A Study On The Urban Poverty Measurement During China's Transition

Before 1990s, China's poverty took place mainly in rural regions. As a result, the anti-poverty policy and poverty research are mainly focused on the rural poverty. However,in the middle of 1990s, with the reform of state-owned corporation, social insurance system and the rural-to-urban migrants institution, the problem of urban poverty occurred. In other words, a lot of people now live in poor situation in cities. Based on this, this paper aims to construct a scientific ,universal and comparable method for poverty line calculation and poverty measurement, so as to get to know the real situation of urban poverty during the transition period of China. By measuring poverty, it is hoped that we could analyze the characteristics and source of urban poverty, and counter-poverty policies could be put forward in a scientific way.The poverty line to identify the poor is the basis for poverty analysis. The first section of this dissertation does research on the method of absolute poverty line, relative poverty line and subjective poverty line. We estimated the poverty line of various cities and make comparison with the minimum subsistence level. After analysis, we arrived at the following conclusions. (1) The Ravallion cost of basic needs method is preferred in calculating poverty line, for it is more precise in identifying poverty group and diminishing time and regional diversity. (2) Subjective poverty line method is suitable for urban poverty line calculation, Policy and research department should encourage the usage of this method, so as to reflect the welfare of poor people from a psychological angle. (3) The present minimum subsistence level is lower than the three methods suggested. Terefore, the government should raise the minimum subsistence level in order to satisfy the basic needs of poor people.The second section of this dissertation is the aggregate poverty measurement. Firstly, this paper reviews the theoretical development and achievements on aggregate poverty measurement in the past century and points out how to construct suitable poverty indices for China. Secondly, this dissertation measures the extension and intensity of urban poverty using micro and grouped data separately. And we find a rising trend for both extension and intensity of urban poverty. Lots of urban people who have labor ability now fall into poverty, which is different from traditional one. We also find that the main cause of urban poverty is due to series of policies reform during economic transition, such as income inequality, unemployment, housing expenditure, education expenditure, and medical expenditure. Those reforms have great effect on urban residents in many respects, such as living cost, income, competition and uncertainty. After analysis, we realize that, economic growth is the source of relieving poverty. However, economic growth itself could not alleviate poverty automatically, especially for structural poverty. Both growth rate and income distribution have great effect on poverty alleviation. It is also noticed that market economy needs the protection of various insurance mechanism. Income transfer and social insurance system could supplement the function of market distribution. Therefore, the next step is to enlarge the aid to poor people and set up various social security systems with wider range. During the process of anti-poverty, the government maximizes the effect of poverty eliminating under various restrictions, especially fund restriction. Thus, this dissertation discusses poverty measurement method and anti-poverty target under different restrictions. In case of policy, poverty index should be in favor of implementation, evaluation and justice of anti-poverty policy. As for developing countries, with scarce resources, different measurement methods mean different anti-poverty policies.The third section of this dissertation is multi-dimensional poverty measurement. Income, knowledge and health are the basic elements for human beings, which is meaningful to other dimensions of human being. Judging poverty from the dimension of income will miss other critical information for the poor, especially for fast developing China. Thus, multi-dimensional measurement is a necessary extension for single-dimension measurement. This dissertation firstly discusses the suitable multi-dimensional poverty index, and then it estimates the multi-dimensional poverty for urban in China. The result shows that, multi-dimensional poverty measurement is more helpful to policy makers in identifying the state and characteristics of poverty, which is the key to planning comprehensive and feasible anti-poverty policies. The possible policies include carrying out income support plan and education aid in poor regions.The aim of poverty measurement is to help identify, monitor and arouse people's attention for the issue of poverty, as well as providing scientific proof for anti-poverty campaign. The most severe period of urban poverty is during the economy transition from planning economy to market economy, as well as from agriculture economy to industrial economy. As a result, the research helps us to understand and provide aid to urban poor people, so as to construct a better and sustainable society. The research of a transition economy is also meaningful to enlarging the view of international poverty research.