1. Poverty and policy: A 45 year perspective A B Atkinson Nuffield College, Oxford Institute for New Economic Thinking at the Oxford Martin School, University of Oxford and London School of Economics Rome ISFOL May 2012

2. 2 1.Forty-five years in the UK 2.Conceptual advances 3.Empirical evidence: transformation 4.Political salience: ups & downs 5.Implementation: nul points? 6.Conclusions Plan of talk

3. 3 1. Forty-five years in the UK 1965 1969

4. 4 Can learn from the historical record

5. 5 1960s: Policy-based definition of poverty: how many people live below the minimum embodied in social security legislation? Obvious shortcoming: depends on government choice of minimum. 1970s: Participation definition: Townsend EC Council of Ministers Sen and capabilities Recent decades: Multi-dimensional measures of poverty and social exclusion. 2. Conceptual advances

6. 6 Derived from P K Pattanaik, “The ethical bases of public policies” History andInstitutions and Behavioural rules lead to Outcomes evaluated in terms of UtilityorFunctionings and capabilities orNon-well-being measures Analytical framework

7. 7 Subjective measures: Subjective evaluation of outcome; Identification of dimensions of well-being to be measured; Minimum rights rather than standard of living: Legitimate bases for differentiation; Non-consequential evaluations: Autonomy Importance of process (e.g. rejection of means-testing); Role of history: Different national traditions: poverty, level of living, exclusion sociale. Different views

8. 8 8 Ballungen The concept of “Ballungen (congestions)” was developed by Otto Neurath. As described by Nancy Cartwright and Norman Bradburn, with such concepts “there is a lot packed into it; there is often no central core … different features from the congestion (Ballung) can matter for different uses; whether a feature counts as in or outside the concept, and how far, is context and use dependent” (2010, page 4). The resulting indicators are multi-layered, as with the Europe 2020 target. The assessment of progress towards the 2020 target may become more of an exercise in policy-based evaluation, taking as given the politically agreed target, than an absolute judgment about social progress.

9. 9 Member state SourceYears BelgiumAntwerp Centre for Social Policy Household Survey1976 (Flanders only) and 1985 DenmarkCentral taxpayer register (based on tables)1977 FranceEnquête Revenu1975 and 1979 GermanyIncome and expenditure survey (EVS) (based on detailed tables) 1973 and 1978 GreeceHousehold Budget Survey1974 and 1981/2 IrelandHousehold Budget Survey (HBS) and ESRI Household Survey1973, 1980 (HBS) and 1985 (ESRI) ItalyIstat Survey of Consumer Spending1975 and 1980 LuxembourgSocio-Economic Panel Study of Households1985 NetherlandsIncome Distribution of Households (ID) and Housing Demand Survey (HDS) 1977 (ID) and 1981 and 1985 (HDS) PortugalHousehold Expenditure Survey (HES) and Household Income and Expenditure Survey (HIES) 1973/4 (HES) and 1980/1 (HIES) SpainEncuesta de Presupuestos Familiares1973 and 1981 UKFamily Expenditure Survey1975, 1980 and 1985 3. Empirical evidence: transformation DATA SITUATION in the 1980s: O’Higgins and Jenkins (1990).

10. Investment in data “[The sciences have] moved from the private study into huge scientific laboratories where scores of experts are engaged … Should we expect less in economic research, if its results are to be the basis for economic policy upon which might depend billions of dollars of national income and the general economic welfare of millions of people” (Trygve Haavelmo, 1944). ECHPEU-SILCLIS BUT Surveys are expensive; Surveys face growing problems of non-response; Multi-dimensional measures impose particular demands; Need to make greater use of alternative sources, especially administrative data.

11. 4. Political salience: ups & downs in UK Anthony Crosland, “primary poverty has been largely eliminated” (1956). The Beveridge Plan had been successful. “We have had no evidence to suggest that the present arrangements for national assistance are not fully capable of … preventing distress among the old by securing a basic minimum (Phillips Committee, 1954). 1965 publication of The Poor and the Poorest Founding of Child Poverty Action Group “The word poor is one the government actually disputes” (evidence to the House of Commons Select Committee on Social Services, 1989). “No Government in the United Kingdom have ever accepted that it is possible to identify a single simple measure to define poverty in any meaningful way.” (Minister, 1994). 1999, Government sets target to eradicate child poverty by 2020.

12. 12 1958 1973 198219902000 2012 Timeline Social policy means to restructuring Ultimate goal of European Social Union Social Action Programmes; First estimates of poverty in the EU European agenda dominated by common internal market and euro Lisbon Agenda and Social Inclusion Process Europe 2020 targets Kok report Social dimension of Europe

13. 5. Implementation: nul points? Learn from periods when poverty has been reduced; Learn from countries (and sub-national areas?) where poverty performance better; Plan new policies at EU level that can work under subsidiarity.

14. Significant poverty reductions Significant = > 2 percentage point fall in poverty rate. Recession and policy changes Recession Policy changes

15. 15 Significant poverty differences

16. 16 Least interventionist form of coordination: Sets only a minimum standard; Standard to be defined relative to the circumstances of the Member State; Member States to have latitude in the design of the policy. An EU guaranteed income for children. Defined as a percentage of the Member State median equivalised income for each child (and possibly age-related); Implementation would be left to Member States, who could employ different instruments (child benefit, benefits in kind, employer- mandated benefits). New EU policy

17. 6. Conclusions Poverty is a congested concept, and assessment of progress towards Europe 2020 target may be best seen as a policy-based evaluation; Availability of empirical evidence about poverty has been transformed, but need continued investment and new approaches; Political concern ebbs and flows; need to embed in political mechanisms and structures; key role for civil society. Comparative studies very valuable but also need in-depth historical studies of individual countries; We can learn from periods when poverty has been significantly reduced as well as from significant differences across countries (and regions?); Need new thinking with regard to EU social policy; there are measures that could be introduced, under subsidiarity, such as the EU minimum income for children.