Research Topics

Why Time Deficits Matter

We describe the production of estimates of the Levy Institute Measure of Time and Income Poverty (LIMTIP) for Buenos Aires, Argentina, and use it to analyze the incidence of time and income poverty. We find high numbers of hidden poor—those who are not poor according to the official measure but are found to be poor when using our time-adjusted poverty line. Large time deficits for those living just above the official poverty line are the reason for this hidden poverty. Time deficits are unevenly distributed by employment status, family type, and especially gender. Simulations of the impact of full-time employment on those households with nonworking (for pay) adults indicate that reductions in income poverty can be achieved, but at the cost of increased time poverty. Policy interventions that address the lack of both income and time are discussed.

The Levy Institute Measure of Time and Income Poverty

This report presents findings from a joint project of the Levy Economics Institute and the Korea Employment Information Service, with the central objective of developing a measure of time and income poverty for Korea that takes into account household production (unpaid work) requirements. Standard measurements of poverty assume that all households have enough time to adequately attend to the needs of household members—including, for example, caring for children. But this assumption is false. For numerous reasons, some households may not have sufficient time, and they thus experience “time deficits.” If a household officially classified as nonpoor has such a time deficit and cannot afford to cover it by buying market substitutes (e.g., hiring a care provider), that household will encounter hardships not reflected in the official poverty measure.To get a more accurate calculus of poverty, we developed the Levy Institute Measure of Time and Income Poverty (LIMTIP), a two-dimensional measure that takes into account both the necessary income and the household production time needed to achieve a minimum living standard. In the case of Korea, our estimates for 2008 (the last year for which data are available) show that the LIMTIP poverty rate of employed households was almost three times higher than the official poverty rate (7.5 percent versus 2.6 percent). The gap between the official and LIMTIP poverty rates was notably higher for “nonemployed male head with employed spouse,” “single female-headed” and “dual-earner” households. Our estimates of the size of the hidden poor—roughly two million individuals—suggest that ignoring time deficits in household production resulted in a serious undercount of the working poor, which has profound consequences for the formulation of policy. In addition, the stark gender disparity in the incidence of time poverty among the employed, even after controlling for hours of employment, suggests that the source of the gender difference in time poverty lies in the greater share of the household production activities that women undertake. Overall, current policies to promote gender equality and economic well-being in Korea need to be reconsidered, based on a deeper understanding of the linkages between the functioning of labor markets, unpaid household production activities, and existing arrangements of social provisioning—including social care provisioning.

Assessing the Korean Experience Using the Levy Institute Measure of Time and Income Poverty

In partnership with the Korea Employment Information Service, Senior Scholar Ajit Zacharias and Research Scholars Thomas Masterson and Kijong Kim investigate the complex issues of gender, changing labor market conditions, and the public provisioning of child care in Korea using the Levy Institute Measure of Time and Income Poverty (LIMTIP), an alternative measure that factors in both time and income deficits in the assessment of poverty.Since the 1997 Asian financial crisis, lifetime employment and single-breadwinner households have given way to increased job insecurity, flexible work arrangements, and rapid growth in dual-earner households in Korea. Add to these factors rising labor force participation by women but little change in the highly unequal division of household production, and many women effectively face a double shift each day: paid employment followed by a second shift of household production.Recognizing the implications of the heavy burden of care work for women’s well-being and employment, Korea introduced public child-care provisioning, via a voucher system for low-income families, in 1992 (the program became universal in 2013). This study analyzes the impact of the voucher program on reducing time and income poverty, and reassesses the overall level of poverty in Korea. While it reveals a much higher level of poverty than official estimates indicate—7.9 percent versus 2.6 percent—due to time deficits, the outsourcing of child-care services reduced the LIMTIP rate from 7.9 percent to 7.5 percent and the number of “hidden poor” individuals from two million to 1.8 million. While these results show that the problem of time poverty in Korea extends beyond child-care needs, the impact of public provisioning through the voucher program clearly has had a positive impact on families with children.The main findings and policy recommendations resulting from this study are presented in detail in the research project report The Measurement of Time and Income Poverty in Korea: The Levy Institute Measure of Time and Income Poverty. 

Gauging the severity of poverty in a given country requires a reasonably comprehensive measurement of whether individuals and households are surpassing some basic threshold of material well-being. This would seem to be an obvious point, and yet, in most cases, our official poverty metrics fail that test, often due to a crucial omission. In this policy brief, Senior Scholar Ajit Zacharias, Research Scholar Thomas Masterson, and Research Associate Emel Memiş  present an alternative measure of poverty for Turkey and lay out the policy lessons that follow. Their research reveals that the number of people living in poverty and the severity of their deprivation have been significantly underestimated. This report is part of an ongoing Levy Institute project on time poverty (the Levy Institute Measure of Time and Income Poverty), which has produced research on Latin America, Korea, and now Turkey, with the aim of extending this approach to other countries.

The Levy Institute Measure of Time and Consumption Poverty for Turkey

Official poverty lines in Turkey and other countries often ignore the fact that unpaid household production activities that contribute to the fulfillment of material needs and wants are essential for the household to reproduce itself as a unit. This omission has consequences. Taking household production for granted when measuring poverty yields an unacceptably incomplete picture, and therefore estimates based on such an omission provide inadequate guidance to policymakers.

Standard measurements of poverty assume that all households and individuals have enough time to adequately attend to the needs of household members—including, for example, children. These tasks are absolutely necessary for attaining a minimum standard of living. But this assumption is false. For numerous reasons, some households may not have sufficient time, and they thus experience what are referred to as “time deficits.” If a household officially classified as nonpoor has a time deficit and cannot afford to cover it by buying market substitutes (e.g., hire a care provider), that household will encounter hardships not reflected in the official poverty measure. To get a more accurate calculus of poverty, we have developed the Levy Institute Measure of Time and Consumption Poverty (LIMTCP), a two-dimensional measure that takes into account both the necessary consumption expenditures and household production time needed to achieve a minimum living standard.

The Levy Institute Measure of Time and Consumption Poverty (LIMTCP) is a two-dimensional measure that takes into account both the necessary consumption expenditures and the household production time needed to achieve a minimum standard of living—factors often ignored in official poverty measures. In the case of Turkey, application of the LIMTCP reveals an additional 7.6 million people living in poverty, resulting in a poverty rate that is a full 10 percentage points higher than the official rate of 30 percent. 

Official poverty lines in Korea and other countries ignore the fact that unpaid household production contributes to the fulfillment of material needs and wants that are essential to attaining a minimum standard of living. By taking household work for granted, these official estimates provide an inaccurate accounting of the breadth and depth of poverty—and can lead policymakers astray.

Why Time Deficits Matter for Poverty

We cannot adequately assess how much or how little progress we have made in addressing the condition of the most vulnerable in our societies, or provide accurate guidance to policymakers intent on improving each individual’s and household’s ability to reach a basic standard of living, if we do not have a reliable means of measuring who is being left behind. With the support of the United Nations Development Programme and the International Labour Organization, Senior Scholars Rania Antonopoulos and Ajit Zacharias and Research Scholar Thomas Masterson have constructed an alternative measure of poverty that, when applied to the cases of Argentina, Chile, and Mexico, reveals significant blind spots in the official numbers.