A New Tool for Monitoring (Child) Poverty: Measures of Cumulative Deprivation

Governments’ social indicator portfolios have expanded taking the multidimensionality of poverty into account. However, few
if any, of the indicators provide insight into the degree to which persons experience several unfavourable conditions at the
same time. This paper reviews and tests various indicators of cumulative deprivation that can be used to monitor child poverty
and to identify vulnerable groups of children. This paper studies headcounts (counting deprived individuals) and adjusted
headcounts (counting deprivations of deprived individuals) while the cumulative threshold can be distribution dependent (relative)
or not (absolute). The measures are empirically tested on the 2007 EU-SILC data for the United Kingdom, Germany, France and
the Netherlands. The findings indicate that the absolute adjusted headcount with a cumulative threshold of one deprivation
is the most attractive candidate: it has an intuitive interpretation; it is sensitive to the breadth of deprivations but not
oversensitive to changes in the methodology.