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The Truly Vulnerable: Integrating Wealth into the Measurement of Poverty and Social Policy Effectiveness

Author

Listed:
  • Sarah Kuypers

    (University of Antwerp)

  • Ive Marx

    (University of Antwerp)

Abstract
There is a burgeoning literature on wealth in the rich world. It mainly focuses on the top. This paper shows that assets can also matter for the analysis of poverty and financial vulnerability. We introduce the concept of triple precariousness, afflicting households that not only have low income but also very low or non-existent assets to draw on for consumption needs, especially liquid assets. We ask whether these households—whom we might call the truly vulnerable—have different characteristics from those that we identify as poor or needy on the basis of income based metrics. This study looks in detail at Belgium, a country that represents a particularly interesting case because households are known to have levels of household wealth that are among the highest in the Eurozone, especially around and below the median, and yet it also has a comparatively high poverty rate, measured using disposable household income, as is commonly done in poverty studies. Drawing on HFCS data, we show that households with a reference person that is young, unemployed, low educated, migrant, single, and above all a tenant are especially financially vulnerable. By contrast, our assessment of the extent and depth of financial need among the elderly—a segment of society that is at a relatively high risk of income poverty—also changes. A substantial share of income poor elderly households own significant assets. We draw out some tentative consequences of these findings for anti-poverty and redistributive policies.

Suggested Citation

  • Sarah Kuypers & Ive Marx, 2019. "The Truly Vulnerable: Integrating Wealth into the Measurement of Poverty and Social Policy Effectiveness," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 142(1), pages 131-147, February.
    • Handle: RePEc:spr:soinre:v:142:y:2019:i:1:d:10.1007_s11205-018-1911-6
    DOI: 10.1007/s11205-018-1911-6
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    References listed on IDEAS

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    1. Kontbay-Busun, Sine & Peichl, Andreas, 2014. "Multidimensional affluence in income and wealth in the eurozone: A cross country comparison using the HFCS," ZEW Discussion Papers 14-124, ZEW - Leibniz Centre for European Economic Research.
    2. Sarah Kuypers & Ive Marx, 2016. "Social concertation and middle-class stability in Belgium," Chapters, in: Daniel Vaughan-Whitehead (ed.), Europe's Disappearing Middle Class?, chapter 3, pages 112-159, Edward Elgar Publishing.
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    Citations

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    Cited by:

    1. Morelli, Salvatore & Nolan, Brian & Palomino, Juan & Van Kerm, Philippe, 2021. "Inheritance, Gifts and the Wealth Deficit of Low-Income Households," SocArXiv 2mpuh_v1, Center for Open Science.
    2. Chen, Chuna & Tan, Zhuomin & Liu, Song, 2024. "How does financial literacy affect households’ financial fragility? The role of insurance awareness," International Review of Economics & Finance, Elsevier, vol. 95(C).
    3. Marshall Makate & Clifton Makate, 2023. "Leaving No Women Behind: Evaluating the Impact of the COVID-19 Pandemic on Livelihood Outcomes in Kenya and Ethiopia," IJERPH, MDPI, vol. 20(6), pages 1-16, March.
    4. Yoko Niimi & Charles Yuji Horioka, 2023. "Elderly poverty and its measurement," Chapters, in: Jacques Silber (ed.), Research Handbook on Measuring Poverty and Deprivation, chapter 29, pages 307-315, Edward Elgar Publishing.
    5. Ilari Ilmakunnas & Joonas Uotinen & Maria Vaalavuo, 2024. "Association Between Age and Subjective Economic Hardship Across the Income Distribution in Europe," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 173(2), pages 523-542, June.
    6. Morelli, Salvatore & Nolan, Brian & Palomino, Juan & Van Kerm, Philippe, 2021. "Inheritance, Gifts and the Wealth Deficit of Low-Income Households," SocArXiv 2mpuh, Center for Open Science.
    7. Petar Peshev, 2023. "Estimation of the Value, Distribution and Concentration of Wealth in Bulgaria, 1995-2020," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 3, pages 104-129.
    8. Sarah Kuypers & Gerlinde Verbist, 2022. "Over-indebtedness and poverty : Patterns across household types and policy effects," Working Paper Research 420, National Bank of Belgium.

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    More about this item

    Keywords

    Low income; Low wealth; Asset portfolio; Social policy;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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