New report has relevance for anti-poverty strategy

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For those in poverty, finding work can be an effective route out. But substantial in-work poverty remains, says a recent report by The Welsh Government.

The report, The Dynamics of Low Income, found that level of pay, number of hours and staying in work may be the most important factors in reducing the overall amount of persistent poverty in Wales.

The research, carried out by the New Policy Institute (NPI) aimed to take a dynamic view of poverty in Great Britain in general and Wales specifically.

Using Understanding Society, the report aimed to address the limited evidence about the persistence of poverty at the Wales level and the lack of evidence about the characteristics of households living in persistent poverty in Wales.

Key findings and policy implications

  • Persistent poverty is more concentrated in workless households than point in time poverty. In half of cases, an increase in the number of people working is associated with a move out of poverty, so work can be an effective route out.
  • However, substantial in work poverty remains, even persistent in work poverty. So simply finding work may not be sufficient; level of pay is also important, as is the number of hours worked.
  • While finding work is important, staying in work is vital, too. Losing a job is strongly associated with a move into poverty.
  • The number of people who are in persistently workless households is relatively low. As a result, they form only a minority of those in persistent poverty.
  • Focusing solely on long term worklessness will therefore have only limited impact on reducing overall poverty and even on reducing persistent poverty.

Why did the Welsh Government choose Understanding Society?

A number of key factors made BHPS/Understanding Society suitable for the project, including:

  • BHPS’ large sample size and “Welsh Boost” in 1999, which together with Understanding Society, brought the sample to 4,100 respondents in Wales
  • Ability to track individuals and their incomes over time and also analyse transitions occurring over a relatively short period of time e.g. between waves
  • Ability to study a wide variety of transitions experienced by individuals and the households in which they live, such as changes in economic activity status or demographic changes
  • Availability of measures for net household income, and through the application of appropriate analytical techniques, provide a range of results specific to Wales.

For more details of the project, including a detailed investigation of the potential of BHPS/Understanding Society for Wales-level analysis, visit the Welsh Government’s Statistics and Research website.

Related links

this news has been re-posted from the Understanding Society website