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International Differences in Poverty Rates

The data in the Country Comparisons chart comes from Table 1 of a study done for the Organization for Economic Co-operation and Development (OECD) called the Luxembourg Study. The study was done by Professor Timothy Smeeding in 2005 to compare poverty rates among older persons.  The LIS team compiled micro-data from different surveys in order to facilitate international comparative research.  The OECD is an organization consisting of developed countries that researches and coordinates economic, environmental and social policies.

See also:

Highlights from OECD, Pensions at a Glance
United States Highlights from OECD Pensions at A Glance

Table 1 provides cross-national data on poverty rates among older persons. That data provide poverty rates for households having a person over the age of 64. These poverty rates are measured relative to the median income in the country—either 40 percent or 50 percent of the median income. Thus they measure poverty relative to the standard of living in the country rather than measuring it against an absolute benchmark.

The average poverty rate for the eleven countries excluding the United States using the lower measure of 40 percent of median income is 4.7 percent. By comparison, the poverty rate in the United States by this measure is 14.3 percent, which is 10 percentage points higher, or three times as high. Making the same comparison for the higher benchmark of 50 percent of median income, the average for the eleven countries excluding the United States is 11.9 percent, compared to 24.6 percent for the United States.

Comparing with Canada, which is similar to the United States in some respects, 14.3 percent of the U.S. elderly population lives in a household with 40 percent or less of the median income, compared to 1.4 percent in Canada

*Poverty rate information is not included for Japan since that data is not part of the LIS data set.