Explaining the poverty difference between the US and the UK: a Shapley income-distribution decomposition approach

ABSTRACT

This paper estimates the poverty level in the US and the UK during the 2004–2016 period and analyses the cause of the poverty difference. The results show that poverty in the US is more serious than that in the UK. Although the overall income in the US is higher than that in the UK, the poor in the US, especially the ultra-poor, are poorer than those in the UK. The inequality in the US is higher than that in the UK, which offsets the contribution of the higher income and renders the higher poverty level in the US as the dominant factor.

KEYWORDS:

• Poverty
• income-decomposition
• poverty equivalent growth rate
• US
• UK

JEL CLASSIFICATION:

• D3
• I3

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Funding

This work was supported by the Chinese National Social Science Fund [16CGL043].