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Decomposing Youth Poverty in 22 Countries


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


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


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