Poverty is an ongoing problem facing all societies, and there are many different ways of exploring the issue. On the one hand, there is concern with inequality, including the drivers behind the unequal allocation of advantage versus disadvantage. On the other hand, there is concern with measurement and definition. In the latter case, poverty defined in relative terms implies that no society will be without it.
The measurement of poverty raises important issues regarding how it should be conceptualised. With an increasing awareness that reliance on income alone as a measurement of poverty has many limitations, the issue of measurement is undergoing a multidimensional turn, integrating insights about the various ways in which life can be impoverished.
While poverty in the UK has declined since 2012 – when the UK had a higher poverty rate than most EU member states – progress is now at risk following policy changes in the 2017 Autumn Budget. The UK’s mixed record in tackling poverty should not come as a surprise: the integrated nature of wellbeing produces difficulties in evaluating poverty levels. The neglect of human life aspects, together with an over-emphasis on income, is certainly part of the problem. Thus, determining who the most deprived social groups are and in what ways they are experiencing deprivation is crucial for generating more effective poverty reduction initiatives and social protection interventions.
We explore this challenge in a study that attempts to shift the focus of societal development from an income-oriented approach to a people-centric one. We make the case for an anti-poverty UK agenda that gradually shifts towards an appreciation of the multidimensionality of well-being. In particular, this study concentrates on life domains that: are considered to be important for British society; guide the development of public policy; and enable empirical exploration. The four dimensions of poverty available in the European Union Statistics on Income and Living Conditions, which correspond to the concept of poverty as outlined above, are:
- general health,
- living standards,
- housing deprivation, and
- financial deprivation; three indicators for income, two indicators each for housing and health, and six indicators for living standards (see Table below).
Table 1. Dimensions of deprivation
The first set of indicators deals with living standards and draws on five needs that reflect a person’s possession of adequate resources to enjoy a decent standard of living. These needs are:
- consumption of meat/protein at least every other day;
- ability to provide adequate heating of a dwelling;
- ability to spend a week-long holiday away from home at least once a year;
- living in an area with good environmental quality;
- having no serious problems with the dwelling.
The analysis reveals that every household has a minimal acceptable diet, whereas crime and vandalism in the neighbourhood, as well as environmental pollution are identified as the most serious problems in this life dimension. In addition, as far as economically weak households are concerned, 27% of the population cannot afford to go on an annual holiday.
Financial deprivation, being central for almost every form of subjective poverty, is included as the second dimension. Three main indicators are taken as component proxies: capability to face unexpected expenses, arrears on hire/purchase instalments, or other loan payments. A valid concern here is that UK households seem to find it difficult to make ends meet. An equally interesting fact is that within the financial security dimension households are less able to cope with unexpected expenses. In 2016, around 38% of the population considered that their current income was too little to face unexpected expenses and 16% struggled to make ends meet.
The necessities most likely to be out of reach are those requiring either ready cash for emergencies or regular amounts of money for longer-term financial planning. The next set of multidimensional poverty indicators reflects financial stress related to housing facilities and households’ ability to pay rent, mortgage repayments, and utility bills. This is the most progressively growing category with 72% of the population perceiving housing costs as a burden.
The final focus of the multidimensional poverty indicators is on the area of health inequalities, particularly how much inequality in the health sector is associated with unequal socio-economic structure. Three health indicators are included: (i) access to medical services (ii) access to dental services, and (iii) limitations in daily activity due to health problems. The third indicator uses data on the persons’ self-assessment of whether they are hampered in their usual activity by any ongoing physical or mental health problem, illness or disability. The analysis reveals that 4.5% of the population have unmet medical needs, and nearly 4.1% have unmet dental health needs. Limitations in activities due to health problems reach worrying levels: 22% of the population aged 16 and over experience long-standing limitations in their usual activities due to health problems. The final health indicator uses data on a person’s self-assessment of whether they are hampered in their daily activities by any ongoing physical or mental health problems, illness or disability. In the UK, 22% of the population report severe long-standing limitations. This is one of the highest shares of people reporting severe long-standing limitations within Europe.
In an attempt to allow policymakers to identify economically deprived households more accurately, we analyse the severity of hardships experienced in the UK to explore if some socio-economic categories exhibit higher risks of poverty in multiple life domains. This opens several lines of debate in terms of policy implications and assesses whether living conditions have been declining.
The findings suggest attention needs to be given to equity considerations, but also to gendered inequality. Across the dimensions of income poverty and multidimensional poverty, there is a relatively steady gender effect, and women are more likely than men to experience deprivation in multiple life domains. Moreover, households are partitioned according to the marital status of the household head in order to document the relationship between marital status and multidimensional poverty. The results suggest that, compared to married couples, for instance, singles with or without children have an especially higher probability of being deprived in multiple life domains.
In addition, owner-occupancy, which is still most people’s aspiration in Britain, is generally associated with better living conditions. That can be attributed to its association with accumulation, or capital-rich/cash-poor owner occupiers. Indeed, owner occupation has been found to decrease the probability of experiencing deprivation in multiple dimensions. Of course, these results are suggestive rather than definitive, but they do point towards the hypothesis that the outcomes of multidimensional poverty are at least mediated by differences in owner-occupancy. This also suggests that policies about housing tenure and poverty need rethinking and carries along the need to be cautious regarding the policies relating to home ownership.
Furthermore, as far as further education is concerned, less educated and non-working people irrespective of their gender and marital status have generally a higher probability of being deprived in multiple life domains. This not only confirms the need to focus on education but also implies the need for an efficient anti-poverty game plan in the UK, which includes the advancement of skills and education. In fact, such a policy agenda should be committed to generous investments towards improving educational levels and labour market opportunities.
First published by the LSE Business Review