Poverty and equal opportunities

On 17 October every year, the world marks the International Day for the Eradication of Poverty. Is there anything to celebrate?

16 October 2020

On 17 October every year, the world marks the International Day for the Eradication of Poverty. Is there anything to celebrate? Definitely so: over the previous 30 years, the number of people in extreme poverty (living on under $1.90 PPP1 per day) has significantly decreased, from 36 per cent in 1990 to 9 per cent in 2017. First of all, these results have been achieved as a result of rapid economic in growth China and some other developing countries. However, even extreme poverty has not been eradicated, and moreover there are places on the planet where a significant number of people remain poor from generation to generation.

What is the situation in Ukraine?

The International Extreme Poverty Line of $1.90 (PPP) per day does not provide any insight into the extent of poverty in Ukraine, as fewer than 0.1 per cent of Ukrainians fell below that limit (according to 2017 data). Ukraine primarily uses the national poverty line - the actual subsistence level, which was UAH 3,660.9 per month in 2019.

Over the last 20 years, Ukraine has witnessed drastic fluctuations in poverty. Absolute poverty reached two peak values: in 2001 and in 2015. Between 2015 and 2019 there was a steady decline in poverty, by more than 15 percentage points. In 2020, however, primarily in connection with the COVID-19 pandemic, according to the latest UNICEF forecasts Ukraine’s achievements in the decrease of poverty since the 2015 crisis may be negated.


Child poverty

Like children at global level, children In Ukraine suffer disproportionately more from poverty than adults. Poverty rates in families with children are higher than in families without children, by any monetary criteria.

Why is this happening? Children do not gain any income, therefore, any income sources of a household (family members living together) gets divided by the number of persons in that household. Also, children are often born when parents are at the beginning of their careers, when their incomes are not high.

The poorest families with children are families with many children, families with children under the age of three, and families where the child is raised by one parent (most often the mother).

Childbirth benefits are an effective tool to reduce child poverty among the target cohort. First, the payment of this benefit has decreased the poverty rate among its beneficiaries from 66.4 per cent to 59.9 per cent. That is, the number of poor people in families with children under the age of 3 is now 400,000 people smaller, due to that payment. The high level of poverty among families with children under 3 guarantees that the programme will reach the under-privileged people even if they do not comply with the income verification requirement. Ukraine’s society perceives the programme as being fair from the social point of view.

Although childbirth benefit is an effective tool to reduce poverty among the target cohort, the benefit sizes today are low, and do not meet the needs of an unemployed mother with a child. The monthly payment has not been revised since 2014, and today it is almost half the size of the officially approved subsistence level.


Equal opportunities

Inequality among children is a specific problem because children are a special category of the population: they are born into families of different wealth and social status, with no choice in the matter. That is, from their very birth, inequality is determined by the family circumstances. As they grow older, the milieu affects the child's developmental opportunities and education; determines access to material goods and services, and also significantly affects the child’s quality of life, moulding the individual’s competitiveness as an adult.

Babies born with the same physical and intellectual capabilities, but in families with different statuses, have different starting positions. That is, they have different life chances and prospects for the future. Inequality limits opportunities for the child development.

However, limited life opportunities caused by the lack of funds are not the only manifestation of the problem of inequality among children. Significant factors are (i) origin – the social status of their parents, their education, employment, (ii) the area where the family lives, and (iii) biological factors, such as having a disability. Some children do not have access to available services because of their families’ lower incomes, and/or because of who or their parents are, and where they live.


Reducing child poverty

The inability to protect children from poverty and thus to ensure equal opportunities for their development are among the costliest mistakes that a society can make. Undoubtedly, the heaviest burden is borne by the children themselves. For society, however, the price is extremely high, too — it includes lower skills and productivity, shorter life expectancy and lower academic achievements, higher risks of unemployment and social dependence, higher social protection expenditure, as well as loss of social cohesion.

Specific solutions exist to tackle child poverty that have proven to be effective. The steps identified by the Global Coalition to End Child Poverty in 2017 are a framework based on international best practices.

The success of those measures is guaranteed by the effective work of the government in cooperation with international partners, the private sector and civil society organizations. It is also possible to overcome poverty with the active engagement of families and children themselves.

Now is a unique moment. First, the crisis of 2020 has necessitated decisive measures at both the national and local levels to reduce the expected drastic rise in poverty. Second, this year marks the completion of the 2016-2020 National Poverty Reduction Strategy, which opens opportunities for action that will significantly reduce poverty in Ukraine, especially for families with children.


[1] Purchasing Power Parity