Child poverty modelling: update
This report estimates the impacts of Scottish Government policies on child poverty, updating the modelling that was originally undertaken for the second Tackling Child Poverty Delivery Plan. It also analyses the impacts of current and hypothetical UK Government welfare policies.
6. Calibration
The child poverty rates implied by our model can differ from the official poverty statistics, which are used to measure the child poverty targets. These differences can occur for a number of reasons, including the well-known problem of survey respondents underreporting their benefit income. We therefore adjust (or ‘calibrate’) the outputs of the model so that they are consistent with the official statistics.[26]
Our calibration method is based on the latest year of FRS data that is available in the model, in this case 2022-23. As noted in the previous update, which sets out the method in more detail, the rationale for this approach is that the latest data could be expected to provide the most reliable guide to any future discrepancies between the model and the survey. However, the disadvantage of using a single year is that it introduces a degree of volatility in the projections.[27]
This volatility works both ways: in the previous update it acted to lower our projections of child poverty, because the difference between the model outputs and the official statistics narrowed, whereas in this update it acts to raise our projections because the difference widened. This is demonstrated in Tables 7 and 8, which set out the results of an alternative, multi-year calibration method. The particular method used here is based on comparing the simple mean of the official statistics in the last two years of data that are available in the model – that is, 2021-22 and 2022-23 – with the simple mean of child poverty rates outputted by the model for those years.
| Single-year method (2022-23) | Multi-year method (2021-22 / 2022-23) | |
|---|---|---|
| 2021-22 / 2022-23 | - | 24 |
| 2022-23 | 26 | - |
| 2025-26 | 24 | 22 |
| 2026-27 | 23 | 20 |
| 2027-28 | 23 | 21 |
| 2028-29 | 22 | 20 |
| 2029-30 | 22 | 20 |
Source: SG analysis using UKMOD
| Single-year method (2022-23) | Multi-year method (2021-22 / 2022-23) | |
|---|---|---|
| 2021-22 / 2022-23 | - | 21 |
| 2022-23 | 23 | - |
| 2025-26 | 21 | 18 |
| 2026-27 | 18 | 16 |
| 2027-28 | 18 | 16 |
| 2028-29 | 18 | 15 |
| 2029-30 | 18 | 15 |
Source: SG analysis using UKMOD
Neither our single-year calibration method nor the multi-year method shown here affect the estimated impacts of policies in percentage-point terms, because the baseline and counterfactual scenarios are adjusted by the same increments in each year. This is by design, since we can generally be more confident when isolating the impacts of policies than when projecting outcomes such as child poverty rates.[28] However, other calibration methods could produce different results, both in terms of the projections and in terms of the estimated impacts.
Contact
Email: spencer.thompson@gov.scot