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The at-risk-of-poverty rate, the relative income poverty indicator applied in the EU, can be highly sensitive to the equivalence scale used to transform household income to an equivalent for individuals. This study applies two well-established approaches to estimate the equivalence scale: an 'objective' one, based on consumption expenditures available in the national Household Budget Survey, and a 'subjective' one, based on the Minimum Income Question available in EU-Statistics on Income and Living Conditions data. The aim is to contrast the two estimated equivalence scales in the Czech Republic in the 2006-2016 period with the OECD-modified scale applied uniformly for decades across the EU countries. Our findings suggest that the adult weight in the equivalence scale is decreasing over time, while the child weight is relatively stable under both approaches. The estimated weights are lower than the officially applied ones, with the exception of the expenditure-based adult weight, which is very close to the OECD-modified weight. Applying the estimated scales affects the income poverty rate and leads to different rates than the official ones: while the trend of the rates is similar when the two estimated scales are used, the official income poverty rate deviates from those two.

Um die Leistungsabsenkungen im Rentensystem der drei vergangenen Jahrzehnte anschaulich zu machen, wird die tatsächliche Versicherungsbiografie seines Vaters mit der fiktiven identischen Versicherungsbiografie des Autors kontrastiert, der 28 Jahre später geboren wurde. Dabei zeigt sich, dass insbesondere die rentenrechtliche Entwertung von Ausbildungs- und Arbeitslosigkeitszeiten zu drastisch niedrigeren Rentenanwartschaften des Sohnes führen. Die 'Entsicherung' sozialer Risikolagen mit der Folge tatsächlicher Rentenabsenkungen spiegeln sich nicht in dem vieldiskutierten Rentenniveau wider. To illustrate the reductions in the benefits of the pension system over the past three decades, the actual insurance history of the author's father is contrasted with an identical, fictitious insurance history of the author, who was born 28 years later. This illustrates that the devaluation of periods of training and unemployment under pension law leads to drastically lower pension entitlements for the son. The actual pension reductions created by the lack of coverage of social risk situations is not reflected in the much discussed pension level.

Background: Since the latter part of the 20th Century, countries have been particularly challenged by the trade-off that exists between delivering generous welfare provisions and strong economic growth. Such dynamics have stimulated a need to better understand the causes of income inequality so as to better formulate policies that foster inclusive growth and reduce growing concerns surrounding income inequality. Method: Given its ability to succinctly summarize, analyze, and synthesize an extant body of literature from a certain genre of scholastic endeavor, this study utilizes a literature review as its proposed methodological approach. Results: From our assessment of the literature, we identified four key areas that contribute significantly to income inequality in both advanced and developing economies, these include: (i) pursuing skill-biased technological change, (ii) enhancing education systems, (iii) consolidation of globalization, and (iv) reform of the labor market and its relevant institutions. Conclusion: There is no silver bullet to achieving inclusive growth. Any policy manifesto must seek to offer a coordinated policy platform that looks to deal directly with the causes of inequality. In order to do so, consideration should be given to a range of policy areas including fiscal, education, trade liberalization, and labor market reforms.

Income inequality is increasing in European cities and this rising inequality has a spatial footprint in cities and neighbourhoods. Poor and rich people are increasingly living separated and this can threaten the social sustainability of cities. Low income people, often with an ethnic minority background, can get cut off from important social networks and mainstream society, and this can lead to social unrest. Increasing inequality and socio-economic segregation is therefore a major concern for local and national governments. Socio-economic segregation is the outcome of a combination of inequality and poverty, and the spatial organisation of urban housing markets. Poverty, and living in poverty concentration neighbourhoods is transmitted between generations and neighbourhood poverty is reproduced over time through to the residential mobility behaviour of households. Urban policy often focusses on reducing segregation through physical measures in cities, such as demolishing houses in deprived neighbourhoods and replacing them with housing for the middle classes. Such policies will not solve the underlying causes of segregation, but only redistribute poverty over cities. Policy initiatives should first of all focus on reducing inequality by creating equal opportunities for people and invest in education and training. Inclusive growth strategies should combine both people-based and area-based policy measures.

Summary Although poverty is widely recognised as a multidimensional phenomenon, we still believe that monetary aspect has a fundamental role and therefore deserves a special treatment. For this reason we propose an individual unidimensional measure according to a fuzzy approach that, unlike conventional methods, is consistent with the vague nature of poverty and preserves all the available statistical information. Referred to the overall population, we use an Information Theory approach to design unidimensional fuzzy collective index. The methodology proposed here is illustrated by means of the Tunisia case.

In this paper, we analyse different measures of asset and income poverty using micro-data for 15 euro area countries from the 2010 Household Finance and Consumption Survey (HFCS). We are particularly interested in the way in which specific definitions of income and wealth poverty affect the number and socio-demographic characteristics of poor households, as well as their portfolio composition and consumption expenditure. We find that adding wealth to the poverty definition mainly influences the percentage of poor households but has a limited effect on the documented socio-demographic composition, portfolio structure and food consumption of poor households compared to the patterns under a pure income poverty measure. Within each country, we document some heterogeneity with regard to the percentage of poor households across different poverty measures. However, across countries, the percentage of households in poverty for any given indicator is relatively homogenous. We find the typical socio-demographic patterns for poor households: the risk of being income and/or wealth-poor is, in almost all countries, higher for smaller households, households with a less educated head and single-parent households. We also show that the percentage of female, old and retired reference persons is higher for poor households than for the population at large. Additionally, the participation rates in real and financial assets for poor households are lower than for the population as a whole. Poor households spend more than 30% of their gross income on food.

A growing concern on widening income gap between the rich and the poor, the policy mismatch in tackling the relative poverty and income inequality have invited increasing volumes of research focusing on the nexus between equity and efficient growth. Developed countries have experienced the critical challenges and trade-off between their generous welfares provisions and economic growth. Developing countries on the other hand, especially countries in Asia are in the process of shifting their policy direction toward more inclusive growth where most members are transforming themselves from a low-income country into a middle income country (ADB, 2014). This has stimulated the need to understand causes of inequality and poverty for better formulate policies of fostering inclusive growth. Economic growth itself is an important source of welfare distribution in most developing Asian countries. Asian governments used many forms of fiscal policy to mitigate income gaps and poverty because they will substantially undermine the economic growth if left unchecked (ADB, 2014). The objective of this study is to review the previous studies, particularly literatures related with inclusive growth of advanced economies, and to offer an efficient policy options for Asian countries. Major determinant factors of growing inequality, poverty and a range of fiscal policy tools are evaluated from both country and cross-country perspectives. The initiated policy measures are based on experiences of advanced welfare economies and the lessons derived from them will be a meaningful guideline for Asian countries to achieve their goals of inclusive growth.

Das Problem der Altersarmut ist in Deutschland in jüngster Zeit in den sozialpolitischen Fokus gerückt. In starkem Kontrast zu bislang vorliegenden empirischen Arbeiten behauptet ein aktuell veröffentlichtes Gutachten des wissenschaftlichen Beirats beim Bundeswirtschaftsministerium, dass sich das Problem der Altersarmut in Deutschland auch künftig nicht stelle. Dagegen spricht, dass Invalidität, Langzeitarbeitslosigkeit und anhaltender Niedrigverdienst zunehmende Risiken darstellen. Die Autoren warnen daher vor einer Verharmlosung und plädieren stattdessen für weitere seriöse und transparente Forschung auf diesem Gebiet. The development of old-age poverty has become an important topic in Germany. Contrary to most studies, a recent report written by the scientific advisory council at the German Federal Ministry of Economy asserts that old-age poverty will not become a large socio-political problem in Germany in the future. The authors of this paper warn against downplaying the problem of old-age poverty, and they plead in favour of further reliable research on the issue.

Undoubtedly, poverty reduction has become a front-burner issue in development and business agenda. Since its announcement and defense by its advocates as a potent weapon against poverty, the Bottom of the Pyramid (BoP) concept has been bedeviled by controversies. A major controversy is whether or not Multi-National Corporations (MNCs) can serve the BoP market profitably without further impoverishing the poor. The main objective of this study therefore is to assess if there is market for MNCs at Nigeria's BoP. The primary data for this study were collected using Questionnaires administered to consumers in South Western Nigeria. The secondary data used were obtained from the National Bureau of Statistics Surveys; 2009/2010 Consumption Pattern and Consumer Expectation. Using a combination of primary and secondary data, the study employed multiple regression analysis on determinants of consumption at Nigeria's Bottom of the Pyramid. Findings of the study were mostly in conflict with the positions of the BoP advocates. On the basis of the trends in Consumer Behavior and the composition of baskets of goods at the Bottom of the Pyramid, the study concluded that the BoP market would be better served by indigenous micro, small and medium enterprises than Multi-National Corporations.

In this paper an alternative approach with regard to poverty measurement is discussed: the so-called decomposition approach (see also FaMa discussion paper no. 2/23009). This method differentiates between various social groups in the sense that for each group a separate poverty line is determined. E. g., household size might be a criterion for such a social differentiation. By doing this, the problem of traditional poverty measurement to refer to income-independent equivalence scales is principally avoided. Moreover, the further problem of the traditional method, namely to determine a (general) poverty line as a more or less arbi-trary fraction of society’s mean welfare level, does not exist, on principle, in the decomposition approach. Present author’s own calculations reveal higher poverty levels indicated by this approach compared with the conventional method of measuring (income) poverty. Since it appears to be realistic that some people perform their poverty assessments through a “mixture” of their own group’s and overall welfare levels, at a plausible degree of economies of scale (i. e., Buhmann et al.’s θ > 0.65) the poverty levels of the decomposition approach can be interpreted as upper limits for the “true” level of poverty, and, conversely, the degree of poverty ascertained by the conventional approach can be seen as a lower limit for “true” poverty. In diesem Arbeitspapier wird ein alternativer Ansatz der Armutsmessung diskutiert: der so genannte Zerlegungsansatz (siehe auch FaMa-Diskussionspapier Nr. 2/2009). Diese Methode differenziert zwischen verschiedenen sozialen Gruppen in dem Sinne, dass für jede Gruppe eine separate Armutsgrenze bestimmt wird. Beispielsweise könnte die Haushaltsgröße ein Kriterium für eine solche Differenzierung sein. Auf diese Art und Weise kann das Problem der traditionellen Armutsmessung, die Bezugnahme auf einkommensunabhängige Äquivalenzskalen, prinzipiell vermieden werden. Des Weiteren existiert ein weiteres Problem der traditionellen Methode nicht grundsätzlich im Rahmen des Zerlegungsansatzes, nämlich die Bildung einer (allgemeinen) Armutsgrenze als mehr oder weniger willkürlicher Anteil am gesellschaftlichen Wohlstandsmittelwert. Eigene Berechnungen des Autors offenbaren höhere Armutsniveaus bei diesem Ansatz im Vergleich zur konventionellen Methode der Messung von (Einkommens-)Armut. Da es realistisch erscheint, dass einige Personen ihre Armutsbemessungen in Form einer "Mischung" aus ihren eigenen gruppenbezogenen und den allgemeinen Wohlstandswerten durchführen, können – auf einem plausiblen Niveau der unterstellten Haushaltsgrößenersparnisse (d.h.: Buhmann et al.s θ > 0,65) – die Armutsniveaus des Zerlegungsansatzes als obere Grenzen für die "wahren" Armutswerte und, umgekehrt, die Armutsniveaus des konventionellen Ansatzes als untere Grenzen für diese "wahren" Armutswerte interpretiert werden.

The paper is based on an individual life-cycle model, which describes the purely economic components of human capital. The present value of human capital is determined by all future income flows, which at the same time constitute the individual as well as the total tax base of a nation. Therefore, the income of the productive population determines the total tax revenue, which is spent for public goods (including education) and transfers (for poverty reduction). The efficient design of the education system (by private and public education investments) determines the quality of the human capital stock as well as the future gross income flows. The costs of public goods and the transfer expenditures have to be financed from the total tax revenue, which also affects the individual tax burden via the specific tax bases and tax rates. Especially the redistribution of income is connected with serious disincentives, influencing the preferences for work and leisure as well as for consumption and saving. An efficient tax and transfer system being accompanied by an education system financed in public private partnership, which treats equally labor and capital income, sets positive incentives for the formation of human, financial, and real capital. An important prerequisite for a sustainable growth process is the efficient design of the social security system, being based on the family as well as a collective risk equalization scheme. If that system is diminishing absolute poverty in an appropriate time period by transfers and vocational education measures for the grown-up as well as high quality primary, secondary and tertiary education programs for the children, the transfer expenditure would decrease and the tax bases (income and consumption) increase, lowering the burden on the productive population. For the first time, this micro model presented in this paper pools all the relevant variables for development within a simple life-cycle model, which can also be used for a powerful analysis of the current failures in existing tax and transfer schemes and fruitful empirical investigations. Hence, an efficient tax and transfer scheme strongly contributes to an improved national position in the global competition.