How do we measure poverty?

Original article by McMaster Optimal Aging Portal dated August 15, 2018

Five generations: that’s how long on average it’s estimated it takes for a descendant of a poor family in an Organisation for Economic Cooperation and Development (OECD) member country to reach the average income of their country.(1) This finding illustrates that poverty is transmitted from one generation to the next and that it can take a long time to overcome it.

Poverty has enormous consequences for individuals, families and communities. While poverty affects people of all ages, it presents unique challenges for older adults. Indeed, poverty adds to the challenges of aging, such as growing needs for health and social services, loss of autonomy, reduced mobility, and reduced social and community support. According to Statistics Canada, Canada ranks 12th among OECD countries with an average poverty rate of 14.3% for older adults (ranging from 4.1% in Alberta to 26.7% in Newfoundland and Labrador).(2; 3; 4) Poverty appears to be more prevalent among certain groups of older adults, including those living alone and women.

That being said, it is not easy to paint a clear picture of poverty in Canada. Surprisingly, the federal government does not have a formal poverty line, that is, a dollar amount below which a person or a family would be considered “poor.”(5) In addition, a variety of indicators are used across the country, but these have limitations. Income appears to be the most common indicator. Although this is a starting point, using only income as an indicator does not take into account all dimensions of poverty.(5)

For many years, municipal, provincial, territorial and federal governments have expressed their commitment to develop and implement poverty-reduction strategies.(6; 7; 8; 9; 10; 11) Various groups and researchers have also proposed new poverty lines and indicators.(12; 13) It is therefore timely to take stock of the indicators that can be used to measure poverty among older adults.

What research tells us

A recent systematic review found that the majority of studies have measured poverty among older adults based on income and market-basket indicators.(14) These traditional indicators, however, seem to underestimate the poverty rates among older adults. To a lesser extent, studies have used poverty indicators based on assets or wealth of individuals, as well as indicators illustrating poverty as perceived by older adults (for example, the amount of money perceived as necessary to live in a given community).

The systematic review also highlighted some research trends. In fact, studies increasingly focus on measuring poverty among older adults by using a combination of indicators. The purpose is to take into account the different dimensions of poverty and to establish more precise estimates. Other indicators proposed in the studies to measure poverty among older adults include:

– the health status of older adults (and their needs for health and social services);
– the level of education of older adults, such as the acquisition of skills and knowledge useful for life in society;
– the ability of older adults to buy appropriate clothing or shoes;
– the level of food security, including older adults’ ability to obtain adequate, healthy and nutritious food, and to eat at least one meal a day containing meat, fish or a vegetarian equivalent;
– costs related to accommodation and access to adequate and safe housing, including the ability to connect to the internet or to maintain a proper temperature in their homes;
– the level of social inclusion, and the opportunity to travel by car or public transport to participate in activities and community life; and
– the characteristics of the communities where older adults live (for example, access to infrastructure and public services).(4; 14)

Having an official poverty line and robust indicators are essential for poverty-reduction strategies. Without them, it is not possible for a government to set targets, assess the effectiveness of poverty-reduction interventions, and publicly report on the achievement of these targets.(5) Older adults and their caregivers must make their voices heard at the various levels of government and in poverty studies to develop more relevant, valid and reliable poverty indicators. After all, they know better than anyone the challenges faced by older adults who are trying to make ends meet.