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Decomposing Youth Poverty in 22 Countries
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Japan to 94.5% for Germany. Interestingly, BTST income poverty
rates are very similar to net disposable income poverty rates in East
Asia. This shows that East Asian young adults and young parents
mainly rely on market income when social provisions are limited.
At the same time, the striking poverty differences between income
before and after taxes and social transfers for Scandinavian single
parents
show the effectiveness of social democratic welfare
programs in mitigating poverty of families headed by a single
parent, especially when that parent is a mother.
C. Decomposition
Table 4 summarizes the results of decomposition analyses.
The first column shows the poverty disparity between Taiwan and
each of the other selected countries. The next three columns show
the contribution of each factor to that difference. Using Denmark
as an example, the country’s youth poverty rate (based on net
disposable household income) is higher than Taiwan’s by 13.49
percentage points. The strongest effect driving this difference is the
higher BTST income poverty in Denmark, which contributes
+14.79 percentage points. There is also a large positive effect for
household composition differences of +8.07 and a countervailing
effect of better welfare program effectiveness in Denmark at -9.37.
The difference in youth poverty levels between Taiwan and
liberal countries ranges from 0.69 to 13.75 percentage points.
Although differences in household composition and higher welfare
effectiveness (e.g., in Ireland and the UK) are not inconsequential,
the largest contribution to this difference comes from having
higher BTST income poverty rates across household types in these
countries.
Actually, the BTST income poverty levels across household
types are lower in Taiwan than in other countries. The low
BTST income poverty keeps Taiwan’s youth poverty rate low
despite fragmented and limited social transfers for young adults and
their family members. Put another way, although the better social