OECD scale
The OECD scale (named after its author, the Organization for Economic Co-operation and Development ) is a weighting factor for the international and regional comparability of income calculations.
use
To calculate the net equivalent income of a household , for example a family, the total of all income is not divided by the number of members, but by a weighted total of the members of the household community. The weighting was determined by the OECD. With the help of this equivalence scale , living standards are to be comparable regardless of household size and composition. The assessment basis is the total net income of all household members.
The equivalised net income is used, for example, to calculate the poverty line .
Weighting factors
The weights are intended to depict economies of scale within the household that arise from fixed costs and shared use of the living space. In this way, an apartment would be heated, regardless of whether it was a single person, a family or a shared apartment. Rents or taxes based on living space also remain the same. In addition, there is shared use of household appliances, vehicles and other things. Such amenities, which are independent of the number of household members or which benefit everyone, should be shared among the members, should make households of different sizes more comparable in terms of living standards. The weighting approach for other household members is to say that they have a standard of living comparable to a single person with less total income (consumption equivalent compared to a single-person household).
Old OECD scale
According to the old OECD scale (English OECD equivalence scale or Oxford scale ), the main income earner is weighted with a factor of 1.0, all other members of the household aged 15 and over with 0.7 and all others with 0.5, i.e. with 70% and 50%.
This scale was first used in 1982.
New OECD scale
According to the new or modified OECD scale (OECD-modified scale) , the main income earner is weighted with a factor of 1.0, all other members of the household aged 14 and over with 0.5 and all others with 0.3 (50% and 30%).
This modification was introduced by Haagenars (et al.) In 1994, and has also been used by Eurostat since the late 1990s .
OECD square root scale
Another modification used in more recent work by the OECD (2008, 2011) is a more general weighting by dividing income by the (rounded) square root of household size.
example
In a family of five, the two adult partners together earn 5000 euros, two children are 6 or 8 years old, another 15. According to the new OECD scale, the sum of the weighting factors of the household members is 2.6 and according to the old OECD scale 3 , 4. The equivalent income according to the new scale is 5000 EUR / 2.6 = 1923 EUR, according to the old method 5000 EUR / 3.4 = 1471 EUR, and according to the latest method 5000 EUR / 2.2 = 2273 EUR.
Comparison of the methods
| Household size | Equivalence scale | ||||
|---|---|---|---|---|---|
| Per capita income (s) | Old OECD scale | New OECD scale | Square root scale | Household income (s) | |
| 1 adult | 1.0 | 1.0 | 1.0 | 1.0 | 1.0 |
| 2 adults | 2.0 | 1.7 | 1.5 | 1.4 | 1.0 |
| 2 adults, 1 child | 3.0 | 2.2 | 1.8 | 1.7 | 1.0 |
| 2 adults, 2 children | 4.0 | 2.7 | 2.1 | 2.0 | 1.0 |
| 2 adults, 3 children | 5.0 | 3.2 | 2.4 | 2.2 | 1.0 |
| Elasticity (e) | 1 | 0.73 | 0.53 | 0.50 | 0 |
- Source: OECD
- Here, adults refer to people over the age of 14.
criticism
Changes in the OECD scale always lead to changes in the level of poverty and the extent to which individual groups are affected. It is particularly controversial whether the low weighting of children (factor 0.3) is realistic. It is assumed that families with children not only benefit from the savings effects of multi-person households (as do couples versus singles), but are also 40 percent cheaper than a comparable adult. According to the old OECD scale, not only were the savings effects of multi-person households calculated to be lower, but also those of children compared to comparable adults (71.4 percent instead of 60 percent).
The assumptions of the OECD about the lower costs for children also deviate from the welfare state practice, where every additional child increases the calculated needs as much as an additional adult, and even higher for the first child.
The latest modification reacts to these points of criticism, which allows the first child to enter higher levels, but flattens out more in large families because today the satisfaction of individual basic needs (such as food) only takes up a comparatively small proportion in the household budget, and in large families multiple uses of common items (such as Clothing, toys, educational materials) is much more pronounced.
Web links
- Inequality . oecd.org
Individual evidence
- ↑ a b c d e f What Are Equivalence Scales . (PDF) OECD Project on Income Distribution and Poverty; accessed February 11, 2015.
- ↑ a b Living conditions in Germany - the third report on poverty and wealth by the federal government . (PDF) 2008, p. 17; accessed on January 28, 2015.
- ^ OECD: The OECD List of Social Indicators. Paris 1982.
- ↑ A. Hagenaars, K. de Vos, MA Zaidi: Poverty Statistics in the Late 1980s: Research Based on Micro Data. Office for Official Publications of the European Communities. Luxembourg 1994.
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↑ OECD: Growing Unequal? Income Distribution and Poverty in OECD Countries. Paris 2008;
OECD: Divided We Stand - Why Inequality Keeps Rising. Paris 2011. - ^ Tilman Weigel: Attention, statistics! Saarbrücken, August 2013, ISBN 978-3-8417-7125-4 .