Transcript Document

An Empirical Analysis of Poverty
and its Determinants in
Trinidad and Tobago
Ms. Raynata Wiggins and Dr. Sandra Sookram
Sir Arthur Lewis Institute of Social and Economic Studies
The University of the West Indies,
St. Augustine Campus
OUTLINE OF PRESENTATION
 Introduction
 Background
 Objectives of the Study
 Data
 Methodology
 Results
 Findings
 Conclusion
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INTRODUCTION
Poverty is one of the most serious
and persistent problems facing the
world
 Poverty eradication is the first goal
of the Millennium Development Goals
 Poverty Eradication and Social
Justice is Pillar 2 in the Seven
Interconnected Pillars for Sustainable
Development in Trinidad and Tobago
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BACKGROUND
Trinidad and Tobago has one of the highest
per capita incomes in the LAC region
The 2014 Human Development Report
classifies T&T as having High Human
Development
The country has experienced positive
economic growth due in large part to vast oil
and gas reserves.
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BACKGROUND (continued)
Poverty reduction still remains a challenge
16.7%
(2005 SLC)
&
14.8%
(2008/2009 HBS)
of the population lived below the poverty line
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OBJECTIVES OF THE STUDY
 Identify the determinants of poverty
 Examine the socioeconomic and demographic
characteristics that significantly influence the
probability of being poor
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DATA
Data is drawn from the 2008/2009 Household
Budgetary Survey (HBS)

 The HBS provides detailed information on the
expenditure patterns of households
 The realised sample was 7,090 households
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METHODOLGY
Welfare measure
• Consumption expenditure is used as a proxy for income
• Welfare for each household is calculated using consumption-expenditure
Model
• We employ a probit model fitted by maximum likelihood
• Value of 1 denotes if a household is poor and a value of 0 if otherwise
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RESULTS
EXPLANATORY VARIABLES
Household size
Number of children
Age of head
Sex of head (female)
Single parent
Area of dwelling (base category: Urban)
Rural
Ethnicity of head (base category: African)
Indian
Mixed
Marital status of head (base category: Single)
Separated
Living together (married or common-low)
Highest education of head (base category: University)
No education
Pre-school
Primary school
Secondary school
Other
Main employment status of head (base category: Permanent )
Temporary
Contract
Seasonal
Occasional / Odd Jobs
POOR
0.267 (5.54)**
0.247 (3.28)**
0.003 (0.65)
0.161 (1.43)
0.376 (2.99)**
0.086 (0.59)
0.183 (1.49)
-0.140 (1.15)
-0.267 (2.42)*
0.166 (0.89)
0.822 (1.25)
1.561 (3.39)**
1.520 (5.88)**
0.969 (3.92)**
0.791 (2.66)**
0.577 (4.95)**
0.256 (1.58)
-0.090 (0.18)
0.503 (1.73)
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RESULTS (continued)
EXPLANATORY VARIABLES
Tenancy of household (base category: Owner occupied)
Unfurnished rented / leased
Furnished rented / leased
Rent free
Squatted
Other
Area of residence (base category: Port Of Spain)
San Fernando
Arima
Chaguanas
Point Fortin
Diego Martin
San Juan / Laventille
Tunapuna / Piarco
Couva / Tabaquite / Talparo
Mayaro / Rio Claro
Sangre Grande
Princes Town
Penal / Debe
Siparia
Tobago
Constant
Observations
POOR
0.529 (4.31)**
0.678 (2.60)**
0.846 (6.41)**
0.388 (0.90)
-0.727 (0.99)
-0.240 (0.84)
0.004 (0.01)
-0.430 (1.45)
-0.169 (0.51)
-0.481 (1.91)
-0.662 (2.88)**
-0.759 (3.19)**
-0.570 (2.16)*
-0.150 (0.37)
-0.435 (1.36)
-1.096 (3.63)**
-0.505 (1.54)
-0.348 (1.06)
-0.768 (2.42)*
-2.876 (7.17)**
1,170
Robust standard errors are reported in parentheses.
*Significant at 10%; **significant at 5%
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FINDINGS
 Household size and number of children
per household significantly influences
poverty
 Single parent-headed households are
more likely to live below the poverty line
 When compared to single persons, legally
separated couples are significantly less
likely to be poor
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FINDINGS (continued)
 Education has an important influence on poverty
The main employment of the head significantly influenced
the probability of being poor
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FINDINGS (continued)
Households that rented were
significantly more likely than
their counterparts to be poor
Area of residence is a major
determinant of poverty
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RECOMMENDATIONS & CONCLUSION
 Greater
emphasis should be placed on poverty correlates such as
household size and composition
 More attention should be placed on investing in tertiary level
education that directly targets low income families
 Social protection coverage as it relates to periodically
unemployed workers should be made a priority policy area
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THANK YOU
FOR YOUR
ATTENTION
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