Abstract
Using multi-regional input-output analysis, this chapter shows that the OECD countries would only need to spend about 0.36% more on final demand to ensure all workers’ earnings are at least as high as the international poverty line. Due to missing data for about 70 countries and the fact that the data only covers the workers and not their families and other people not participating in the workforce, this number is unfortunately only a lower bound. The poverty data used here includes about 25% of all people living in extreme poverty. Nonetheless, even if everyone living below the poverty line would be included, the additional spending on final demand by OECD countries would only need to be about 1.5% of the current (2010) spending on final demand in OECD countries.
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Notes
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More than half of the Sub-Saharan African countries and some of the Western Asian countries including India are missing as well as some of the Latin American countries and Pacific Island states.
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Note that the shares relate to those countries for which poverty data (i.e. data on the number of workers with daily earnings below the poverty line) is available.
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Note that the poverty line of $1.25 is calculated in international purchasing power parities. That is, in more expensive countries, the actual dollar value of the poverty line is significantly higher.
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Alsamawi, A., McBain, D., Murray, J., Lenzen, M., Wiebe, K.S. (2017). Raising the International Poverty Line—A Comparison of Necessary Adjustments of Final Demand Spending in OECD and Non-OECD Countries. In: The Social Footprints of Global Trade. Environmental Footprints and Eco-design of Products and Processes. Springer, Singapore. https://doi.org/10.1007/978-981-10-4137-2_8
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