Proceedings of the Nordic Consumer Policy Research Conference 2007
Low income and “poverty lines” in Norway – A comparison of three concepts Elling Borgeraas, National institute for consumer research (SIFO), Oslo, Norway Email: elling.borgeraas@sifo.no Espen Dahl, Oslo University Colege, Oslo Norway Email: espen.dahl@hio.no
Abstract In this paper we address the question how well do “poverty” as defined by three different poverty concepts correspond. We have compared three different measures of “poverty” in Norway: income poverty, and two measures of a minimum budget standard, one scientifically and one politically defined. The three measures rest on different underlying concepts, serving different purposes and yielding significantly different poverty lines. If followed by the municipal social services, the Governmental norms for social benefits will, paradoxically, leave the beneficiaries in income poverty as defined by the same Government. The most generous poverty line of all three measures is provided by the minimum budget standard developed by SIFO, which rests on the assumption that a household’s income needs to give a sustainable financial situation in the longer run. Neither of the two other poverty measures have this property. Some political and practical implications of the findings are discussed. 1. Introduction The question we address in this paper is how well three different poverty definitions, all in use in Norway, correspond, or more accurately where they draw their poverty lines. It is widely recognised that in late-modern, affluent Western societies, poverty is a relative phenomenon; it has to do with social participation and lack of resources that enable people to live a “normal” life. In this article we adopt this notion of relative poverty. However, “poverty” may be defined and measured in a number of ways. The number of poor and who are poor will be heavily affected by the definitions and measures we use. Countries have different ways to define and measure poverty. Recently, however, within the EU a consensus has now been reached on this matter (Atkinson et al. 2002). The EU member countries agree that those having an income less than 60 per cent of the median are considered “poor”. In Norway as well, the official view on poverty is close, but not identical to this notion. The use of income to define poverty may be justified by on the ground that income is essential in societies with market economies, the measure is widely available, relatively easy to compare in time and space, and has a common and intuitive understanding. In Norway as in the EU, the income limit approach is the official way to define poverty. The income limit approach has however been extensively criticized. It has variously been accused for being arbitrary, that it has no 1