A new measure of social exclusion in Australia

The wellbeing of citizens, in particular those suffering disadvantage, is a fundamental measure of society. However, traditional methods used to gauge disadvantage in Australia have involved the examination of income, specifically analysing the number of people living below the ‘poverty line’. This has changed with a partnership between the Brotherhood of St Laurence and the Melbourne Institute of Applied Economic and Social Research utilising a new approach to assessing the proliferation of disadvantage, a measure of social exclusion in Australia.

Social exclusion arises when individuals experience multiple, intersecting problems, such as poor health, unemployment and inadequate education. These multiple problems prevent them from full participation in society.  This phenomenon is now being measured via the Social Exclusion Monitor, a new study that has been developed by the Brotherhood of St Laurence and the Melbourne Institute using data from the annual Household, Income and Labour Dynamics in Australia (HILDA) Survey.

Dr Rosanna Scutella, a Senior Research Fellow at the Melbourne Institute, says that while it is clear that having a gauge for the wellbeing of citizens is important for governments, common aggregate measures of living standards, such as Gross Domestic Product per capita, provide only partial information.

According to Dr Scutella these measures need to be supplemented with indicators examining the distribution of resources and the opportunities associated with that distribution. “In any discussion about social disadvantage, or in this case social exclusion, it is therefore essential to know how many people are disadvantaged, or excluded, who these people are, and the nature of their disadvantage,” she says.

Measuring social exclusion provides a robust tool to evaluate the effectiveness of policy and performance both for government and associated organisations says Dr Scutella, “It provides a baseline from which to identify whether governments’ social exclusion policies are working and enables stakeholders to benchmark and monitor performance. It also enables governments to monitor developments across countries.”

Dr Scutella points out that until recently, the standard indicator used to measure disadvantage in Australia has been the level of income poverty, “The Henderson poverty line has traditionally been the most widely used indicator, measuring the disposable income required to support the needs of a family comprising two adults and two children. Other measures have been developed both here and overseas, typically based on the lack of financial resources as the key indication of persistent poverty.”

Examining social exclusion contributes to the construction of a more complete picture of the underlying causes of disadvantage, “The concept of social exclusion takes the measurement of disadvantage a step further by considering the numerous, overlapping factors that may exclude a person from society,” says Dr Scutella.

“In this way a social exclusion approach provides a more satisfactory basis for identifying disadvantage than traditional income poverty measurement. Socio-economic disadvantage is by its nature multidimensional and its extent, nature, causes and consequences cannot be understood merely by looking to the cash incomes of individuals’ households.”

Robust monitoring provides numerous practical benefits according to Dr Scutella, “The regular reporting of the prevalence of social exclusion will provide an independent monitor of the progress achieved by Australian governments to build social inclusion over the coming years.

The Social Exclusion Monitor uses datasets from the Household, Income and Labour Dynamics in Australia (HILDA) Survey. It is an Australian Government funded household-based panel study conducted by staff from the Melbourne Institute which collects information about economic and subjective well-being, labour market dynamics and family dynamics. The first survey was conducted in 2011 and consisted of 7,682 households and 19,914 individuals. Interviews have been conducted with all adult members of each household on an annual basis since then.

Dr Scutella says that while no single Australian data source currently available comprehensively meets the needs to measure social exclusion, the HILDA survey data provides a comparative rich source, “Its annual frequency and its longitudinal structure, suggest that it is the best available source for individual-level measures of social exclusion, enabling multidimensional measures as well as consideration of the causes and persistence of exclusion.”

The Social Exclusion Monitor examines characteristics such as gender, age, country of birth, ethnicity, health, education, family structure and living conditions contribute to social exclusion. Recent findings, which examined HILDA data from 2001-08, indicate that more than one million Australians experienced what is known as ‘deep social exclusion’.

Other findings of the Social Exclusion Monitor include:

The Social Exclusion Monitor sees the continuation of a strong association between the Melbourne Institute and the Brotherhood of St Laurence that traces back to the days of Professor Ronald Henderson and his seminar research on poverty in Australia.  It is a relationship that was formalised with the creation of a jointly funded position of Ronald Henderson Research Fellow.

According to Dr Scutella, “This project to develop a new way of measuring social exclusion is a recent example of the collaborative work of the Melbourne Institute and the Brotherhood of St Laurence that was facilitated by the Ronald Henderson Research Fellowship.”

The social exclusion monitor will be updated with 2009 data later this year. It is planned that this analysis of the HILDA Survey data will allow findings to be reported on the Social Exclusion Monitor on an annual basis thereafter.  “We will also report on emerging themes from the analysis such as trends over time and particular clusters of barriers faced by specific groups at different stages over the life course,” says Dr Scutella.

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