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The Minimum Income Standard and equivalisation: reassessing relative costs of singles and couples and of adults and children

Published online by Cambridge University Press:  04 February 2020

DONALD HIRSCH Open the ORCID record for DONALD HIRSCH [Opens in a new window] ,
PIERRE CONCIALDI ,
ANTOINE MATH ,
MATT PADLEY ,
ELVIRA PEREIRA ,
JOSE PEREIRINHA  and
ROBERT THORNTON
DONALD HIRSCH
Affiliation:
Centre for Research in Social Policy, School of Social Sciences, Loughborough University, Loughborough email: donald.hirsch@googlemail.com
PIERRE CONCIALDI
Affiliation:
Institut de Recherches Economiques et Sociales, Noisy le Grand, Paris email: pierre.concialdi@ires.fr
ANTOINE MATH
Affiliation:
Institut de Recherches Economiques et Sociales, Noisy le Grand, Paris email: antoine.math@ires.fr
MATT PADLEY
Affiliation:
Centre for Research in Social Policy, Loughborough University, Loughborough email: m.j.padley@lboro.ac.uk
ELVIRA PEREIRA
Affiliation:
Universidade de Lisboa Instituto Superior de Ciências Sociais e Políticas, Lisbon email: epereira@iscsp.ulisboa.pt
JOSE PEREIRINHA
Affiliation:
ISEG – Lisboa School of Economics & Management, Lisbon email: pereirin@doc.iseg.utl.pt
ROBERT THORNTON
Affiliation:
Vincentian Partnership for Social Justice, Dublin email: robert.thornton@vpsj.ie
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Abstract

Equivalence scales, used to compare incomes across household types, strongly influence which households have low reported income, affecting public policy priorities. Yet they draw on abstract, often dated evidence and arbitrary judgements, and on comparisons across the income distribution rather than focusing on minimum requirements. Budget standards provide more tangible comparisons of the minimum required by different household types. The Minimum Income Standard (MIS) method, now established in several countries, applies a common methodological framework for compiling budgets, based on public deliberations. This article draws for the first time on results across countries. In all of the four countries examined, it identifies an under-estimation by the OECD scale of the relative cost of children compared to adults, and, in three of the four, an under-estimation of the cost of singles compared to couples. This more systematically corroborates previous, dispersed evidence, and helps explain which specific expenditure categories influence these results. These results have high policy relevance, showing greater proportions of low income households to contain children than standard income distribution data. While no single equivalence scale can be universally accurate, making use of evidence based directly on benchmarks such as MIS can help inform public priorities in tackling low income.

Keywords

equivalisationlow incomepovertybudget standards
Type
Article
Information
Journal of Social Policy , Volume 50 , Issue 1 , January 2021 , pp. 148 - 167
Copyright
© Cambridge University Press 2020

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