Defining, measuring and analysing poverty and social exclusion with special reference to Malta

Abstract

The enhanced importance poverty reduction has gained in recent years, has made the development of meaningful and effective definitions, measures and analysis of poverty indispensable, both in the international and national fora. In reality, however, these have been hindered by the bewildering ambiguity surrounding how the term 'poverty' is used, how it is appropriately measured, and by the several indicators proposed to measure and monitor it. Specifically, the absence of an official definition and measurement of poverty within the national context has prevented the poverty line from being specifically defined and established. This has led many to utilise several different definitions and thresholds, with the consequence that the identification of the beneficiaries who need social support has been obscured rather than facilitated. Subsequent to Malta's membership in the European Union (EU), poverty in Malta has been mostly defined and measured according to EU statistical standards. In this regard, the poverty line utilised for the purpose of this dissertation will be a relative one defined at 60% of the median income of the Maltese population. By establishing an at-risk-of-poverty income threshold of Lm 2,032 annually, nearly 60,000 Maltese, specifically 14.9% of the Maltese population, are considered to be poor. This means that one in every seven Maltese individual is at-risk-of-poverty, with the highest incidence recorded for the unemployed, children, the elderly, and single parent households. The objective of this dissertation is to define, measure, and analyse poverty and social exclusion, placing particular emphasis on the national scene. By explicitly focussing on poverty first, it determines to what extent poverty is present in Malta and pinpoints the groups that are the most prone to poverty. Subsequently, by incorporating the social exclusion dimension, a more comprehensive analysis is endeavoured by moving towards the actual underlying Maltese individuals. At this juncture, the dissertation discusses the affiliation some vulnerable groups in Maltese society have with respect to poverty and social exclusion as well as the problems these groups have to face. It also brings together the income, expenditure, and saving elements of Maltese individuals in order to determine which households are living beyond their means. In addition, this dissertation scrutinises several issues which have implications on poverty and social exclusion in the Maltese context, including, the foreseen ageing of the population, the ever-increasing spending commitments, the mounting and unsustainable social welfare obligations, and the escalating problems in the housing market. Finally, it argues that poverty and social exclusion should be defined, measured and analysed only in relation to a particular society at a particular point in time and that poverty is ultimately relative!