Causes of poverty: age

Economic Development – Poverty

Objective

To understand how age influences the incidence and depth of poverty in both developing and developed economies.

Why Age Matters

Age is a demographic factor that determines an individual’s capacity to earn, access services and protect themselves from economic shocks. The main age‑related groups examined are:

• Children (0‑14 years)
• Working‑age adults (15‑64 years)
• Elderly (65 years and over)

Key Reasons Why Certain Age Groups Are More Prone to Poverty

1. Children

   • Dependence on household income – no direct earnings.
   • Higher expenditure needs (nutrition, education, health).
   • Vulnerability to malnutrition and limited access to quality schooling.

2. Working‑age Adults

   • Unemployment or underemployment reduces income.
   • Low‑skill jobs often pay wages below the poverty line.
   • Gender disparities: young women may face additional barriers.

3. Elderly

   • Retirement reduces or eliminates labour income.
   • Insufficient pension coverage or social security.
   • Higher health‑care costs and limited ability to work.

Poverty Measurement by Age Group

Below is a typical representation of poverty rates (%) by age group in a low‑income country.

Poverty Depth and Age – The Poverty Gap Index

The poverty gap index (PGI) measures the average shortfall of the poor from the poverty line, expressed as a proportion of the line:

\$PGI = \frac{1}{N}\sum{i=1}^{N}(z - yi)\$

where:

• \$N\$ = number of people below the poverty line
• \$z\$ = poverty line (in monetary units)
• \$y_i\$ = actual income of the \$i^{th}\$ poor individual

When disaggregated by age, the PGI often shows a larger gap for the elderly because their incomes are far below \$z\$, while children’s gap depends heavily on household earnings.

Policy Responses Targeted at Age‑Specific Poverty

1. For Children

   • Universal primary education and school feeding programmes.
   • Conditional cash transfers linked to school attendance.
   • Improved access to maternal and child health services.

2. For Working‑Age Adults

   • Skills development and vocational training.
   • Active labour‑market policies (job matching, subsidies).
   • Minimum‑wage legislation and enforcement.

3. For the Elderly

   • Non‑contributory pension schemes.
   • Subsidised health‑care and medication.
   • Community‑based support networks.

Summary

Age is a crucial determinant of poverty because it shapes earning potential, dependency ratios, and access to social protection. Understanding the distinct challenges faced by children, working‑age adults, and the elderly enables policymakers to design targeted interventions that reduce both the incidence and depth of poverty across the life‑cycle.