Teach me like 5: Approaches to Dealing with Poverty

This article simplifies the concepts and theories discussed in the advanced article 'Approaches to Dealing with Poverty' and explains the academic debates in an easy-to-understand way.

SOCIAL POLICYTEACH ME LIKE I'M FIVEPOVERTY

3/31/20243 min read

Helping People Who Don't Have Much Money

There are many ways we can help people who don't have a lot of money. Let's look at a few:

1) Sharing with Others (Redistributive Approaches)

One way is by sharing money from people who have a lot to people who don't have very much. This is called redistribution (Barr, 2012). It's like when we ask people who have a lot of cookies to share some with those who don't have any.

The government does this by taking more money from people who earn a lot and using it to help people who are poor (Joumard, Pisu & Bloch, 2012). This is known as progressive taxation.

This can be good, but sometimes it might make people not want to work hard to earn money if they think they will just have to give it away (Murray, 1984). This is referred to as the poverty trap.

2) Helping People Learn and Grow (Social Investment Approaches)

Another way to help is by investing in people, especially when they are young. This means making sure everyone can go to school and have the things they need to learn and grow (Morel, Palier, & Palme, 2012). This is called social investment.

When we help kids learn when they are little, like in early childhood education and care (ECEC), they usually do better when they grow up (Heckman, 2006). We can also help grown-ups learn new job skills so they can earn more money (Card, Kluve, & Weber, 2018). This is known as active labor market policies.

Helping people save money to buy a house or start a business is good too (Sherraden, 1991). This is referred to as the asset-based approach.

3) Letting People Choose (Capability Approaches)

A third way is by making sure people have the freedom and ability to make choices about their own lives. This is called the capability approach (Sen, 1999; Nussbaum, 2011). It's not just about giving people money, but making sure they can be healthy, go to school, have a nice place to live, and be part of their community.

Asking people what they need and letting them help make decisions is important (Narayan et al., 2000). This is known as consensual/participatory poverty.

Putting It All Together

In the end, helping people who are poor means doing a lot of different things. Sharing money (redistributive approaches), investing in people from when they are little (social investment approaches), and making sure everyone has the ability to make choices (capability approaches) are all important.

We need to understand what different people need and work together - the government, charities, businesses, and all of us - to build a world where everyone has what they need to live a good life.

References:

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Barr, N. (2012). Economics of the welfare state (5th ed.). Oxford University Press.
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Cantillon, B. (2011). The paradox of the social investment state: Growth, employment and poverty in the Lisbon era. Journal of European Social Policy, 21(5), 432-449.
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Giddens, A. (1998). The third way: The renewal of social democracy. Polity Press.
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Joumard, I., Pisu, M., & Bloch, D. (2012). Tackling income inequality: The role of taxes and transfers. OECD Journal: Economic Studies, 2012(1), 37-70.
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