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Empirical Overview of the Relationships of Family Size, Poverty and Vulnerability to Poverty

3.1 Poverty Incidence, Gap and Severity and Family Size

The easiest and perhaps the most obvious way to demonstrate the relationship of poverty and family size is to show the extent of poverty incidence by size of family. Table 1 [ PDF 72.4KB | 1 page ] shows the incidence of poverty by family size in the last 25 years using the Family Income and Expenditure Survey (FIES) and official poverty lines. Clearly the incidence of poverty rises as family size increases. For instance, in 1985 the poverty incidence for a four-member household is 36.4 while it is 59.9 for a 9 or more-member household. Hardly surprising, twenty-five years later in 2000, the incidence of poverty for a 4- member household is 23.8, while the corresponding incidence for a 9 or more-member household is 57.3. This relationship has not changed over the last 25 years. If at all, the difference in poverty incidence has even widened.

The picture is virtually duplicated when one looks at both poverty gap and severity by family size. The average proportionate distance between the poverty line and the average income of the poor (the poverty gap) doubles as one moves from a 4-member household to a 9 or more-member household. This has even worsened over the years. In 1985 this gap is 10% and 23% for the 4-member and 9 or more-member household, respectively, or about twice as large (Table 1 [ PDF 72.4KB | 1 page ]). By 2000 the relative proportions are 6% and 22%, respectively, or more than three times as large. The square of this gap, which a well-accepted measure of the severity of poverty because it puts higher weight on those farther from the poverty line, also tells an identical story.

All of these indicators, thus show that no matter what poverty measure one uses, there is clear indication that poverty worsens as one moves from smaller to bigger family size households.

It is also informative to show a very similar result obtained from looking at the vulnerability of households to poverty given the size of their families.

3.2 Vulnerability to Poverty and Family Size

Observing the poverty status of households experiencing economic shocks can reveal the relationship of vulnerability to poverty and family size. Reyes (2002) used a panel data constructed from the 1997 FIES and the 1998 and 1999 Annual Poverty Indicator Surveys (APIS) to study the movement of households in and out of poverty. These surveys were done right after the Asian Financial Crisis in 1997. Table 2 [ PDF 44.2KB | 1 page ] shows the poverty status of household across the three surveys. Letter P means “poor” while N means “non-poor”. Thus, PPP means always poor throughout the three years while NNN means always non-poor throughout the three years. What one can readily observe as one goes from always non-poor to the always-poor categories over the three years is that family size is increasing. Families that are always poor over the three-year period have an average of size of 6.1 while those that are always non-poor have a size of 4.6. This clearly indicates that the vulnerability to poverty increases with family size.5

While it is very clear from the foregoing that family size and poverty incidence as well as vulnerability to poverty are positively related, their usefulness for policy is limited unless one understands better the mechanisms behind the connection. It is hypothesized that the main mechanisms operating between family size and poverty and vulnerability to poverty are savings, the labor supply and earnings of parents and the investments in the education of children. The first two are known to be the primary engines for consumption smoothing of households. The last one is the main avenue for securing the future consumption of children and also of parents in their old age.

The rest of the paper uncovers the role of family size in these mechanisms.

The views expressed in this paper are the views of the author/s and do not necessarily reflect the views or policies of the Asian Development Bank Institute nor the Asian Development Bank. Names of countries or economies mentioned are chosen by the author/s, in the exercise of his/her/their academic freedom, and the Institute is in no way responsible for such usage.

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