Persistent poverty

Description:

This indicator measures the proportion of people in Scotland in relative poverty after housing costs for three out of the last four years.

Source of Data:

Persistent poverty estimates are derived from the Understanding Society Survey.

Understanding Society is a large scale longitudinal survey that captures information about people's social and economic circumstances, attitudes, behaviours and health. Being longitudinal, the same individuals are interviewed each year allowing identification of those who have been in poverty over a number of years rather than just at a single point in time.

Surveys gather information from a sample rather than from the whole population. Results from sample surveys are always estimates, not precise figures. This means that they are subject to a margin of error which can affect how changes in the numbers should be interpreted, especially in the short-term.

More information on the Understanding Society Survey can be found on the Understanding Society website.

Definitions:

Persistent poverty identifies the number of individuals living in relative poverty for three or more of the last four years.

The income used to determine persistent poverty in this publication includes income from earnings, miscellaneous income, private benefit income, investment income, pension income and state support. Income is net of income tax payments, National Insurance contributions and council tax.

Income is adjusted for household size and composition by means of equivalence scales, which reflect the extent to which households of different size and composition require a different level of income to achieve the same standard of living. This adjusted income is referred to as equivalised income.

Income after housing costs is derived by deducting a measure of housing costs derived from mortgage and rents from the above income measure.

Equivalisation is the process by which household income is adjusted to make it comparable across households of different size and composition. This reflects the fact that a bigger household requires more money than a smaller one to achieve the same standard of living. Incomes are equivalised using the modified OECD equivalence scale. More information on this can be found on the Scottish Government website.

Criteria for Change:

  • Performance is improving if the indicator decreases for three periods in a row by at least 1 percentage point each period.
  • Performance is worsening if the indicator increases for three periods in a row by at least 1 percentage point each period.
  • Otherwise, performance is maintaining.

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