a thesis statement on poverty

‘Poverty Is The Parent Of Revolution And Crime’ – Aristotle

• September 15, 2020
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Poor countries are disproportionately affected by domestic war and other forms of conflict. The World Bank acknowledges that “on average, a country that experiences major violence has a poverty rate significantly higher than a country that had no violence.” The ten poorest countries, as reported by the World Bank in 2019, have a GDP per capita of less than USD 600. The list includes war-ridden countries such as Sudan, Afghanistan, the Central African Republic, and the Democratic Republic of Congo. Of course, there are outliers – Malawi and Sierra Leone, for example, ranked 59th and 46th, respectively, on the Global Peace Index. The index weighs factors including a country’s level of violent crime, political terror, conflicts fought, and percentage of displaced people. Of the top ten richest countries represented on the Global Peace Index, all but one ranked in the top 27th. Four ranked within the top ten, with Iceland placing 1st. This stark contrast paints a harsh picture of the relationship between wealth and peace.

The first of the United Nations Sustainable Development Goals is to “end poverty in all its forms everywhere.” The World Bank reported a decrease in global poverty of approximately 26% between 1990 and 2015. These years saw nearly 1.1 billion people leave extreme poverty (began earning more than USD 1.90 a day). Increased productivity and the expansion of the middle class are largely responsible for this reduction in global poverty.

However, COVID-19 raises serious concerns that this progress may be reversed. It is likely that those who can least afford to weather it will feel the global recession the most. The United Nations University World Institute for Development Economics Research predicts that the pandemic is likely to increase global poverty by 500 million people – 8% of the global population. Further, the World Bank estimates that between 40-60 million people may fall into the category of extreme poverty.

Not enough is being done to eradicate poverty and create a more equitable distribution of resources. According to the United Nations, nearly one in every ten employed workers lived in extreme poverty in 2018. Approximately 20,000 people die every day from malnutrition when the earth has enough resources to feed the world one and a half times over. In 2017, Oxfam, a charitable organization, revealed that the “world’s richest 1% get 82% of the [world’s] wealth.” Oxfam also claimed that the 22 wealthiest men on earth have more wealth than all the women in Africa – of which there are over 500 million.

The UN Millennium Project found that poor countries are “more likely to have weak governments.” Weak government institutions positively reinforce poverty because state institutions rely on public funding to maintain public goods, such as education, trade regulations, the justice system, police forces, and healthcare. When state institutions are insufficiently funded, the goods they can provide to the public are limited. In 2000, the World Health Organization ranked 191 countries’ health system performance. In that same year, the ten countries with the lowest GDP per capita all ranked lower than 143 rd place. Myanmar and Sierra Leonne ranked 190 th and 191 st , respectively. Without the resources to enable taxpayers to prosper, public institutions further diminish their source of income, trapping poor countries in a vicious cycle.

“Poor and hungry societies are much more likely than high-income societies to fall into conflict over scarce vital resources, such as watering holes and arable land,” says the UN Millennium Project. In 1997, the Democratic Republic of Congo (DRC) hurdled into a civil war. In that same year, DRC also experienced its lowest GDP per capita (USD 140) since it gained independence in 1960. Militia groups and the country’s military fought for control over the country’s east, and although the war technically ended in 2004, internal conflict continues. Many militia groups extract the county’s natural resources, particularly coltan, which is plentiful in DRC. Tantalum, which is extracted from coltan, is a common – and, therefore, highly sought-after – component in electrical devices like mobile phones. Guerillas have exploited these resources to fund weapon purchases. In 2012, the United States implemented the Dodd-Frank Act to ban companies from using “conflict materials” like tantalum. However, this had the unintended consequence of increasing unemployment in the industry. As their poverty worsened, many of the newly unemployed workers were driven to join militia groups instead.

Poverty is not the only cause of war. A country’s socio-political environment, its history, or its geography may all be factors. Wars also often have a religious or ethnic component. Whether poverty is a cause of war or merely a symptom, it reinforces the likelihood of internal conflict.

The cost of poverty is too high. Poverty is intolerable on its own. Paired with an increased likelihood of war, it is beyond unjustifiable. It is relatively easier for developed countries to look inward and prioritize inequalities at home. However, it is a global responsibility to eliminate all forms of poverty, everywhere. To eradicate poverty, world leaders must first let go of their nationalistic ideologies. Barack Obama once said, “As the wealthiest nation on Earth, I believe the United States has a moral obligation to lead the fight against hunger and malnutrition, and to partner with others.” This “we are all in this together” philosophy will be essential if the world has any hope of achieving the United Nation’s target of eliminating extreme poverty by 2030.

Changing the world’s wealth distribution will rely heavily on rich countries. The developed world holds an inequitable amount of wealth. Free from political or religious motives, privileged countries should work collaboratively to raise the standard of living in the poorest countries. This will mean less money to spend on domestic issues. However, in perspective, it makes sense for the world to focus its resources on those who need them most. This is not to say developed countries should not spend public money at home – they should. It is to say that where first world countries can go without, they should, to help their neighbors. The biggest barrier to this approach is the peoples’ capacity for compassion. Compassion will dictate the sacrifices people are willing to endure. In turn, this will influence the countries’ political will to substantially help those in need.

Billionaires are a first world problem, but they affect us all. A large proportion of the world’s wealth is heavily concentrated on a small percentage of the upper class. According to an analysis by Forbes, the top 10 richest men hold more wealth than many countries, the likes of Saudi Arabia, Switzerland, Turkey, and Belgium included. One person should not legally be allowed to have more money than they can spend, while another does not have enough to eat. Ending the era of billionaires would drastically narrow the income inequality gap.

Beyond all else, people must believe they can lift the world out of poverty. The world has already achieved more than it thought possible. International newspaper The Economist reported in 2017 that “someone escapes extreme poverty every 1.2 seconds.” In 2015, 1.1 billion fewer people were living in extreme poverty than there were in 1950. That should be evidence enough that change is possible.

Eradicating global poverty is not insurmountable. It will be hard. But it is necessary.

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Thesis Statement on Poverty

Poverty thesis statements: writing ideas and guidelines.

The problem of indigence and bareness of the people today are the main ones around the world. Each state that faces these difficulties is looking for ways to change the situation to better. Students as future specialists in various fields are invited to reflect on this situation and find the reasonable solutions in poverty essay.

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What Is Poverty Thesis in Details

An essay on poverty is a student’s personal reflection on a particular topic, the basis of which is the phenomenon of bareness. This task involves sociological and economic research, as well as the formulation of your own vision of the problem and ways to solve it.

Your Poverty Thesis: What Can Be Reflected in It

Poverty essay thesis is the statement, the validity of which will be justified in the process of writing. For example, a student can say that bareness can be overcome at the global level by directing the forces of developing states to help underdeveloped countries. Thus, the task of an essay about poverty will be to develop an approximate plan of action to address the problem.

How to Compose Poverty Essay Introduction: Write It Catching

Since this type of work implies thinking about a serious socio-economic problem, then your poverty essay introduction should be catchy, interesting and maybe even a little shocking. We want to show you a simple introduction you can focus on. Here is an example of how to write a good introduction for poverty essay.

At the very moment when most of us are sitting in warm houses, and our refrigerators are full of food, somewhere very far away, one billion people are on the brink of survival because of bareness. Turning to statistics, we learn that 200 years ago this figure was equally the same. What does it mean? It cannot be that two hundred years, for which humanity has made an incredible leap in all the spheres, have been wasted. In fact, the difference is that than about four-fifths of the share in the world belonged to the indigent, and today — one of five. The population of the Earth has increased, and the problem has remained and has grown to even more unthinkable scales.

What to State in Poverty Essay Conclusion: The Final Thought

The poverty essay conclusion should be as memorable as the introduction. If you are striving for originality, you can end your work with the phrase of a philosopher or economist, or leave a rhetorical question if the topic of the essay allows you to do so.

Thesis Statement for Poverty and Some Ideas for What to Write

Here are some poverty essay topics and brief overviews of what can you write about to reveal one or another matter.

Your “What is poverty” essay can disclose this issue from different angles. Social bareness refers to the poor segments of the society, as well as badly protected ones, while the economics refers to able-bodied citizens. It is this division that aids specialists in looking for effective ways of solving difficulties because for every these segment the issue of bareness is related to its specific traits and features.

This question worries the scientists in the sphere of the economics around the world. The main reasons for this situation are low life quality due to small incomes, inadequate property security for the humans (primarily housing). Low levels of income are associated with personal characteristics: poor health, low competitiveness in the labor market, inadequate education, disability, low level of life in families, and much more. Addressing each item, in turn, it is real to address the issue of bareness in the world or make the situation better.

Poverty Thesis Statements: Evolution of Perspectives

Previously, there was not enough reason to believe that poor people have any potential; it was believed that the existence of bareness was inevitable. It was even argued that it is indispensable for economic progress since without it no one will be engaged in agriculture, working in factories and army headquarters. In this essay, you can compare the views of modern economists and scientists of previous centuries.

The problem of the economic security provision of the individual is increasingly exacerbated in unstable states. In the process of writing your essay, think about how a citizen can protect himself and what needs to be done at the state level, so that everyone feels more protected.

Despite the colossal scientific and technological progress that accompanied the world in the twentieth century, social inequality is only growing in the modern world. Moreover, social differentiation is aggravated in all countries around the world including industrial countries. The poor become even poorer, and the rich are even richer. Devote your essay to studying the root causes of this situation and propose a solution.

The poverty essay outline will include a standard structure of the essay. Making a plan for yourself, break your text into several sub-questions, which you will cover in the process of argumentation. You can even initially build your work in the form of questions and answers, and then turn it into a textual unity.

Poverty and Its Effects on Women Research Paper

Thesis statement, introduction, reasons of poverty, positive effects of poverty, negative effects, effects on the governmental level, avoiding poverty.

Poverty is regarded to be one of the most serious problems in the world. It is argued that the difference between the Golden Billiard and the poorest population has 250% increased for the latest decade (Berrick, 2007, p. 68). As for the poverty among women, it should be stated that women experience more disasters from poverty then men, and the reason of this disparity is covered not only in discrimination, but also in the fact that poor women often have to raise children alone. This paper is aimed to analyze the effect of poverty on women, define whether there are positive effects of poverty, and explain the effects on the governmental level: how the troubles of poverty are solved, and how they may be avoided.

Originally, poverty is regarded to be the deprivation of the essential needs and requirements, which is caused by the decreased general welfare, unemployment or inflation. Sometimes these three factors are intermixed, and the situation appears to be the worst, from the viewpoint of the economic success. As for the poverty among women, it should be emphasized that the reasons of poverty among women differ from those among men, and the issues of poverty itself are more severe. It is also stated that the poverty among women seriously touches the welfare of their children.

The corresponding social researches revealed that women are at greater risk of poverty in comparison with men. The women’s testimonies in the surveys also revealed the fact that the policies of the governments often do not entail the necessary flexibilities, and tools for narrowing the poverty gap among between men and women. According to the latest statistics, the amount of poor women increased from 11,3 percent (in 2007) till 13.8 (in 2008). (Connolly, 2008, p.32).

As it has been already emphasized, the reasons of poverty may be different. However, poverty among women has its own, unique reasons. The fact is that, each poor women possesses unique personal features and financial reserves. Independently on the marital status, the challenge is great, as living in poverty and raising children are often the issues that come jointly.

According to the surveys, African American and Hispanic women are the poorest, and, mainly, it is closely linked with the matters of racial discrimination. More than 25% of black women and nearly 25% of Hispanic women are poor. As it may be seen, the rates of poverty among white women is twice lower (11.6%).

The fact is that, women are often paid less than men, even if they have the same jobs, work equal hours and have similar qualifications. Women, working full time get only 77 percent of the salary that men earn, also working full time. Thus, this 23 percent gap makes women poorer. This gap is reasoned not by the lack of training or qualification, but the banal discrimination. The researches reveal that in 2007, women with bachelor qualifications were paid 14% less than men with similar qualifications (Buvinic, 2007, p. 45).

Arguing on the matter of salary gap, it is emphasized that women are highly segregated, as they are paid less, and if the job is dominated by women, it is not originally highly paid. Women are tracked into such called Pink-Collar jobs: these are teaching, child care, nursing, cleaning, and waitressing, which are originally paid less, than the male-dominated jobs.

Taking into account the factor of marital status, it is well known that divorced women bear the childcare costs more often than the divorced men do. Women are more often subjected to unpaid care giving (children, disabled close people, sometimes animals etc.). Consequently that gender wage gap increases.

Luckily, this gap is not inevitable, and it has decreased for the recent 30 years. Currently, more women have an opportunity to get the desired job, and increase the welfare of their families. Nevertheless, this gap is still serious, and discrimination is high (Connolly, 2008, p. 67).

In spite of the fact that poverty touches women more severely, it is necessary to highlight that women often overcome the troubles and the consequences of poverty braver than men do. Originally, women’s mind is more powerful, as they often have more reasons to live, and often have someone to take care of. Thus, women realize that someone else depends on them, and women often have more motivations to overcome the consequences and disasters of poverty.

Women who were not always poor struggle for the re-achievement of the welfare even more severely, as they feel the necessity and obligation to restore the wellbeing of their families. Those, who lost their jobs, and appeared at the poverty line are ready for almost everything in order to save the family life and the wellbeing of the family. They agree for physical and low paid jobs, if there are no other alternatives, they get employed for two or even three jobs, work over time and night shifts.

The stresses and constant loads (moral or physical) may have positive effects, as women may lose some weight, and achieve the perfect physical condition. Thus, when the disaster finishes, a women may have an improved figure, that she has always dreamt for. Poverty changes the view of the surrounding world, and often causes the changes in the attitude to other people. Anyway, overcoming difficulties is the life experience, that is the most precious thing in this life, as basing on the life experience people plan their further life, and try not to drop the same brick the next time.

Another fact, that may be attributed to positive effects of poverty among women, is that there are more homeless men, than women. Taking into consideration, that the percentage of poverty among women is higher than among men, this indicator is rather impressive. Consequently, it only confirms the statement, that women overcome the consequences and disaster of poverty more bravely.

Poverty may have the opposite effect, and quite different reasons, if a women does not have anyone to give care to. These women are more subjected to drug and alcohol addiction, they ma commit suicide, or participate in street gangs. This effect changes to opposite depending on a factor of care giving, as the very nature of women is based on care giving.

The stories, that are represented in novels, movies, either real or fictional represent the women, who struggle for their own, and their families’ wellbeing. Surely, if there is a family – there is strong motivation for taking care of it, and these women do everything possible to overcome poverty. Surely, there are also the exceptions, however these women are deprived the parents’ rights, and, finally, they do not have anyone to take care of, except pets.

Poverty among women frequently causes high rates of poverty among children. This mainly relates the latter examples, as children of the parents, whose parental rights were deprived, often do not wish to stay in the children’s houses, and escape to live in streets. This is the reason of children’s prostitution, high rates of death among children and, surely, crime among children (Dujon, 2006, p. 15).

As for the effects, which are not associated with family and care giving, there may be the effects, closely linked with health, fitness, appearance and others. Originally, poor people eat worse food than the others, as they can not afford the balanced healthy diet. Consequently, these people (not only women) gain or lose weight, acquire deceases such as tuberculosis, ulcer, skin deceases and others, closely linked with nutrition and living conditions. Most people move to cheaper apartments in order to be able to pay for them. It causes the psychological stress, which may give impulse for the development of some concealed decease. The new environment may contain offending allergens, parasites or other decease transmitting insects. The increased stress, long-lasting hunger, unfavorable environment may cause the stopping of the women’s reproductive function, and cause other serious damages to health.

Poverty, as the national disaster requires the governmental solution, in order to have the essential effect. These solutions are often reasoned in the law projects, that include the child, unemployment allowances, allowances to mothers of large families and others. These are the significant attempts to overcome the poverty, however, they are often reasoned by the increased rates of poverty, as there is generally no need to pay allowances, if the rates are not too high. When the rates increase, the people become more unsatisfied, and government is forced to restore the financial balance by paying allowances.

These issues always reason the appearance of the corresponding legislative basement and the necessary experience for creating the further laws associated with the increase of welfare of the peoples (Dujon, 2006, p. 24).

The high rates of poor women reason the appearing of special hospitals, where the women may be granted qualified and free of charge medical assistance, especially if a woman has a suckling baby. Poor women are treated as the people entitled to special benefits, and have the advantages in employment, healthcare, legislative maintenance and other spheres of life. These women may buy the goods for the reduced prices, especially if they need to feed a kid, or several children.

The fact is that, poverty may be avoided, if both sides (citizens and government) are strongly intended to avoid it. Citizens should reasonably follow their finances and follow the financial situation in the country. Shortly, it is necessary not to spend money flippantly. The government, in its turn, should steadily develop the economy of the state, and do everything in order to increase the welfare of the majority of the citizens. Thus, the mutually supported actions may help to avoid poverty. However, there are still countries in the world, where the governments are not interested in the welfare of their peoples. Citizens of these States are obliged to everything in order to keep their families, and sometimes they commit crimes, or sell their organs for illegal transplantations. Poor women in these countries often do not have an opportunity to mind the rules of hygiene, and their children are often born with the inborn deficiencies, or serious deceases.

The effect of poverty on women may be either positive or negative. Actually, the positive impact is often indirect, and is often associated with the health or some benefits offered at the governmental level. As for the negative, they are also mainly indirect, and relate the issues of health, parental rights, living environment and stresses. Originally, all the consequences may be overcome, and the statistics show, that women are more powerful in overcoming the difficulties of poverty than men, and, it is necessary to mention that women often have more motivations to go on living, as they have someone to live for. Care giving is the women’s nature, and this nature helps them to minimize the negative effects of poverty and survive during the disasters.

Finally, it is necessary to emphasize, that minimizing of the effects, that poverty may have, is the task of both sides – citizens, and government, as only joint actions and strong determination may solve this serious problem.

• Berrick, Jill Duerr. Faces of Poverty: Portraits of Women and Children on Welfare. New York: Oxford University Press, 2007.
• Buvinic, Mayra. “Women in Poverty: A New Global Underclass.” Foreign Policy 2007: 38
• Connolly, Deborah R. Homeless Mothers: Face to Face with Women and Poverty. Minneapolis: University of Minnesota Press, 2008.
• Dujon, Diane, and Ann Withorn, eds. For Crying out Loud: Women’s Poverty in the United States. Boston: South End Press, 2006.
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The Social Consequences of Poverty: An Empirical Test on Longitudinal Data

Carina mood.

Institute for Futures Studies, Box 591, 101 31 Stockholm, Sweden

Swedish Institute for Social Research (SOFI), Stockholm University, Stockholm, Sweden

Jan O. Jonsson

Nuffield College, OX1 1NF Oxford, England, UK

Poverty is commonly defined as a lack of economic resources that has negative social consequences, but surprisingly little is known about the importance of economic hardship for social outcomes. This article offers an empirical investigation into this issue. We apply panel data methods on longitudinal data from the Swedish Level-of-Living Survey 2000 and 2010 (n = 3089) to study whether poverty affects four social outcomes—close social relations (social support), other social relations (friends and relatives), political participation, and activity in organizations. We also compare these effects across five different poverty indicators. Our main conclusion is that poverty in general has negative effects on social life. It has more harmful effects for relations with friends and relatives than for social support; and more for political participation than organizational activity. The poverty indicator that shows the greatest impact is material deprivation (lack of cash margin), while the most prevalent poverty indicators—absolute income poverty, and especially relative income poverty—appear to have the least effect on social outcomes.

Introduction

According to the most influential definitions, poverty is seen as a lack of economic resources that have negative social consequences—this is in fact a view that dominates current theories of poverty (Townsend 1979 ; Sen 1983 ; UN 1995 ), and also has a long heritage (Smith 1776 /1976). The idea is that even when people have food, clothes, and shelter, economic problems lead to a deterioration of social relations and participation. Being poor is about not being able to partake in society on equal terms with others, and therefore in the long run being excluded by fellow citizens or withdrawing from social and civic life because of a lack of economic resources, typically in combination with the concomitant shame of not being able to live a life like them (e.g., Sen 1983 ). Economic hardship affects the standard of life, consumption patterns, and leisure time activities, and this is directly or indirectly related to the possibility of making or maintaining friends or acquaintances: poverty is revealed by not having appropriate clothes, or a car; by not being able to afford vacation trips, visits to the restaurant, or hosting dinner parties (e.g., Mack and Lansley 1985 ; Callan et al. 1993 )—in short, low incomes prevent the poor from living a life in “decency” (Galbraith 1958 ).

The relational nature of poverty is also central to the social exclusion literature, which puts poverty in a larger perspective of multiple disadvantages and their interrelationships (Hills et al. 2002 , Rodgers et al. 1995 ; Room 1995 ). While there are different definitions of the social exclusion concept, the literature is characterized by a move from distributional to relational concerns (Gore 1995 ) and by an emphasis on the importance of social integration and active participation in public life. The inability of living a decent or “ordinary” social life may in this perspective erode social networks, social relations, and social participation, potentially setting off a downward spiral of misfortune (Paugam 1995 ) reinforcing disadvantages in several domains of life. This perspective on poverty and social exclusion is essentially sociological: the playing field of the private economy is social. It is ultimately about individuals’ relations with other people—not only primary social relations, with kin and friends, but extending to secondary relations reflected by participation in the wider community, such as in organizations and in political life (UN 1995 ).

Despite the fact that the social consequences of limited economic resources are central to modern perspectives on poverty and marginalization, this relation is surprisingly seldom studied empirically. Qualitative research on the poor give interesting examples on how the negative effects of poverty works, and portray the way that economic problems are transformed into social ones (Ridge and Millar 2011 ; Attree 2006 ). Such studies, however, have too small sample sizes to generalize to the population, and they cannot tell us much about the range of the problem. The (relatively few) studies that have addressed the association between poverty and social outcomes on larger scale tend to verify that the poor have worse social relations (Böhnke 2008 ; Jonsson and Östberg 2004 ; Levitas 2006 ), but Barnes et al. ( 2002 ) did not find any noteworthy association between poverty (measured as relative income poverty, using the 60 %-limit) and social relations or social isolation. Dahl et al. ( 2008 ) found no relation between poverty and friendships, but report less participation in civic organizations among the poor. All these studies have however been limited to cross-sectional data or hampered by methodological shortcomings, and therefore have not been able to address the separation of selection effects from potentially causal ones.

Our aim in this study is to make good these omissions. We use longitudinal data from the Swedish Level of Living Surveys (LNU) 2000 and 2010 to study how falling into poverty, or rising from it, is associated with outcomes in terms of primary and secondary social relations, including participation in civil society. These panel data make it possible to generalize the results to the Swedish adult population (19–65 in 2000; 29–75 in 2010), to address the issue of causality, and to estimate how strong the relation between economic vulnerability and social outcomes is. Because the data provide us with the possibility of measuring poverty in several ways, we are also able to address the question using different—alternative or complementary—indicators. Poverty is measured as economic deprivation (lack of cash margin, self-reported economic problems), income poverty (absolute and relative), and long-term poverty, respectively. The primary, or core, social outcomes are indicated by having social support if needed, and by social relations with friends and relatives. We expand our analysis to secondary, or fringe, social outcomes in terms of participation in social life at large, such as in civil society: our indicators here include the participation in organizations and in political life.

Different Dimensions/Definitions of Poverty

In modern welfare states, the normal take on the issue of poverty is to regard it as the relative lack of economic resources, that is, to define the poor in relation to their fellow citizens in the same country at the same time. Three approaches dominate the scholarly literature today. The first takes as a point of departure the income deemed necessary for living a life on par with others, or that makes possible an “acceptable” living standard—defined as the goods and services judged necessary, often on the basis of consumer or household budget studies. This usage of a poverty threshold is often (somewhat confusingly) called absolute income poverty , and is most common in North America (cf. Corak 2006 for a review), although most countries have poverty lines defined for different kinds of social benefits. In Europe and in the OECD, the convention is instead to use versions of relative income poverty , defining as poor those whose incomes fall well behind the median income in the country in question (European Union using 60 % and OECD 50 % of the median as the threshold). As an alternative to using purchasing power (as in the “absolute” measure), this relative measure defines poverty by income inequality in the bottom half of the income distribution (Atkinson et al. 2002 ; OECD 2008 ).

The third approach argues that income measures are too indirect; poverty should instead be indicated directly by the lack of consumer products and services that are necessary for an acceptable living standard (Mack and Lansley 1985 ; Ringen 1988 ; Townsend 1979 ). This approach often involves listing a number of possessions and conditions, such as having a car, washing machine, modern kitchen; and being able to dine out sometimes, to have the home adequately heated and mended, to have sufficient insurances, and so on. An elaborate version includes information on what people in general see as necessities, what is often termed “consensual” poverty (e.g., Mack and Lansley 1985 ; Gordon et al. 2000 ; Halleröd 1995 ; van den Bosch 2001 ). Other direct indicators include the ability to cover unforeseen costs (cash margin) and subjective definitions of poverty (e.g., van den Bosch 2001 ). The direct approach to poverty has gained in popularity and measures of economic/material deprivation and consensual poverty are used in several recent and contemporary comparative surveys such as ECHP (Whelan et al. 2003 ) and EU-SILC (e.g., UNICEF 2012 ; Nolan and Whelan 2011 ).

It is often pointed out that, due to the often quite volatile income careers of households, the majority of poverty episodes are short term and the group that is identified as poor in the cross-section therefore tends to be rather diluted (Bane and Ellwood 1986 ; Duncan et al. 1993 ). Those who suffer most from the downsides of poverty are, it could be argued, instead the long-term, persistent, or chronically poor, and there is empirical evidence that those who experience more years in poverty also are more deprived of a “common lifestyle” (Whelan et al. 2003 ). Poverty persistence has been defined in several ways, such as having spent a given number of years below a poverty threshold, or having an average income over a number of years that falls under the poverty line (e.g., Duncan and Rodgers 1991 ; Rodgers and Rodgers 1993 ). The persistently poor can only be detected with any precision in longitudinal studies, and typically on the basis of low incomes, as data covering repeated measures of material deprivation are uncommon.

For the purposes of this study, it is not essential to nominate the best or most appropriate poverty measure. The measures outlined above, while each having some disadvantage, all provide plausible theoretical grounds for predicting negative social outcomes. Low incomes, either in “absolute” or relative terms, may inhibit social activities and participation because these are costly (e.g., having decent housing, needing a car, paying membership fees, entrance tickets, or new clothes). Economic deprivation, often indicated by items or habits that are directly relevant to social life, is also a valid representation of a lack of resources. Lastly, to be in long-term poverty is no doubt a worse condition than being in shorter-term poverty.

It is worth underlining that we see different measures of poverty as relevant indicators despite the fact that the overlap between them often is surprisingly small (Bradshaw and Finch 2003 ). The lack of overlap is not necessarily a problem, as different people may have different configurations of economic problems but share in common many of the experiences of poverty—experiences, we argue, that are (in theory at least) all likely to lead to adverse social outcomes. Whether this is the case or not is one of the questions that we address, but if previous studies on child poverty are of any guidance, different definitions of poverty may show surprisingly similar associations with a number of outcomes (Jonsson and Östberg 2004 ).

What are the Likely Social Consequences of Poverty?

We have concluded that poverty is, according to most influential poverty definitions, manifested in the social sphere. This connects with the idea of Veblen ( 1899 ) of the relation between consumption and social status. What you buy and consume—clothes, furniture, vacation trips—in part define who you are, which group you aspire to belong to, and what view others will have of you. Inclusion into and exclusion from status groups and social circles are, in this view, dependent on economic resources as reflected in consumption patterns. While Veblen was mostly concerned about the rich and their conspicuous consumption, it is not difficult to transfer these ideas to the less fortunate: the poor are under risk of exclusion, of losing their social status and identity, and perhaps also, therefore, their friends. It is however likely that this is a process that differs according to outcome, with an unknown time-lag.

If, as outlined above, we can speak of primary and secondary social consequences, the former should include socializing with friends, but also more intimate relations. Our conjecture is that the closer the relation, the less affected is it by poverty, simply because intimate social bonds are characterized by more unconditional personal relations, typically not requiring costs to uphold.

When it comes to the secondary social consequences, we move outside the realm of closer interpersonal relations to acquaintances and the wider social network, and to the (sometimes relatively anonymous) participation in civil or political life. This dimension of poverty lies at the heart of the social exclusion perspective, which strongly emphasizes the broader issues of societal participation and civic engagement, vital to democratic societies. It is also reflected in the United Nation’s definition, following the Copenhagen summit in 1995, where “overall poverty” in addition to lack of economic resources is said to be “…characterized by lack of participation in decision-making and in civil, social, and cultural life” (UN 1995 , p. 57). Poverty may bring about secondary social consequences because such participation is costly—as in the examples of travel, need for special equipment, or membership fees—but also because of psychological mechanisms, such as lowered self-esteem triggering disbelief in civic and political activities, and a general passivity leading to decreased organizational and social activities overall. If processes like these exist there is a risk of a “downward spiral of social exclusion” where unemployment leads to poverty and social isolation, which in turn reduce the chances of re-gaining a footing in the labour market (Paugam 1995 ).

What theories of poverty and social exclusion postulate is, in conclusion, that both what we have called primary and secondary social relations will be negatively affected by economic hardship—the latter supposedly more than the former. Our strategy in the following is to test this basic hypothesis by applying multivariate panel-data analyses on longitudinal data. In this way, we believe that we can come further than previous studies towards estimating causal effects, although, as is the case in social sciences, the causal relation must remain preliminary due to the nature of observational data.

Data and Definitions

We use the two most recent waves of the Swedish Level-of-living Survey, conducted in 2000 and 2010 on random (1/1000) samples of adult Swedes, aged 18–75. 1 The attrition rate is low, with 84 % of panel respondents remaining from 2000 to 2010. This is one of the few data sets from which we can get over-time measures of both poverty and social outcomes for a panel that is representative of the adult population (at the first time point, t 0 )—in addition, there is annual income information from register data between the waves. The panel feature obviously restricts the age-groups slightly (ages 19–65 in 2000; 29–75 in 2010), the final number of analyzed cases being between 2995 and 3144, depending on the number of missing cases on the respective poverty measure and social outcome variable. For ease of interpretation and comparison of effect sizes, we have constructed all social outcome variables and poverty variables to be dichotomous (0/1). 2

In constructing poverty variables, we must balance theoretical validity with the need to have group sizes large enough for statistical analysis. For example, we expand the absolute poverty measure to include those who received social assistance any time during the year. As social assistance recipients receive this benefit based on having an income below a poverty line that is similar to the one we use, this seems justifiable. In other cases, however, group sizes are small but we find no theoretically reasonable way of making the variables more inclusive, meaning that some analyses cannot be carried out in full detail.

Our income poverty measures are based on register data and are thus free from recall error or misreporting, but—as the proponents of deprivation measures point out—income poverty measures are indirect measures of hardship. The deprivation measure is more direct, but self-reporting always carries a risk of subjectivity in the assessment. To the extent that changes in one’s judgment of the economic situation depend on changes in non-economic factors that are also related to social relations, the deprivation measure will give upwardly biased estimates. 3 As there is no general agreement about whether income or deprivation definitions are superior, our use of several definitions is a strength because the results will give an overall picture that is not sensitive to potential limitations in any one measure. In addition, we are able to see whether results vary systematically across commonly used definitions.

Poverty Measures

• Cash margin whether the respondent can raise a given sum of money in a week, if necessary (in 2000, the sum was 12,000 SEK; in 2010, 14,000 SEK, the latter sum corresponding to approximately 1600 Euro, 2200 USD, or 1400 GBP in 2013 currency rates). For those who answer in the affirmative, there is a follow-up question of how this can be done: by (a) own/household resources, (b) borrowing.
• Economic crisis Those who claim that they have had problems meeting costs for rent, food, bills, etc. during the last 12 months (responded “yes” to a yes/no alternative).
• Absolute poverty is defined as either (a) having a disposable family income below a poverty threshold or (b) receiving social assistance, both assessed in 1999 (for the survey 2000) or 2009 (for the survey 2010). The poverty line varies by family type/composition according to a commonly used calculation of household necessities (Jansson 2000 ). This “basket” of goods and services is intended to define an acceptable living standard, and was originally constructed for calculating an income threshold for social assistance, with addition of estimated costs for housing and transport. The threshold is adjusted for changes in the Consumer Price Index, using 2010 as the base year. In order to get analyzable group sizes, we classify anyone with an income below 1.25 times this threshold as poor. Self-employed are excluded because their nominal incomes are often a poor indicator of their economic standard.
• Deprived and income poor A combination of the indicator of economic deprivation and the indicator of absolute poverty. The poor are defined as those who are economically deprived and in addition are either absolute income-poor or have had social assistance some time during the last calendar year.
• Long - term poor are defined as those interviewed in 2010 (2000) who had an equivalized disposable income that fell below the 1.25 absolute poverty threshold (excluding self-employed) or who received social assistance in 2009 (1999), and who were in this situation for at least two of the years 2000–2008 (1990–1998). The long-term poor (coded 1) are contrasted to the non-poor (coded 0), excluding the short-term poor (coded missing) in order to distinguish whether long-term poverty is particularly detrimental (as compared to absolute poverty in general).
• Relative poverty is defined, according to the EU standard, as having a disposable equivalized income that is lower than 60 % of the median income in Sweden the year in question (EU 2005). 4 As for absolute poverty, this variable is based on incomes the year prior to the survey year. Self-employed are excluded.

Social and Participation Outcomes

Primary (core) social relations.

• Social support The value 1 (has support) is given to those who have answered in the positive to three questions about whether one has a close friend who can help if one (a) gets sick, (b) needs someone to talk to about troubles, or (c) needs company. Those who lack support in at least one of these respects are coded 0 (lack of support).
• Frequent social relations This variable is based on four questions about how often one meets (a) relatives and (b) friends, either (i) at ones’ home or (ii) at the home of those one meets, with the response set being “yes, often”, “sometimes”, and “no, never”. Respondents are defined as having frequent relations (1) if they have at least one “often” of the four possible and no “never”, 5 and 0 otherwise.

Secondary (fringe) Social Relations/Participation

• Political participation : Coded 1 (yes) if one during the last 12 months actively participated (held an elected position or was at a meeting) in a trade union or a political party, and 0 (no) otherwise. 6
• Organizational activity : Coded 1 (yes) if one is a member of an organization and actively participate in its activities at least once in a year, and 0 (no) otherwise.

Control Variables

• Age (in years)
• Educational qualifications in 2010 (five levels according to a standard schema used by Statistics Sweden (1985), entered as dummy variables)
• Civil status distinguishes between single and cohabiting/married persons, and is used as a time-varying covariate (TVC) where we register any changes from couple to single and vice versa.
• Immigrant origin is coded 1 if both parents were born in any country outside Sweden, 0 otherwise.
• Labour market status is also used as a TVC, with four values indicating labour market participation (yes/no) in 2000 and 2010, respectively.
• Global self - rated health in 2000, with three response alternatives: Good, bad, or in between. 7

Table  1 shows descriptive statistics for the 2 years we study, 2000 and 2010 (percentages in the upper panel; averages, standard deviations, max and min values in the lower panel). Recall that the sample is longitudinal with the same respondents appearing in both years. This means, naturally, that the sample ages 10 years between the waves, the upper age limit being pushed up from 65 to 75. Both the change over years and the ageing of the sample have repercussions for their conditions: somewhat more have poor health, for example, fewer lack social support but more lack frequent social relations, and more are single in 2010 (where widows are a growing category). The group has however improved their economic conditions, with a sizeable reduction in poverty rates. Most of the changes are in fact period effects, and it is particularly obvious for the change in poverty—in 2000 people still suffered from the deep recession in Sweden that begun in 1991 and started to turn in 1996/97 (Jonsson et al. 2010 ), while the most recent international recession (starting in 2008/09) did not affect Sweden that much.

Table 1

Descriptive statistics of dependent and independent variables in the LNU panel

N for variables used as change variables pertains to non-missing observations in both 2000 and 2010

The overall decrease in poverty masks changes that our respondents experienced between 2000 and 2010: Table  2 reveals these for the measure of economic deprivation, showing the outflow (row) percentages and the total percentages (and the number of respondents in parentheses). It is evident that there was quite a lot of mobility out of poverty between the years (61 % left), but also a very strong relative risk of being found in poverty in 2010 among those who were poor in 2000 (39 vs. 5 % of those who were non-poor in 2000). Of all our respondents, the most common situation was to be non-poor both years (81 %), while few were poor on both occasions (6 %). Table  2 also demonstrates some small cell numbers: 13.3 % of the panel (9.4 % + 3.9 %), or a good 400 cases, changed poverty status, and these cases are crucial for identifying our models. As in many panel studies based on survey data, this will inevitably lead to some problems with large standard errors and difficulties in arriving at statistically significant and precise estimates; but to preview the findings, our results are surprisingly consistent all the same.

Table 2

Mobility in poverty (measured as economic deprivation) in Sweden between 2000 and 2010

Outflow percentage (row %), total percentage, and number of cases (in parentheses). LNU panel 2000–2010

We begin with showing descriptive results of how poverty is associated with our outcome variables, using the economic deprivation measure of poverty. 8 Figure  1 confirms that those who are poor have worse social relationships and participate less in political life and in organizations. Poverty is thus connected with both primary and secondary social relations.

The relation between poverty (measured as economic deprivation) and social relations/participation in Sweden, LNU 2010. N = 5271

The descriptive picture in Fig.  1 does not tell us anything about the causal nature of the relation between poverty and social outcomes, only that such a relation exists, and that it is in the predicted direction: poor people have weaker social relations, less support, and lower levels of political and civic participation. Our task now is to apply more stringent statistical models to test whether the relation we have uncovered is likely to be of a causal nature. This means that we must try to rid the association of both the risk for reverse causality—that, for example, a weaker social network leads to poverty—and the risk that there is a common underlying cause of both poverty and social outcomes, such as poor health or singlehood.

The Change Model

First, as we have panel data, we can study the difference in change across two time-points T (called t 0 and t 1 , respectively) in an outcome variable (e.g., social relations), between groups (i.e. those who changed poverty status versus those who did not). The respondents are assigned to either of these groups on the grounds of entering or leaving poverty; in the first case, one group is non-poor at t 0 but experiences poverty at t 1 , and the change in this group is compared to the group consisting of those who are non-poor both at t 0 and t 1 . The question in focus then is: Do social relations in the group entering poverty worsen in relation to the corresponding change in social relations in the group who remains non-poor? Because we have symmetric hypotheses of the effect of poverty on social outcomes—assuming leaving poverty has positive consequences similar to the negative consequences of entering poverty—we also study whether those who exit poverty improve their social outcomes as compared to those remaining poor. We ask, that is, not only what damage falling into poverty might have for social outcomes, but also what “social gains” could be expected for someone who climbs out of poverty.

Thus, in our analyses we use two different “change groups”, poverty leavers and poverty entrants , and two “comparison groups”, constantly poor and never poor , respectively. 9 The setup comparing the change in social outcomes for those who change poverty status and those who do not is analogous to a so-called difference-in-difference design, but as the allocation of respondents to comparison groups and change groups in our data cannot be assumed to be random (as with control groups and treatment groups in experimental designs), we take further measures to approach causal interpretations.

Accounting for the Starting Value of the Dependent Variable

An important indication of the non-randomness of the allocation to the change and comparison groups is that their average values of the social outcomes (i.e. the dependent variable) at t 0 differ systematically: Those who become poor between 2000 and 2010 have on average worse social outcomes already in 2000 than those who stay out of poverty. Similarly, those who stay in poverty both years have on average worse social outcomes than those who have exited poverty in 2010. In order to further reduce the impact of unobserved variables, we therefore make all comparisons of changes in social outcomes between t 0 and t 1 for fixed t 0 values of both social outcome and poverty status.

As we use dichotomous outcome variables, we get eight combinations of poverty and outcome states (2 × 2 × 2 = 8), and four direct strategic comparisons:

• Poverty leavers versus constantly poor, positive social outcome in 2000 , showing if those who exit poverty have a higher chance of maintaining the positive social outcome than those who stay in poverty
• Poverty leavers versus constantly poor, negative social outcome in 2000 , showing if those who exit poverty have a higher chance of improvement in the social outcome than those who stay in poverty
• Poverty entrants versus never poor, positive social outcome in 2000 , showing if those who enter poverty have a higher risk of deterioration in the social outcome than those who stay out of poverty, and
• Poverty entrants versus never poor, negative social outcome in 2000 , showing if those who enter poverty have a lower chance of improvement in the social outcome.

Thus, we hold the initial social situation and poverty status fixed, letting only the poverty in 2010 vary. 10 The analytical strategy is set out in Table  3 , showing estimates of the probability to have frequent social relations in 2010, for poverty defined (as in Table  2 and Fig.  1 above) as economic deprivation.

Table 3

Per cent with frequent social relations in “comparison” and “change” groups in 2000 and 2010, according to initial value on social relations in 2000 and poverty (measured as economic deprivation) in 2000 and 2010

LNU panel 2000–2010. N = 3083

The figures in Table  3 should be read like this: 0.59 in the upper left cell means that among those who were poor neither in 2000 nor in 2010 (“never poor”, or 0–0), and who had non-frequent social relations to begin with, 59 % had frequent social relations in 2010. Among those never poor who instead started out with more frequent social relations, 90 per cent had frequent social relations in 2010. This difference (59 vs. 90) tells us either that the initial conditions were important (weak social relations can be inherently difficult to improve) or that there is heterogeneity within the group of never poor people, such as some having (to us perhaps unobserved) characteristics that support relation building while others have not.

Because our strategy is to condition on the initial situation in order to minimize the impact of initial conditions and unobserved heterogeneity, we focus on the comparisons across columns. If we follow each column downwards, that is, for a given initial social outcome (weak or not weak social relations, respectively) it is apparent that the outcome is worse for the “poverty entrants” in comparison with the “never poor” (upper three lines). Comparing the change group [those who became poor (0–1)] with the comparison group [never poor (0–0)] for those who started out with weak social relations (left column), the estimated probability of frequent social relations in 2010 is 7 % points lower for those who became poor. Among those who started out with frequent relations, those who became poor have a 17 % points lower probability of frequent relations in 2010 than those who stayed out of poverty.

If we move down Table  3 , to the three bottom lines, the change and comparison groups are now different. The comparison group is the “constantly poor” (1–1), and the change group are “poverty leavers” (1–0). Again following the columns downwards, we can see that the change group improved their social relations in comparison with the constantly poor; and this is true whether they started out with weak social relations or not. In fact, the chance of improvement for those who started off with non-frequent social relations is the most noteworthy, being 33 % units higher for those who escaped poverty than for those who did not. In sum, Table  3 suggests that becoming poor appears to be bad for social relations whereas escaping poverty is beneficial.

Expanding the Model

The model exemplified in Table  3 is a panel model that studies change across time within the same individuals, conditioning on their initial state. It does away with time-constant effects of observed and unobserved respondent characteristics, and although this is far superior to a cross-sectional model (such as the one underlying Fig.  1 ) there are still threats to causal interpretations. It is possible (if probably unusual) that permanent characteristics may trigger a change over time in both the dependent and independent variables; or, put in another way, whether a person stays in or exits poverty may be partly caused by a variable that also predicts change in the outcome (what is sometimes referred to as a violation of the “common trend assumption”). In our case, we can for example imagine that health problems in 2000 can affect who becomes poor in 2010, at t 1 , and that the same health problems can lead to a deterioration of social relations between 2000 and 2010, so even conditioning on the social relations at t 0 will not be enough. This we handle by adding control variables, attempting to condition the comparison of poor and non-poor also on sex, age, highest level of education (in 2010), immigrant status, and health (in 2000). 11

Given the set-up of our data—with 10 years between the two data-points and with no information on the precise time ordering of poverty and social outcomes at t 1 , the model can be further improved by including change in some of the control variables. It is possible, for example, that a non-poor and married respondent in 2000 divorced before 2010, triggering both poverty and reduced social relations at the time of the interview in 2010. 12 There are two major events that in this way may bias our results, divorce/separation and unemployment (because each can lead to poverty, and possibly also affect social outcomes). We handle this by controlling for variables combining civil status and unemployment in 2000 as well as in 2010. To the extent that these factors are a consequence of becoming poor, there is a risk of biasing our estimates downwards (e.g., if becoming poor increases the risk of divorce). However, as there is no way to distinguish empirically whether control variables (divorce, unemployment) or poverty changed first we prefer to report conservative estimates. 13

Throughout, we use logistic regression to estimate our models (one model for each social outcome and poverty definition). We create a dummy variable for each of the combinations of poverty in 2000, poverty in 2010 and the social outcome in 2000, and alternate the reference category in order to get the four strategic comparisons described above. Coefficients do thus express the distance between the relevant change and comparison groups. The coefficients reported are average marginal effects (AME) for a one-unit change in the respective poverty variable (i.e. going from non-poor to poor and vice versa), which are straightforwardly interpretable as percentage unit differences and (unlike odds ratios or log odds ratios) comparable across models and outcomes (Mood 2010 ).

Regression Results

As detailed above, we use changes over time in poverty and social outcomes to estimate the effects of interest. The effect of poverty is allowed to be heterogeneous, and is assessed through four comparisons of the social outcome in 2010 (Y 1 ):

• Those entering poverty relative to those in constant non-poverty (P 01  = 0,1 vs. P 01  = 0,0) when both have favourable social outcomes at t 0 (Y 0  = 1)
• Those exiting poverty relative to those in constant poverty (P 01  = 1,0 vs. P 01  = 1,1) when both have favourable social outcomes at t 0 (Y 0  = 1)
• Those entering poverty relative to those in constant non-poverty (P 01  = 0,1 vs. P 01  = 0,0) when both have non-favourable social outcomes at t 0 (Y 0  = 0)
• Those exiting poverty relative to those in constant poverty (P 01  = 1,0 vs. P 01  = 1,1) when both have non-favourable social outcomes at t 0 (Y 0  = 0)

Poverty is a rare outcome, and as noted above it is particularly uncommon to enter poverty between 2000 and 2010 because of the improving macro-economic situation. Some of the social outcomes were also rare in 2000. This unfortunately means that in some comparisons we have cell frequencies that are prohibitively small, and we have chosen to exclude all comparisons involving cells where N < 20.

The regression results are displayed in Table  4 . To understand how the estimates come to be, consider the four in the upper left part of the Table (0.330, 0.138, −0.175 and −0.065), reflecting the effect of poverty, measured as economic deprivation, on the probability of having frequent social relations. Because these estimates are all derived from a regression without any controls, they are identical (apart from using three decimal places) to the percentage comparisons in Table  3 (0.33, 0.14, −0.17, −0.07), and can be straightforwardly interpreted as average differences in the probability of the outcome in question. From Table  4 it is clear that the three first differences are all statistically significant, whereas the estimate −0.07 is not (primarily because those who entered poverty in 2010 and had infrequent social relations in 2000 is a small group, N = 25).

Table 4

Average marginal effects (from logistic regression) of five types of poverty (1–5) on four social outcomes (A-D) comparing those with different poverty statuses in 2000 and 2010 and conditioning on the starting value of the social outcome (in 2000)

Right columns control for sex, education, age, immigrant status, health in 2000, civil status change between 2000 and 2010, and unemployment change between 2000 and 2010. P values in parentheses. Excluded estimates involve variable categories with N < 20. Shaded cells are in hypothesized direction, bold estimates are statistically significant ( P  < 0.05). N in regressions: 1A: 3075; 1B: 3073; 1C: 3075; 1D: 3069; 2A: 3144; 2B: 3137; 2C: 3144; 2D: 3130; 3A: 3074, 3B: 3072; 3C: 3074; 3D: 3068; 4A: 2995; 4B: 2988; 4C: 2995; 4D: 2981; 5A: 3128; 5B: 3121; 5C: 3128; 5D: 3114

In the column to the right, we can see what difference the controls make: the estimates are reduced, but not substantially so, and the three first differences are still statistically significant.

The estimates for each social outcome, reflecting the four comparisons described above, support the hypothesis of poverty affecting social relations negatively (note that the signs of the estimates should differ in order to do so, the upper two being positive as they reflect an effect of the exit from poverty, and the lower two being negative as they reflect an effect of entering poverty). We have indicated support for the hypothesis in Table  4 by shading the estimates and standard errors for estimates that go in the predicted direction.

Following the first two columns down, we can see that there is mostly support for the hypothesis of a negative effect of poverty, but when controlling for other variables, the effects on social support are not impressive. In fact, if we concentrate on each social outcome (i.e., row-wise), one conclusion is that, when controlling for confounders, there are rather small effects of poverty on the probability of having access to social support. The opposite is true for political participation, where the consistency in the estimated effects of poverty is striking.

If we instead follow the columns, we ask whether any of the definitions of poverty is a better predictor of social outcomes than the others. The measure of economic deprivation appears to be the most stable one, followed by absolute poverty and the combined deprivation/absolute poverty variable. 14 The relative poverty measure is less able to predict social outcomes: in many instances it even has the non-expected sign. Interestingly, long-term poverty (as measured here) does not appear to have more severe negative consequences than absolute poverty in general.

Because some of our comparison groups are small, it is difficult to get high precision in the estimates, efficiency being a concern particularly in view of the set of control variables in Table  4 . Only 14 out of 62 estimates in models with controls are significant and in the right direction. Nonetheless, with 52 out of 62 estimates in these models having the expected sign, we believe that the hypothesis of a negative effect of poverty on social outcomes receives quite strong support.

Although control variables are not shown in the table, one thing should be noted about them: The reduction of coefficients when including control variables is almost exclusively driven by changes in civil status. 15 The time constant characteristics that are included are cross-sectionally related to both poverty and social outcomes, but they have only minor impacts on the estimated effects of poverty. This suggests that the conditioning on prior values of the dependent and independent variables eliminates much time invariant heterogeneity, which increases the credibility of estimates.

Conclusions

We set out to test a fundamental, but rarely questioned assumption in dominating definitions of poverty: whether shortage of economic resources has negative consequences for social relations and participation. By using longitudinal data from the Swedish Level-of-living Surveys 2000 and 2010, including repeated measures of poverty (according to several commonly used definitions) and four social outcome variables, we are able to come further than previous studies in estimating the relation between poverty and social outcomes: Our main conclusion is that there appears to be a causal relation between them.

Panel models suggest that falling into poverty increases the risk of weakening social relations and decreasing (civic and political) participation. Climbing out of poverty tends to have the opposite effects, a result that strengthens the interpretation of causality. The sample is too small to estimate the effect sizes with any precision, yet they appear to be substantial, with statistically significant estimates ranging between 5 and 21 % units.

While these findings are disquieting insofar as poverty goes, our results also suggest two more positive results. First, the negative effects of poverty appear to be reversible: once the private economy recovers, social outcomes improve. Secondly, the negative consequences are less for the closest social relations, whether there is someone there in cases of need (sickness, personal problems, etc.). This is in line with an interpretation of such close relations being unconditional: our nearest and dearest tend to hang on to us also in times of financial troubles, which may bolster risks for social isolation and psychological ill-being,

Our finding of negative effects of poverty on civic and political participation relates to the fears of a “downward spiral of social exclusion”, as there is a risk that the loss of less intimate social relations shrinks social networks and decreases the available social capital in terms of contacts that can be important for outcomes such as finding a job (e.g., Lin 2001 ; Granovetter 1974 ). However, Gallie et al. ( 2003 ) found no evidence for any strong impact of social isolation on unemployment, suggesting that the negative effects on social outcomes that we observe are unlikely to lead to self-reinforcement of poverty. Nevertheless, social relations are of course important outcomes in their own right, so if they are negatively affected by poverty it matters regardless of whether social relations in turn are important for other outcomes. Effects on political and civic participation are also relevant in themselves beyond individuals’ wellbeing, as they suggest a potentially democratic problem where poor have less of a voice and less influence on society than others.

Our results show the merits of our approach, to study the relation between poverty and social outcomes longitudinally. The fact that the poor have worse social relations and lower participation is partly because of selection. This may be because the socially isolated, or those with a weaker social network, more easily fall into poverty; or it can be because of a common denominator, such as poor health or social problems. But once we have stripped the analysis of such selection effects, we also find what is likely to be a causal relation between poverty and social relations. However, this effect of poverty on social outcomes, in turn, varies between different definitions of poverty. Here it appears that economic deprivation, primarily indicated by the ability of raising money with short notice, is the strongest predictor of social outcomes. Income poverty, whether in absolute or (particularly) relative terms, are weaker predictors of social outcomes, which is interesting as they are the two most common indicators of poverty in existing research.

Even if we are fortunate to have panel data at our disposal, there are limitations in our analyses that render our conclusions tentative. One is that we do not have a random allocation to the comparison groups at t 0 ; another that there is a 10-year span between the waves that we analyze, and both poverty and social outcomes may vary across this time-span. We have been able to address these problems by conditioning on the outcome at t 0 and by controlling for confounders, but in order to perform more rigorous tests future research would benefit from data with a more detailed temporal structure, and preferably with an experimental or at least quasi-experimental design.

Finally, our analyses concern Sweden, and given the position as an active welfare state with a low degree of inequality and low poverty rates, one can ask whether the results are valid also for other comparable countries. While both the level of poverty and the pattern of social relations differ between countries (for policy or cultural reasons), we believe that the mechanisms linking poverty and social outcomes are of a quite general kind, especially as the “costs for social participation” can be expected to be relative to the general wealth of a country—however, until comparative longitudinal data become available, this must remain a hypothesis for future research.

1 http://www.sofi.su.se/english/2.17851/research/three-research-departments/lnu-level-of-living .

2 We have tested various alternative codings and the overall pattern of results in terms of e.g., direction of effects and differences across poverty definitions are similar, but more difficult to present in an accessible way.

3 Our deprivation questions are however designed to reduce the impact of subjectivity by asking, e.g., about getting a specified sum within a specified time (see below).

4 In the equivalence scale, the first adult gets a weight of one, the second of 0.6, and each child gets a weight of 0.5.

5 We have also tried using single indicators (either a/b or i/ii) without detecting any meaningful difference between them. One would perhaps have assumed that poverty would be more consequential for having others over to one’s own place, but the absence of support for this can perhaps be understood in light of the strong social norm of reciprocity in social relations.

6 We have refrained from using information on voting and membership in trade unions and political parties, because these indicators do not capture the active, social nature of civic engagement to the same extent as participation in meetings and the holding of positions.

7 We have also estimated models with a more extensive health variable, a s ymptom index , which sums responses to 47 questions about self-reported health symptoms. However, this variable has virtually zero effects once global self-rated health is controlled, and does not lead to any substantive differences in other estimates. Adding the global health measure and the symptom index as TVC had no effect either.

8 Using the other indicators of poverty yields very similar results, although for some of those the difference between poor and non-poor is smaller.

9 We call these comparison groups ”never poor” and ”constantly poor” for expository purposes, although their poverty status pertains only to the years 2000 and 2010, i.e., without information on the years in between.

10 With this design we allow different effects of poverty on improvement versus deterioration of the social outcome. We have also estimated models with a lagged dependent variable, which constrains the effects of poverty changes to be of the same size for deterioration as for improvement of the social outcome. Conclusions from that analysis are roughly a weighted average of the estimates for deterioration and improvement that we report. As our analyses suggest that effects of poverty differ in size depending on the value of the lagged dependent variable (the social outcome) our current specification gives a more adequate representation of the process.

11 We have also tested models with a wider range of controls for, e.g., economic and social background (i.e. characteristics of the respondent’s parents), geography, detailed family type and a more detailed health variable, but none of these had any impact on the estimated poverty effects.

12 It is also possible that we register reverse causality, namely if worsening social outcomes that occur after t 0 lead to poverty at t 1 . This situation is almost inevitable when using panel data with no clear temporal ordering of events occurring between waves. However, reverse causality strikes us, in this case, as theoretically implausible.

13 We have also estimated models controlling for changes in health, which did not change the results.

14 If respondents’ judgments of the deprivation questions (access to cash margin and ability to pay rent, food, bills etc.) change due to non-economic factors that are related to changes in social relations, the better predictive capacity of the deprivation measure may be caused by a larger bias in this measure than in the (register-based) income measures.

15 As mentioned above, this variable may to some extent be endogenous (i.e., a mediator of the poverty effect rather than a confounder), in which case we get a downward bias of estimates.

Contributor Information

Carina Mood, Phone: +44-8-402 12 22, Email: [email protected] .

Jan O. Jonsson, Phone: +44 1865 278513, Email: [email protected] .

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Social Issues Thesis: Poverty and Homelessness

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