational transfers state services and social participation. In this discussion only income equivalence scales are considered. Indirect equivalence scales are identified as budget-related expenditure-related and politically-related. These measures are based on administrative data. The most widely used scales for setting poverty lines for different families is the budget approach. Tax and transfer systems include equivalency scales within their structure. The proportion of income spent on necessities is used as a measure of well-being. Direct measures of well-being are identified as ones that evaluate directly the cost or utility functions. Data are based on surveys of peoples subjective evaluations of welfare or utility levels. Four different direct approaches are examined: evaluations of ones own family situation evaluations of a hypothetical family situation responses to welfare levels or responses to income levels. Methods are described for computing the relationship between income family composition and well-being for each of these four approaches. A selection of simple equivalence scales using these four methods is presented and compared to the OECD suggested scale the Australian benefit scale and the average of scales using indirect methods. Key assumptions and limitations of methods are viewed as important in understanding measures. It is argued that reference group effects may be systematically related to family type and this link may produce estimation biases. The authors suggest that further research be conducted on research methods and calculation of equivalence scales.

The Dynamics of Child Poverty in Industrialised Countries

A child poverty rate of ten percent could mean that every tenth child is always poor, or that all children are in poverty for one month in every ten. Knowing where reality lies between these extremes is vital to understanding the problem facing many countries of poverty among the young. This unique study goes beyond the standard analysis of child poverty based on poverty rates at one point in time and documents how much movement into and out of poverty by children there actually is, covering a range of industrialised countries - the USA, UK, Germany, Ireland, Spain, Hungary and Russia. Five main topics are addressed: conceptual and measurement issues associated with a dynamic view of child poverty; cross-national comparisons of child poverty rates and trends; cross-national comparisons of childrens movements into and out of poverty; country-specific studies of child poverty dynamics; and the policy implications of taking a dynamic perspective.

Some Australian Evidence on the Consensual Approach to Poverty Measurement

Estimates of poverty in Australia have relied exclusively on the Henderson poverty line, despite extensive criticism of its relevance to contemporary Australian conditions. This paper analyses data from Morgan Gallup Poll (MGP) surveys on the minimum income required by an Australian family of four to keep in health and live decently in order to assess community views on minimum income levels required in Australia. Analysis of how the average response to the MGP question has changed over the last four decades suggests that community views of adequate minimum income levels are adjusted upwards in line with average income levels. This evidence suggests that Australians see poverty more in relative than absolute terms. Data from the July 1987 MGP survey are then used to derive a consensual poverty line based on responses to the minimum income question. The resulting poverty line is well above the Henderson poverty line. The survey data are then used to provide an estimate of poverty among families of four in July 1987 and to investigate some aspects of how family needs vary with family circumstances.

The development of young children of immigrants in Australia, Canada, the United kingdom, and the United States.

In spite of important differences in some of the resources immigrant parents have to invest in their children, and in immigrant selection rules and settlement policies, there are significant similarities in the relative positions of 4- and 5-year-old children of immigrants in Australia, Canada, the United Kingdom, and the United States. Children of immigrants underperform their counterparts with native-born parents in vocabulary tests, particularly if a language other than the official language is spoken at home, but are not generally disadvantaged in nonverbal cognitive domains, nor are there notable behavioral differences. These findings suggest that the cross-country differences in cognitive outcomes during the teen years documented in the existing literature are much less evident during the early years.

Child Poverty: A Review

The central message of this paper is that child poverty is much more complicated than just looking at income levels. In determining how a childs needs are met, it is important to consider how resources are shared and used within a household, the value of other services provided (eg child care, education) and the value of parental care.This review addresses five main questions: How should we define child poverty? Should it be a focus of policy concern? How should it be measured? What causes it? What policy strategies can be used to combat it?

Income and Separation

What factors are associated with marital separation? In particular, is there a ‘social class gradient’ for separation? This article addresses these questions using data from two large Australian longitudinal data sets. The main focus is on the association between income support status/family income and the probability of separation. We find that recipients of income support from government are more than twice as likely to separate as non-recipients of income support. De facto couples are more likely to separate than legally married couples, though separation rates within the de facto married population have more variation with income than among legally married couples. The relationship between separation and demographic and health characteristics is also explored and we find that couples where the husband has depressive symptoms are more likely to separate. The article concludes by discussing the potential explanations for the association between income and separation.

Time and the Cost of Children

This paper uses the “adult goods” method to estimate the full costs of children. Full costs include both expenditure and time costs. Adult personal time (comprising pure leisure, sleep and other personal care) is used as the adult good. Previous research has shown that the presence of children in the household leads to a reduction in adult personal time. This paper develops a simple economic model of the household to show how this information can be used to develop an equivalence scale for adult consumption that takes account of both the expenditure and time costs of children. Preliminary estimates using Australian data suggest a very large cost—much higher than that typically assumed for expenditure costs. The full cost of children declines with age, despite the expenditure cost rising. The paper discusses the limitations of the adult good method and the assumptions needed to draw welfare conclusions from these and other estimates of child costs.

Reviewing the Intertemporal Consistency of ABS Household Income Data through Comparisons with External Aggregates

No abstract available.

Youth Unemployment and Intergenerational Immobility

The personal and family characteristics of those teenage workers and unemployed teenagers who were living with one or both parents at the time of the 1981 census are described and analysed. The 1 per cent sample of household records released by the Australian Bureau of Statistics was the data source. Unemployment rates were much higher among teenagers of sole-parent families than among other teenagers. However, in the case of teenagers who lived with their mothers only, this could be attributed to their low family incomes rather than their family structures. Teenagers who lived with both parents also had high unemployment rates when family incomes were low. Among youth who lived with both parents, high unemployment probabilities were associated with parental disadvantages, even when the personal characteristics of the youth, such as their education levels, were controlled. It was concluded that unemployment distribution among 15- to 19-year-olds reflects intergenerational rigidities with respect to labour market status.

Poverty Traps in the Australian Social Security System

The term “poverty traps” refers to circumstances where the income tests in the Australian social security system trap social security recipients into dependence on Government income support. This paper describes the ways in which the income test interacts with the income tax rate scale and Medicare levy to produce high effective marginal tax rates, and provides evidence on the number of persons actually and potentially in the poverty trap. The paper also discusses factors other than income tests that may affect the decisions of social security recipients to engage in part-time work, and canvasses a range of policy options that may alleviate poverty traps for those of working age.