Assessing reduction in multidimensional childhood poverty in India: a decomposition analysis

Empirically, the official measurement of multidimensional poverty often shows children as the poorest age group. According to Global Multidimensional Poverty Index report, Africa and South Asia bear the highest burden multidimensional child poverty (MCP). Around one-third of children aged 0-4 are multidimensionally poor in India. Policymakers in India must have appropriate information on child poverty to alleviate poverty. The purpose of this paper is to examine MCP trends and track efforts to reduce child poverty at the national level across geographic regions, castes, and religious groups.

We used the Alkire-Foster method to calculate the MCP index (MCPI) among children aged 0-4 using the latest two rounds of National Family Health Survey data (2015-16 and 2019-21). We applied the Shapley decomposition method to analyse the marginal contribution of incidence and intensity that lead to changes in MCPI.

In India, the incidence of child poverty reduced by more than 40% between 2015-16 and 2019-21 (46.6-27.4%) and the MCPI reduced by half (24.2-12.6%). The relative decline in MCPI has been largest for urban areas, northern regions, Other Backward Classes (OBCs) and Hindus. Children from rural areas, Scheduled Castes (SCs), Scheduled Tribes (STs), and Muslim households are the poor performers. When focusing exclusively on the poor child, we found all the population subgroups and geographic locations reduced the censored headcount ratios in all 14 indicators. Across places of residence, castes, religions, and regions the, indicators like electricity, birth registration, drinking water, assisted delivery, sanitation and cooking fuel made significant improvements between 2015-16 to 2019-21.

The study indicates that by studying the MCPI over time, one can identify the priorities in policy development to achieve the Sustainable Development Goals.