Income poverty rates measure the share of people at the bottom end of the income distribution. Society’s equity concerns are typically greater for the relatively disadvantaged. As a result, poverty measures often receive more attention than income inequality measures, with greater concerns for certain groups like older people and children, who have no or limited options for working their way out of poverty.
The average relative poverty rate (i.e. the share of people living with less than half the median disposable income in their country) was 11.4% in 2021 for the OECD countries (Figure 6.4). Poverty rates were highest in the United States (18%) and Costa Rica (21%), while in Czechia, Denmark, Finland, Hungary and Iceland poverty affected only 5‑7% of the population. Mediterranean countries, Baltic countries and Latin American countries have relatively high poverty rates. Among partner countries, poverty is highest in South Africa.
Relative poverty rates vary by gender. In 2021, the average poverty rate for women equalled 12.1% while it was 10.7% for men. Women face a higher risk of poverty than men in all OECD countries and key partners, except in Denmark, Finland, Iceland and Ireland. The largest gender poverty gaps are observed in Estonia, Latvia and Lithuania, where poverty rates among women are 4 to 5 percentage points higher than for men.
Relative poverty rates also vary by age group. On average across OECD countries, poverty is lowest among adults of working age (age 26‑65) at around 10%, while it is higher at 12% for children and youth, and almost 15% for the elderly (Figure 6.5). Child poverty is low in Nordic countries, however it is relatively high in Chile, Costa Rica, Israel, Spain, Türkiye and the United States, where more than one in five children is income poor. Poverty rates amongst youth were particularly high in Denmark, Finland and Norway, which may be explained by the fact that youth generally leave the parental home around age 18, which is early compared to many other OECD countries (see Chapter 1. in this volume). Relative poverty rates of people aged over 65 were around 40% in Estonia and Korea, and above 30% in Latvia. In contrast, Denmark, Iceland and Norway had the lowest relative poverty rates among older people – all below 5%. These numbers are based on income data and the considerable country differences in wealth (housing or otherwise) held by older people are not reflected in income poverty rates.
Another OECD indicator to assess poverty risk is “financial insecurity”. Individuals who are financially insecure are not income poor, but they risk falling into poverty if their income were to stop suddenly, e.g. because of unemployment, disability or family dissolution. Financially insecure individuals would lack sufficient liquid assets to live above the poverty line for more than 3 months in the event of such a sudden loss of income. Across OECD countries, 34% of individuals were financially insecure in 2018 (Figure 6.6), and this concerned more than 45% of the population in Greece, Hungary, Ireland, Latvia, Lithuania and Slovenia, and less than 15% of the population in Korea and the Netherlands.
