14. Urban poverty in developed countries
Summary (2 min read)
Introduction
- The urban/rural dimension of poverty has received much attention in social sciences.
- In section 2 the authors present their estimates for Italy in the period 1987-2000, using data drawn from the Bank of Italy’s Survey of Household Income and Wealth (SHIW).
2.1 The definition of urban area
- This problem overlaps with the choice of the reference territorial unit, which is typically constrained by the available data.
- The minimum territorial unit to study urban poverty in Italy is the municipality, since no information is available on family incomes at the census trac t level.
- This choice may be too restrictive for the largest urban agglomerations, where residential and business districts may extend over many neighbouring municipalities.
- Alternatively, the authors may favour a socio - economic characterisation and focus on “local labour systems”, i.e. clusters of economically integrated and adjacent municipalities, whose boundaries are set after analysing daily journeys to work (Istat, 1997).
2.2 The Survey of Household Income and Wealth and measurement hypotheses
- Italian income data are drawn from the Survey of Household Income and Wealth (SHIW), which has been conducted by the Bank of Italy since 1965 (see Banca d’Italia, 2002, for the last release, and Brandolini, 1999, for a historical description and an overall assessment).
- Household income comprises income from work (as employees or self-employed), pens ions, public assistance, private transfers, income from real properties, the imputed rental income from owner-occupied dwellings, and interest on financial assets net of interest paid on mortgages.
- Observations are weighted by the adjusted weights, available in the HA, obtained by post-stratifying the samples to re-establish the marginal distributions of components by sex, age group, type of job, geographical area and demographic size of the municipality of residence, as registered in population and labour force statistics.
- Distribution is thus measured between individuals, attributing to each person the equivalent income of the household to which he or she belongs.
- As extreme values are more likely to contain measurement errors, equivalent incomes below the 2nd percentile and above the 98th have been re-coded to equal the value of the corresponding percentile.
2.3 Urban poverty in Italy
- According to the SHIW-HA data, metropolitan population makes up between an eighth and a quarter of the Italian population, depending on its definition.
- These figures indicate that the population of the provinces surrounding the 6 largest cities resembles the whole Italian population, while residents in central cities are relatively wealthier.
- Fir st, the comparison between metropolitan and nonmetropolitan areas at the national level suffers from a composition effect that hides the fact that poverty rates are higher in metropolitan areas in the South, although not in the North.
- Second, the impossibility to take into account the geographical variability of the cost of living may have led us to underestimate the extent of urban poverty.
3. Long-run changes in urban poverty rates: France and the United States
- As mentioned in the introduction, spatial differences in poverty are regularly examined both in France and the United States.
- Published statistics for these two countries cover relatively long time spans, from 1970 to 1996 for France, and from 1959 to 2000 for the United States.
- A metropolitan area is defined by the U.S. Census Bureau (2002a) as “… a large population nucleus, together with adjacent communities that have a high degree of economic and social integration with that nucleus”.
- Suburbs of metropolitan areas constantly exhibited the lowest headcount poverty ratios, but their share of the poor population more than doubled from 17 to 36 percent, due to the growth of their population (from 31 to 53 percent of the total).
4. International comparisons: evidence from the Luxembourg Income Study
- The lack of an internationally agreed criterion to distinguish “urban” from “rural” is an important obstacle to comparative analysis, which compounds with the many difficulties arising in cross-country comparisons of income poverty and inequality (Atkinson and Brandolini, 2001).
- In March 2002, the LIS database included about 100 surveys covering 26 countries, from which the authors selected for each country the most recent data-set containing the type of the 11 household area of residence (variable D20 or, in few cases, D7).
- The separation of metropolitan areas into central cities and suburbs is also a feature of data for West Germany and 7.
- Even where classification criteria are relatively homogenous, comparability problems may derive from differences in class limits.
- Austria, Denmark, Norway, Sweden and the United States exhibit a U-shaped pattern, whereby the highest poverty rates are found both in the largest metropolitan areas (especially in their inner cities) and in rural areas .
5. Conclusion
- The authors have used national sources to provide original estimates for Italy and to gather published statistics for France and the United States.
- 15 Fourth, in France and the United States post-war economic growth and urbanisation were accompanied by a substantial reduction of the poverty incidence among the rural population, while the poverty risk of the urban population improved less, or even deteriorated in some cases.
- (a) Data refer to all households, excluding those comprised of students, which have nonnegative pre-tax income and positive disposable income.
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References
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...Haddad, Ruel and Garrett, 1999; Ravallion, 2001; and Eastwood and Lipton, 2000, for a...
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