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UR
A
MERICA
income poverty is reduced through social transfers and taxes
(Brandolini & Smeeding, 2008; Heuveline & Weinshenker, 2008).
The lower the ratio, the more the poverty rate is reduced, and the
more effective the welfare programs.
The
household composition
of young adults is divided into
nine types: single man with children (<18 years old), single man
without children, single woman with children, single woman without
children, coupled (i.e., married or cohabiting) young adults with
children, coupled young adults without children, young adults with
coupled parents, young adults with single parents, and others (e.g.
living with grandparents, other relatives, or non-family members).
C. Analytic Methods
Decomposition is used to examine the effects of household
composition, BTST income poverty, and welfare effectiveness. As
Taiwan shows some unique patterns (e.g. the highest incidence of
intergenerational coresidence and relatively low GDP) (Tai, 2012),
it is the base country. Accordingly, the decomposition results
estimate the contributions of these three structural factors to the
differences between Taiwan’s poverty rates and those of other
countries. For decomposition analysis, I assume that no other
income sources or relevant behaviors change in response to the
changes in social transfers and earnings, including no changes in
household composition, pay, taxes, or other income items. These
assumptions are standard in decomposition analysis (Das Gupta,
1993).
To test the effects of household composition, welfare, and
BTST income poverty on youth poverty, this study follows Das
Gupta (1993) and Heuveline and Weinshenker (2008). First, the
poverty rate (based on net disposable income) for young adults is:
P =
Σ
(
H
i
*
P
i
)
(1)
where
P
is the overall poverty rate for young adults in Taiwan,
H
i