Sensitivity Analysis
HLFS compared with Census
It is worth recalling at this point that the figures in Table 4 are based on a poverty threshold set at
60 percent and using the 2013 Census. We move next to HLFS households for the year 2013, where
unfortunately, we do not have any information on WfF and AS and therefore can only link households
with their respective EMS data. Using the HLFS data, we find an in-work poverty prevalence (excluding
WfF and AS) of 9.4 percent. The respective figure when using the 2013 Census for calculating in-work
poverty prevalence and excluding WfF and AS is 9.2 percent.
Alternative poverty thresholds
We replicated all figures in Table 4 using the 50 percent threshold – a common alternative poverty
threshold – and the respective numbers can be found in Appendix Table A 2. At this lower threshold,
the proportion of working households that are classified as poor decreases to 4.7 percent (and the
overall poverty rate drops to 12.4 percent).
To identify how the in-work poverty prevalence reacts to changes in the definition of the poverty
threshold, we calculated the in-work poverty rate for each percentage point in the range between
30 percent and 90 percent of the median net equivalised household income. The visualisation of
these results is shown in Figure 1 (both with and without the inclusion of WfF and AS). The
interrelation is not linear, indicating that the in-work poverty rate increases at a slower pace for lower
poverty thresholds and faster at a higher poverty threshold. For example, if the poverty threshold
moves from 40 to 41 percent, in-work poverty increases by 0.12 percentage points. However, when
moving from 80 to 81 percent, in-work poverty increases by 0.48 percentage points.
Figure 1. Interrelation of poverty threshold and in-work poverty rate
25%
In-work poverty rate
20%
15%
10%
5%
0%
30%
40%
50%
60%
70%
80%
Poverty threshold (percent of median equivalised income)
All income sources
Excluding WfF and AS
Source: IDI 2019. Notes: ‘WfF’ is Working for Families tax credit; ‘AS’ is Accommodation Supplement.
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