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=
1
=1
In expression (1) Q represents the number of households whose income
is below
the chosen poverty line z and N is the size of the population. The poverty gap may be
estimated either taking the whole population N into account or among the poor. In the latter
case the overall population N in (1) is replaced with a population of the poor Q.
Similar to other vulnerability analysis (Foster et al. 2010b, Celidoni 2011), we replace
the actual household incomes with the possible income values for the household,
=
(
1,
, ,
) , where s is the number of possible states that the household h could face.
2
Individuals who are not protected my means of social insurance are not included into the exercise, as
presumably high levels of vulnerability among them would reflect the functioning of only one non-
contributory part of the Lithuanian social protection system. The self-employed are among such potentially
more vulnerable groups, as currently fall outside the social insurance for unemployment.
9
We make an assumption that an income shock is experienced by one household member at a
time. However, in cases when there is more than one household member who might be
subject to income shock, all the possible combinations, i.e. possible states, within the
household are analysed by recalculating household income
=
1
=1
(
In expression (2)