Poverty of Young People: Context and Household Effects in North-Western Italy

In countries characterized by large territorial differences in living standards, indicators of relative poverty measured at the national level might hide significant heterogeneities in the experience of individual households. We propose a relative indicator of poverty to be computed at the local level and to be added to the standard national poverty indicators. In fact, the greater the distance between local and national relative poverty, the more heterogeneous are contexts within the same country, hence requiring heterogeneous and specific policies at the local level to be added to nationwide ones. To show the usefulness of this additional indicator, we offer an application to young households in three provinces of North-Western Italy, the richest area in the country. Thanks to the additional indicator, we show that the poverty of households with children, mostly living in metropolitan areas or small towns, emerges only when observing a "local relative" measure of poverty. We conclude by discussing the gains of our proposed indicator for local policy interventions, to be added to nationwide policies.