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HOW POVERTY DIFFERS FROM INEQUALITY ON POVERTY MEASUREMENT IN AN ENLARGED EU CONTEXT: CONVENTIONAL AND ALTERNATIVE APPROACHES

By Ive Marx, Karel Van and Den Bosch

Abstract

The relative poverty measure is the most prominent and most–quoted of the EU social inclusion indicators. This paper argues that, while pragmatically defensible in the pre–enlargement setting, the estimates and relative rankings the below–60%–of–median–income measure produces in the enlarged EU context is stretching its validity, credibility and hence legitimacy as a prime indicator to an untenable degree. We argue that there is a need for a better grounded and in the present context more credible poverty standard, complementing and possibly replacing the relative poverty line. The principal problem with the relative poverty line, as it is currently used, is that it precludes the possible existence of ‘absolute ’ or ‘primary ’ poverty as this is conventionally understood. In the pre–enlargement context it could be taken for granted, for all practical purposes, that vital functionings like adequate nutrition, clothing and shelter were by and large met, hence allowing for a fully relative poverty threshold conveniently defined as some percentage of mean equivalized income. We argue that this is no longer the case in the enlarged EU context. This context requires a measure that keeps with the notion that poverty is essentially relative in advanced economies while at the

Year: 2013
OAI identifier: oai:CiteSeerX.psu:10.1.1.365.6136
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