Document Type

Article

Date

2001

Embargo Period

6-28-2012

Keywords

Poverty rate, Antipoverty policies, Absolute poverty, Per Capita income, Relative poverty, Luxembourg Income Study

Language

English

Disciplines

Public Policy

Description/Abstract

In this paper we use cross-national comparisons made possible by the LIS to examine America’s experience in maintaining a low poverty rate. We compare the effectiveness of United States antipoverty policies to that of similar polices elsewhere in the industrialized world. If lessons can be learned from cross-national comparisons, there is much that can be learned about antipoverty policy by American voters and policymakers. The United States has one of the highest poverty rates of all the countries participating in the LIS, whether poverty is measured using comparable absolute or relative standards for determining who is poor. Although the high rate of relative poverty in the United States is no surprise, given the country’s well-known tolerance of wide economic disparities, the lofty rate of absolute poverty is much more troubling. After Luxembourg, the United States has the highest average income in the industrialized world. Our analysis of absolute poverty rates provides poverty estimates for 11 industrialized countries. The United States ranks second highest among the 11 in per capita income, yet it ranks third highest in the percentage of its population with absolute incomes below the American poverty line. The per capita income of the United States is more than 30 percent higher than it is, on average, in the other ten countries of our survey. Yet the absolute poverty rate in the United States is 13.6 percent, while the average rate in the other ten countries is just 8.1 percent— 5.5 percentage points lower than the United States rate. Our paper suggests some reasons for this pattern. The paper is organized as follows. We begin by reviewing international concepts and measures of poverty as they relate to the main measures of income and poverty used in other chapters of this book. Next we present cross-national estimates of both absolute and relative poverty, concentrating on the latter measures. After examining the level and trend in these rates, we explore some of the factors that are correlated with national poverty rates and examine the antipoverty effectiveness of government programs aimed at reducing poverty. We conclude with a discussion of the relationship between policy differences and outcome differences among the several countries, and consider the implications of our analysis for antipoverty policy in the United States.

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