Inequality and Social Policy Seminar presentation by David Brady, Director of Inequality and Social Policy Department, WZB Berlin Social Science Center. 

Poverty research has long focused on the demographic risks of poverty, defined as labor market and family characteristics more prevalent among the poor than the non-poor. This article proposes a framework for analyzing the demographic risks of poverty in terms of prevalences (share of the population with a risk) and penalties (increased probability of poverty associated with a risk). We compare the prevalences and penalties of four paramount demographic risks (low education, single motherhood, young headship, and unemployment) across 29 rich democracies with the Luxembourg Income Study. The results show much greater cross-national variation in penalties than prevalences. The unusually high U.S. poverty results from extremely high penalties despite below average prevalences. Next, we conduct simulations to investigate how different U.S. poverty would be with counterfactual prevalences or penalties. These reveal that U.S. poverty would decline if it had cross-national median penalties, but would not decline if it had cross-national median prevalences. Also, U.S. poverty in 2010 would actually be higher with historical prevalences from the U.S. in 1970 or 1980. Further analyses reveal no evidence that smaller penalties result in greater prevalences. In multi-level models pooling the 29 countries, a measure of welfare state generosity significantly moderates the penalty for two of the demographic risks (low education and unemployment). We conclude that studies of the demographic risks of poverty based solely on the U.S. likely suffer from a substantial sample selection bias.

This event is co-sponsored by Seminar on Exclusion and Inclusion in Europe.