1 RESEARCH BULLETIN Social exclusion monitor bulletin October 2013 Francisco Azpitarte In this fourth bulletin we summarise the results of the social exclusion monitor, recently updated using 2011 data, and investigate the capacity of annual measures of social exclusion and income poverty to identify the people who are chronically poor. Background In 2008, the Brotherhood of St Laurence (BSL) in collaboration with the Melbourne Institute (MIAESR) commenced a research project to develop a method to measure the extent and evolution of social exclusion in Australia. In contrast to one-dimensional poverty measures such as those based on income or consumption, the social exclusion approach to disadvantage explicitly recognises the importance of multiple and interrelated factors in determining the capacity of individuals to fully participate in society. The BSL–MIAESR measure of social exclusion draws on the capability framework proposed by Amartya Sen. Consistent with the capability approach, our measure identifies disadvantage with the accumulation of deprivation across different life domains. It uses information from seven life domains: material resources, employment, education and skills, health and disability, social connection, community and personal safety. For each domain, the individual’s level of exclusion is captured using a set of relevant indicators (see Table 1). Data on these indicators come from the national Household, Income and Labour Dynamics in Australia (HILDA) survey. Since 2001, the HILDA survey has annually collected detailed socioeconomic data for a nationally representative sample of the Australian population. The data are transformed into a summary measure of exclusion using a summation method where every domain is assigned the same weight and all indicators within each domain are equally weighted. Thus, our measure of social exclusion is a weighted sum of the level of exclusion in each domain. An individual’s possible social exclusion score lies between 0 and 7, where 7 indicates the highest level of social exclusion. Table 1 BSL–MIAESR measure of social exclusion* Domain Indicators Material resources Low income Low net worth Low consumption Financial hardship Financial status Employment Jobless household Long-term unemployment Unemployment Underemployment Marginal attachment to workforce Education and skills Low education Low literacy Low numeracy Poor English Little work experience Health and disability Poor general health Poor physical health Poor mental health Long-term health condition or disability Household has disabled child Social connection Little social support Infrequent social activity Community Low neighbourhood quality Disconnection from community Low satisfaction with the neighbourhood Low membership of clubs and associations Low volunteer activity Personal safety Victim of violence Victim of property crime Feeling of being unsafe *Note: From 2010 the material resources domain has included an indicator on household financial status. This ensures that there are at least two of the common indicators available every year in all the domains.