The Differences of the Minimum Living Costs between Adults and Children
Poverty is usually determined on the basis of household as the unit not by individual. For this reason, the different needs of the household members tend to affect the poverty threshold which further influences the composition of the poverty population. The official poverty threshold in Taiwan makes no distinction between the needs of an adult and a child, nor the differences between them in economies of scale of household consumptions. This method tends to shortchange single elderly households in its calculation of the distribution of poverty population composition. There exists a theoretical bias in treating the needs of adults as the same from children. In this research, we employ three different cost methods, those of Engel, Rothbarth, and Iso-Prop, in an attempt to resolve the problems in determining the minimum cost of living differences between adults and children and also to calculate the ratio of children cost to those of adults. A clear understanding of the differences of the minimum living costs between adults and children will not only make it easier to determine the low income population but will also be useful for government to set up the level and amount of welfare expenditure for children. For example, it can be used to estimate the living supply, child care, schooling allowance, etc., for the children in low income families. These calculating methods are also helpful to the government on the estimation of the welfare expenditure for children. The results of our analyses show that the parameters calculated by the Engel method tend to overestimate while those by the Rothbarth method tend to underestimate the values with the Iso-prop method falling somewhere in between the two. Finally, we found that using the Iso-prop method to calculate expenditure with the FCSU figures, the percentage of the cost of children in the household with one parent was 0.71, while with both parents present the same figure was 0.68.