Multidimensional Poverty and Inequality of Opportunity in ...

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Multidimensional Poverty and Inequality of Opportunity in Peru: Taking Advantage of the Longitudinal Dimension of Young Lives

Escobal, Javier

Grupo de An?lisis para el Desarrollo (GRADE), Young Lives

June 2012

Online at MPRA Paper No. 56461, posted 12 Jun 2014 18:02 UTC

Multidimensional Poverty and Inequality of Opportunity in Peru: Taking Advantage of the Longitudinal Dimension of Young Lives

Javier Escobal

Abstract Mult idim ensional poverty and inequalit y of opportunit y are closely int erconnect ed concept s. Equalit y of opport unit y levels t he playing field so that circum stances such as gender, ethnicit y, geographical locat ion or fam ily background, which are beyond the control of a child, do not influence his or her life chances. This m eans t hat if equalit y of opport unit y is achieved, a child will be able to overcom e m ult idim ensional poverty and deprivat ion. Using t he inform at ion collect ed in Peru during t he fir st t wo rounds of t he Young Lives longit udinal st udy, we describe how m ult idim ensional poverty and inequality of opportunity evolve as children get older. Result s show t hat alt hough scalar indices of m ult idim ensional poverty, deprivat ions or inequalit y of opportunit y m ay be quite useful as an advocacy tool, they m ay m ask im portant heterogeneities.

Acknowledgements The paper benefit ed from t he ext ensive assist ance of Eva Flores. I would also like t o t hank Mar ia Ana Lugo and Laura Cam field for valuable com m ents.

The Author Javier Escobal is Senior Researcher at GRADE, in Lim a, Peru, and Pr incipal I nvest igat or for Young Lives in Peru.

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[Contents]

List of tables

Table 1. Select ed child well- being and povert y out com es m easur ed in Young Lives sur vey ( Rounds 1 and 2)

Table 2. Select ed child and household circum st ances included in Young Lives survey Table 3. Changes in select ed Young Lives w ell- being and povert y indicat ors bet w een

Rounds 1 and 2: Younger Cohort Table 4. Changes in select ed Young Lives w ell- being and povert y indicat ors bet w een

Rounds 1 and 2: Older Cohort Table 5. Peru 2000?9: evolut ion of k ey child well- being and povert y indicat ors ( % ) Table 6. Relat ive im port ance of differ ent dim ensions of child well - being

as children grow up Table 7. Different definit ions of m ult idim ensional povert y: Younger Cohort ( % ) Table 8. Differ ent definit ions of m ult idim ensional povert y: Older Cohort ( % ) Table 9. Mult idim ensional povert y in key sub- groups ( second gr ouping) : Younger Cohort

( % ) ( by different definitions) Table 10. Decom posit ion of t he Mult idim ensional Povert y I ndex: Younger Cohort ( % )

( by household, m ot her and child charact erist ics) Table 11. Decom posit ion of t he Mult idim ensional Povert y I ndex: Younger Cohort ( % )

( by region and rem ot eness charact erist ics) Table 12. Relat ive im port ance of each povert y dim ension: Younger Cohort ( % ) Table 13. Decom posit ion of t he Mult idim ensional Povert y I ndex: Older Cohort ( % ) ( by household, m ot her and child charact erist ics) Table 14. Relat ive im port ance of each povert y dim ension: Older Cohort ( % ) Table 15. Decom posit ion of t he Mult idim ensional Povert y I ndex: Younger Cohort ( % )

( by group charact erist ics ? first grouping, worst and best circum st ances) Table 16. Decom posit ion of t he Mult idim ensional Povert y I ndex: Younger Cohort ( % )

( by group charact erist ics ? second grouping, worst and best circum st ances) Table 17. Decom posit ion of deprivat ion dim ensions: Younger Cohort

( for key sub- groups, second grouping) Table 18. Decom posit ion of deprivat ion dim ensions: Older Cohort

( for key sub- groups, second grouping) Table 19. Hum an Oppor t unit y I ndex for select ed out com es: Younger Cohort , Round 1 ( % )

( considering basic circum stances) I / Table 20. Hum an Oppor t unit y I ndex for select ed out com es: Younger Cohort , Round 1 ( % )

( considering extended circum stances) I I /

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Table 21. Hum an Oppor t unit y I ndex for select ed out com es: Younger Cohort , Round 2 ( % ) ( considering extended circum stances) I I I /

Table 22. Decom posit ion of Hum an Opport unit y I ndex changes for select ed out com es: Younger Cohort ( considering ext ended circum st ances)

Table 23. Hum an Oppor t unit y I ndex for select ed out com es: Older Cohort , Round 1 ( % ) ( considering extended circum stances) I I /

Table 24. Decom posit ion of Hum an Opport unit y I ndex changes for select ed out com es: Older Cohort , Round 2 ( % ) ( considering extended circum stances) I I I /

Table 25. Decom posit ion of Hum an Opport unit y I ndex for select ed out com es: Older Cohort ( % ) ( considering ext ended circum st ances)

Table 26. Changes in Hum an Opport unit y I ndex along qualit y dim ensions: Younger Cohort (%)

Tables in Statistical appendix Table A1. Mult idim ensional well- being in key sub- groups ( first grouping, showing

indicat ors) : Younger Cohort ( % ) Table A2. Mult idim ensional well- being in key sub- groups ( second grouping, showing

indicat ors) : Younger Cohort ( % ) Table A3. Mult idim ensional povert y in key sub- groups ( first grouping, by different

definit ions) : Younger Cohort ( % ) Table A4. Mult idim ensional povert y in key sub- groups ( second grouping, by different

definit ions) : Younger Cohort ( % ) Table A5: Hum an Oppor t unit y I ndex for select ed out com es, Younger Cohort , Round 2 ( % )

( considering basic circum stances) I / Table A6. Hum an Opport unit y I ndex for select ed out com es, Older Cohort , Round 1 ( % )

( considering basic circum stances) I / Table A7. Hum an Opport unit y I ndex for select ed out com es: Older Cohort , Round 2 ( % )

( considering basic circum stances) I /

List of figures Figure 1. Mult idim ensional well- being in key sub- groups ( first grouping) , worst and best

circum st ances: Younger Cohort , Round 1 Figure 2. Mult idim ensional well- being in key sub- groups ( first grouping) , worst and best

circum st ances: Younger Cohort , Round 2

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1. Introduction

Equalit y of opport unit y has increasingly capt ured t he at t ent ion of policym akers. Recent ly, int ernat ional organisat ions like t he World Bank and UNDP have included specific indicat ors t o t race inequalit y in access to key public goods and services ( see Paes de Barros et al. 2009 and UNDP 2007) . Unlike equalit y of out com e, in which one seeks t o reduce or elim inat e differences in m aterial condit ion between individuals or households in a society, equality of opportunity aim s to level the playing field so that circum stances such as gender, ethnicity, birthplace, m aternal education or any other aspect of fam ily background, which are beyond the control of an individual, do not influence a person's life chances.

The lit erat ure recognises t hat inequalit y m ay include m any dim ensions. Som e authors tend to focus on inequality in term s of outcom es like incom e, consum ption, access to education and access to work, and m easure it accordingly. Ot hers, such as Sen ( 1985) , have advocat ed t he need t o look at act ivities and states that make up people's well- being, t aking int o account a wider range of outcom es, including elem entary ones, such as being in good healt h and properly nourished and sheltered, and social outcom es such as having self- respect or taking part in the life of the com m unit y. Yet ot hers, such as Roem er ( 1998) , have em phasised t he fact that inequalit y of opportunity should be m easured in such a way that it is independent of an individual's circum st ances, and is a funct ion only of t heir effor t .

I n an ideal world, children's chances of success in life would depend on t heir effort, talent and choices and not on their circum stances at birth or other circum stances beyond their control. While outcom es can usually be m easured with a considerable degree of precision, opportunities cannot. However, when we look at children ? especially at an early age ? it is m ore likely that it is circum stances and not effort that are determ ining their wellbeing. Som et hing different m ay happen as t he children grow up t o becom e young people and adults. I n those cases we m ight expect that effort would

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play an increasing role as a det erm inant of t heir well- being. Therefore, t he best group to use to evaluate how these init ial circum stances affect opportunit ies in life is young children, given that at very early ages the effort com ponent is very sm all.1

Several indicators have been const ruct ed t o t ry t o m easure inequalit y of opport unit y. Follow ing t he work of Roem er ( 1998) , which dist inguishes bet ween `circum st ances' and `effort ', aut hors like Lefranc et al. ( 2006) have developed stat ist ical tests to com pare the distribut ion of opportunit ies bet ween individuals wit h sim ilar circum st ances. Ruiz- Cast illo ( 2003) and Bourguignon et al. ( 2003) followed a com plem entary approach and constructed a scalar index of inequality of opportunit y, based on dividing t he populat ion according t o such cat egories of circum st ances as parents' educat ion, occupat ion and race. This index has been adapt ed and used in several World Bank publicat ions including Paes de Barros et al. ( 2009) ,who used it t o evaluat e inequalit y of oppor t unit y am ong children in Lat in Am erica.

A closely related concept of inequalit y of opportunit y is that of experiencing deprivat ions. Gordon et al. ( 2003) int roduced t he concept of deprivat ions, highlight ing the m ult idim ensional nature of poverty in general and child povert y in part icular. These aut hors const ruct ed a povert y headcount based on count ing children wit h t wo or m ore severe deprivat ions. The gauge included seven indicators: appropriate shelter; sanitat ion facilit ies; safe drinking water; adequate nutrit ion as reflected by not being stunted, wasted or undernourished; school attendance; adequate im m unisat ion coverage; and access to inform at ion sources like radio, television, telephone, newspaper or com put er. I n 2007, UNI CEF fully acknow ledged t he m ult idim ensional nat ure of child povert y. The January 2007 UN General Assem bly stated, in its annual resolut ion on the rights of the child, that `Children living in povert y are deprived of nut rit ion, wat er and sanit at ion facilit ies, access to basic healthcare services, shelter, education, part icipat ion and protection, and that while a severe lack of goods and

1 One m ay wonder, how ever, if equalit y of opport unit y for children can be achieved without greater equality of outcom e for parents.

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services hurts every hum an being, it is m ost threatening and harm ful to children, leaving them unable to enj oy their rights, to reach their full pot ent ial and t o part icipat e as full m em bers of t he societ y' ( UNI CEF 2007: 11).

I n Peru, inequalit y in general, and inequalit y of opport unit y in part icular, has increasingly capt ured the attent ion of researchers and policym akers.2 Although there is som e evidence that incom e inequality has been decreasing in recent years ( Jaram illo and Saavedra 2009; Lopez- Calva and Lust ig 2009) t his reduct ion is sm all when com pared t o t he high level of incom e inequalit y pr evailing in Peru, and it m asks im port ant inequalit y trends along other relevant dim ensions such as location ( urban/ rural/ rem ot e) , et hnicit y and life st age. For exam ple, alt hough incom e inequalit y, as m easured by t he Gini coefficient , m ay show a very sm all decline, the gap in incom e or in other well- being dim ensions between urban/ rural areas is increasing. Figueroa and Barr?n ( 2005) and Barr?n ( 2008) suggest that inequalit y along the ethnic divide m ay be increasing. Escobal and Ponce ( 2010) show t hat while incom e inequalit y, m easured by a Gini coefficient , dim inished bet ween 1993 and 2007, dur ing t he sam e period geographic polarisat ion of well- being increased. Sim ilarly, Mu?oz et al. ( 2007) show that inequalit ies between groups continue to be very high. I n relat ion t o child well- being, dat a available from I NEI , t he Peruvian national stat ist ics agency ( 2010) , show that although the gap between the top 20 per cent and bottom 20 per cent of the incom e distribut ion has been reduced in the last decade in im portant poverty ( or lack of well- being) indicators such as chronic m alnutrit ion or low weight at birth, it continues to be large and is increasing in other relevant dim ensions such as prevalence of acut e respirat ory infect ions, or access to key services like full im m unisation.

We believe that inequality of opportunity should not be analysed taking each opportunit y or outcom e in isolat ion from ot her relevant outcom es. I nst ead we need t o recognise t hat children who share a cert ain set of

2 Equalit y of opport unit y was t he cent ral cam paign slogan of one of t he candidat es running in the 2011 presidential election.

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circum stances m ay be sim ultaneously deprived in several well- being dim ensions, and inequality in accessing one part icular opportunit y m ay be correlated with inequality in accessing several other opportunit ies. I n addit ion, an indicator of m ult iple deprivat ions should allow us to focus on the deprivat ions of groups in specific circum stances, in order to target them with relevant policies.

I n this paper we explore different dim ensions and com plexit ies of deprivat ions and inequalit y ( or equalit y) of opport unit y for children in Peru, using t he Young Lives sam ple. Young Lives is an int ernat ional st udy carr ied out in four count r ies ( Et hiopia, Viet nam , I ndia and Peru) , whose obj ect ive is to im prove our understanding of the causes and consequences of childhood poverty and to exam ine how circum stances and governm ent policies affect children's well- being over t im e. Young Lives has been t racking 2,000 Peruvian children from a Younger Cohort , who were aged bet ween 6 m ont hs and 18 m ont hs in 2002, when t he st udy began. The st udy also t racks an Older Cohort of about 700 children who were aged bet ween 7.5 and 8.5 years old in 2002. The second round of dat a gat hering was carried out between late 2006 and early 2007, and the third round between August 2009 and January 2010.

The benefit s of looking at inequalit y of opport unit y using t he lens provided by t he Young Lives dat a are t wo- fold. First , in com par ison wit h t radit ional surveys like t he Living St andard Measurem ent Surveys or t he Dem ographic and Healt h Surveys, Young Lives covers a w ide range of well- being indicators for the sam pled children, including physical health, nutrit ion, education and m aterial wealth of their parents, as well as m aternal psychosocial well- being ( self- esteem and sense of efficacy, sense of discrim inat ion, et c.) . This range of well- being indicat ors is seldom covered in nat ional representative sam ples, which typically need to narrow their focus t owards people's abilit y t o access t o basic services. By looking at a broad range of indicators, we can ident ify whether inequality of opportunity is affect ing the various dim ensions of child well- being different ly. A second benefit of using Young Lives dat a is t hat of t aking advant age of t he longitudinal nature of the sam pling fram ework. Although the original

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