Social Indicators Research

https://doi.org/10.1007/s11205-019-02093-0

Material Deprivation and Working Poor in Hong Kong

Kelvin Chi‑Kin Cheung1   · Wai‑Sum Chan2 · Kee‑Lee Chou1

Accepted: 18 February 2019

© Springer Nature B.V. 2019

Abstract
In-work poverty is a growing problem in many developed economies. In Hong Kong, there
were 200,700 working poor households in 2016, and approximately half of the total poor
population in Hong Kong was living in those working poor households. A growing body
of literature has examined the problem of the working poor, but most studies have used
relative income as a measure of poverty. In this paper, we adopt the material deprivation
approach for assessing the poverty situation of in-work poverty households in Hong Kong.
We have interviewed 3565 workers in Hong Kong during a survey conduct in 2016. We
compare the results of the material deprivation approach with those of the income poverty
approach and evaluate the adequacy of the official income poverty line in gauging the situ-
ation of in-work poverty. Our findings reinforce existing studies indicating that deprivation
offers an important complement to the income poverty line in poverty analysis. Our results
show that there is a moderate overlap between workers identified as poor by the depriva-
tion approach and by the income poverty line. And these two groups of workers have very
different profiles. The results provide important policy implications for alleviating poverty
among the working poor in Hong Kong.

Keywords  In-work poverty · Material deprivation · Hong Kong

1 Introduction

In-work poverty is a growing problem in many developed economies (Fleury and Fortin
2006; Brady et  al. 2010; Cooke and Lawton 2008; Grimshaw 2011). As a result of eco-
nomic globalization, many manufacturing jobs in developed economies have been relo-
cated to countries with lower labor and regulatory costs. Facing increased international
competition, low-skilled laborers in many developed economies are suffering a stagnation
of their wages. As a result, many low-income workers are struggling to finance their house-
hold expenditure. In-work poverty is also an emerging problem in Hong Kong. According
to the latest Poverty Situation Report, published by the Hong Kong government (HKSAR

* Kelvin Chi‑Kin Cheung

cheungchk@eduhk.hk
1
Department of Asian and Policy Studies, The Education University of Hong Kong, Tai Po,
Hong Kong, China
2
Department of Finance, The Chinese University of Hong Kong, Sha Tin, Hong Kong

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 K. C.-K. Cheung et al.

Government 2017), there were 1,352,000 poor people in Hong Kong in 2016. Among
them, 680,800 people were living in 200,700 working-poor households, which account
for 9.28% of the total population. In other words, half of the poor population in Hong
Kong lives in working-poor households. For that reason, the situation of the working poor
deserves both academic and policy attention.
A growing body of literature has examined the problem of the working poor, and most
of those studies have used relative income as a measure of poverty (Brady et  al. 2010;
Cooke and Lawton 2008; Goerne 2011). Although income is used widely as the poverty
indicator internationally, there are important limitations to using income alone to assess the
well-being of the working poor. First, poverty is multidimensional in nature, and the full
picture cannot be captured by income level alone (Bradshaw and Finch 2003; Townsend
1979; Alkire and Foster 2011; Anand and Sen 1997). Second, income is only a proxy
measure of an individual’s well-being. Other factors, such as the cost of living and an indi-
vidual’s capacity to source from other means to meet one’s needs, may modulate the effect
of income on that person’s well-being. Such complexity is especially pertinent in devel-
oped economies where the cost of living is high, and income level alone is inadequate for
gauging the well-being of the working population.
In addition to income poverty, material deprivation is increasingly being used as an
alternative measure of in-work poverty (Crettaz 2015). However, it has not been used to
evaluate poverty among working populations in Asian societies. In Hong Kong, the official
poverty measure is a relative income poverty line that is set at half of the median household
income (HKSAR Government 2013). Existing studies have already raised concerns about
the adequacy of the official poverty line in assessing the poverty situation of Hong Kong’s
general population (Saunders 2015). The current study adopts the material deprivation
approach for assessing the poverty situation of in-work poverty households in Hong Kong.
We have interviewed 3565 workers in Hong Kong during a survey conduct in 2016. In this
paper, we will compare our results from the material deprivation approach with those from
the income poverty approach, in an attempt to evaluate the adequacy of the official income
poverty line in gauging the situation of in-work poverty in Hong Kong. We will also assess
the relations between various demographic, household and employment-related character-
istics of these households with the probability of being income poor and deprived.

1.1 Income Poverty and the Working Poor

Existing studies on the working poor have identified a number of micro-level factors that
contribute to income poverty. For instance, low employment status and low income are
found to be associated with low human capital, such as poor educational level of the bread-
winner (Julian and Kominski 2011). Immigrants are also likely to earn less than their
native counterparts, as a result of discrimination and poor social reception by the host soci-
ety (Lam and Liu 1998; Liu et al. 2004; Chou et al. 2014). Similarly, gender discrimination
is widely recognized as a prominent factor in the low income of females in many devel-
oped economies (Darity and Mason 1998; Davies and Joshi 1998). In addition, individuals
without a stable source of income, including those who engage in part-time employment
or have only a temporary employment contract, are likely to experience in-work poverty
(Peña-Casas and Latta 2004; European Commission 2012; Lohmann and Andreβ 2008).
Apart from these individual characteristics, working poor households often have low labor
intensity (Burkhauser et al. 1995; Maitre et al. 2003; Buchel et al. 2003). That situation is
especially the case for single-parent households, because childcare responsibilities often

13
Material Deprivation and Working Poor in Hong Kong

prevent the sole breadwinner from participating in full-time employment (Ambert 2006;
Chzhen and Bradshaw 2012; Cheung 2015).
Studies to date have identified similar characteristics among the working poor in Hong
Kong. A recent study of Hong Kong’s working poor showed that the majority of working
poor had not received a university education and that immigrants accounted for a greater
proportion of poor workers than did local born workers. Most poor workers are employed
in low-paying jobs, and the majority of working poor households have only one income
earner (Cheung and Chou 2016).
In terms of macro-level variables, a study of in-work poverty in Europe suggests that
macroeconomic and demographic changes also contribute to the economic well-being of
the working poor (Crettaz 2011). In Hong Kong, an important macroeconomic develop-
ment that has influenced the economic conditions of laborers is the change in economic
structure. Since the 1970s, Hong Kong has undergone a process of deindustrialization,
during which a majority of the manufacturing industries relocated to Guangdong province
to take advantage of the low cost of production in Mainland China. Between 1991 and
2016, the percentage of workers employed in manufacturing industries in Hong Kong has
dropped, from constituting more than 25% of the working population in 1991 to less than
5% today.1 Surplus laborers from the manufacturing industries are competing with workers
in other low-skill sectors.
Demographic changes also increased the competition among Hong Kong’s low-skilled
workers. In recent decades, the population growth in Hong Kong has mainly been due to
immigrants from Mainland China, especially through the One-Way Permit (OWP) Scheme,
which has a daily quota of 150 people. Between 2001 and 2015, 689,000 immigrants from
Mainland China came to Hong Kong through the OWP Scheme, whereas the net popu-
lation growth during the same period was only 613,000 (Legislative Council Secretarist
2017). Since the OWP is a non-merit-based immigration scheme, the majority of these new
migrants are competing with local workers for low-income jobs. Government figures show
that their median monthly employment income is generally lower than that of the popula-
tion as a whole (Legislative Council Secretarist 2017).
The process of deindustrialization and the constant supply of low-skilled immigrant
workers have hindered an increase in wage levels among the bottom social strata.
Over the past decade, the income gap between high-income and low-income workers
has widened. The situation of low-income workers has been only slightly alleviated by
the introduction of minimum wage legislation in 2003 (Census and Statistics Department
2017).
Although low income is an important poverty indicator, it may not sufficiently reflect
the disadvantaged position of the working poor, because a person’s capacity to consume
and participate in a society also depends on the costs associated with living in that soci-
ety. As an affluent society, the cost of living in Hong Kong is high. A recent report by
the Economist Intelligence Unit ranked Hong Kong the second most expensive city in the
world (The Economist Intelligence Unit 2017). High expenditures for certain necessities,
such as rental or mortgage payments, may significantly reduce the disposable income of a
household for expenses in other areas. Thus, the financial resources of individuals who are
not considered poor according to an income poverty assessment may still be insufficient to
ensure their well-being if they have to endure high living expenses. Thus, to fully reflect

1
  The figures are based on the statistics published in various years by the Census and Statistics Department
of the HKSAR government.

13
 K. C.-K. Cheung et al.

the well-being of the working poor, additional measurements are needed to supplement the
use of the income poverty line.

1.2 Deprivation Approach

In the literature on measuring poverty, the deprivation approach is increasingly recognized

as valuable in gauging the well-being of the poor (Shaffer 2013; Saunders et al. 2008; Cret-
taz 2015). The deprivation approach assesses the well-being of an individual based on the
extent to which that person is able to possess the materials and participate in the activities
that are considered to be essential in society. As opposed to income poverty, the depriva-
tion approach assesses whether individual’s material wellbeing is fulfilled. It also acknowl-
edges the multidimensional nature of poverty by including in poverty measurements such
aspects as the individual’s social exclusion and other factors that cannot be easily repre-
sented by monetary measures (Nolan and Whelan 2010).
Because items that are considered to be essential vary among different sociocultural
environments, the measurement of deprivation needs to consider the preferences of the
local community and the relevant subgroups within the population. To achieve that, a dis-
cursive method is often adopted to identify the list of necessities that are considered as
essential for participating in the local community (Shaffer 2013; Saunders et al. 2014). It
is generally accepted that a list of deprivation items can be established when more than
half of local respondents agree that the listed items are essential to living in their society
(Dickes et al. 2010; Halleröd 1995; Saunders et al. 2008).
An important concern when assessing material deprivation is consideration of whether
personal preferences should be taken into account for the list of deprivation items. Lack
of resources might deprive a person of certain necessities, but the absence of certain dep-
rivation items might also be the result of personal choice rather than a lack of capacity
(Piachaud 1981). To differentiate between preference and lack of resources, respondents
are usually asked to ascertain whether the absence of a deprivation item in their life is due
to an inability to afford it (Saunders et al. 2014).
It has been argue that poverty measurement always involves a value judgement on what
constitutes wellbeing, and it is not only possible to measure subjective well-being but also
preferable as it enable us to quantify the importance of individual variables used in other
approaches of poverty measurement (Kingdon and Knight 2006). However, the caveat of
introducing the subjective assessment of deprivation is that subjective wellbeing involve
a value judgement as to what constitutes a good life. People living in a sustained period
of poverty may alter their preferences and reduce their desires for material well-being in
order to adapt to the material constraints they experience (Hick 2013). Such adaptation
will result in an underestimation of material deprivation among a population undergoing
sustained hardship. For instance, older people are more prone to underreport their material
deprivation as a result of such adaptation (Hick 2013).
Individual’s preference may also be shaped by the prevailing value of a society and
results in local variations of reported subjective wellbeing compare to objective measure
of poverty. For instance, in a study of the effect of the local value of Buen Vivir on the
subjective wellbeing poverty of Rural Ecuador, García-Quero and Guardiola (2017) find
that, although income poverty tends to predict the subjective well-being poverty in general,
income poor household that grow their own food and residing in an indigenous community
are less likely to consider themselves in poverty. Garcia-Quero and Guardiola attribute this
to the indigenous happiness idea of Buen Vivir (Living Well) which place greater emphasis

13
Material Deprivation and Working Poor in Hong Kong

on community ties and experience with nature. Similarly, the study of Pradhan and Raval-
lion (2000) in Jamaica and Nepal finds that subjective poverty shows greater variations in
different regions than the objective measure of poverty in these regions suggest, in particu-
lar, people in poor areas tend to see themselves to be even poorer than objective measures.
The deprivation approach addresses some of the limitations of the income poverty
approach. First, the material deprivation approach assesses whether individual’s material
wellbeing is fulfilled. Through measuring the necessities that one does not possess, the
deprivation approach takes into account the cost of living and other financial burdens expe-
rienced by different people. It also considers the variations of an individual’s ability to
source from other means, including drawing on the person’s own assets, going into debt,
or financing with the help of relatives, to fulfil basic needs (Nolan and Whelan 2010). In
addition, although the income poverty line measures the amount of resources a household
commands, without the information on intra-household distribution, we cannot ascertain
whether the material wellbeing of individual household member is fulfilled through receiv-
ing their share of income. The deprivation approach, on the other hand, avoids such prob-
lems by directly assessing the extent to which an individual is deprived of essential items.
The deprivation approach also avoids the complication involved in gauging income pov-
erty among different types of households. When assessing income poverty, certain adjust-
ments to the household’s raw income must be made in order to compare the poverty situa-
tion of households of different sizes and composition. Different types of Adult Equivalent
Scales (AES) have been used to calculate household equivalent incomes, but there is no
consensus on how to adjust for the needs of children and additional members of the house-
hold, and the choice of AES is often arbitrary (Coulter et al. 1992).
Existing studies have pointed out that income poverty and deprivation may produce
divergent results when assessing people’s well-being (Bradshaw and Finch 2003; OECD
2008; Saunders et al. 2008). In a study of material deprivation in the general population
in Hong Kong, Saunders et  al. (2014) show that there is only moderate overlap between
the population that is identified as deprived and the population that is identified as income
poor. Given the high cost of living in Hong Kong, a considerable number of workers are
suffering from material deprivation, even when their income is above the official poverty
line. As such, the situation of deprivation among the working poor in Hong Kong need to
be systematically investigated. This paper is a continuation of the study of Saunders et al.
(2014) by developing the deprivation measures of working poor in Hong Kong based on
the preference of the relevant subgroup within the population.

2 Data and Methodology

This study used the sampling frame randomly drawn by the Department of Census and
Statistics of the Hong Kong SAR Government from the General Household Survey data-
base local census list (n = 8000). We adopted a two-stage stratified sample design by using
the records in the frame of quarters, which were stratified by geographic area and type of
quarter. For the first stage, a random sample of quarters was selected. For the second stage,
one working member of selected households with at least one working adult was invited to

13
 K. C.-K. Cheung et al.

an interview, using the last-birthday method.2 Working adults who were aged 18 and older
and lived in the community were eligible to be interviewed. In our study, a worker was
defined as an individual who had been working for at least 6 months in the prior year. Of
this sampling frame, 5681 workers were invited to participate in our study, and 3565 work-
ers were successfully interviewed in their households using the face-to-face format, thus
yielding a response rate of 62.8%.
During the interview, respondents were asked to provide their demographic, employ-
ment-related and household information. Demographic information includes age, gen-
der, marital status, educational attainment, immigrant status (born in Hong Kong or not),
receiving welfare, housing status. Workers’ employment-related information includes
occupation, hourly pay, low earning from the primary employment (< 66.6% of median
earning); number of hours worked per week; type of contract (permanent vs temporary);
whether or not they have secondary employment; and size of workplace (1–5 persons,
6–10 persons, and more than 10 persons). Houehold information includes household labor
intensity, which is the ratio of working to non-working household members of working age
(18–64) (less than 0.5; ≥ 0.5 and < 1; ≥ 1); number of earners in the household (1, 2, and
3+); number of older persons (65+); and number of children (< 18).
Household income was assessed by asking respondents whether they had received a
monthly income from any one or more of a number of sources, including wages, pensions,
investments, transfers from family members living elsewhere and other sources of govern-
ment assistance, such as the Comprehensive Social Security Assistance (CSSA) scheme, a
major cash transfer welfare program in Hong Kong which all Hong Kong residents, includ-
ing new immigrants, who have held the resident status for not less than one year and satisfy
the means-tested criteria are eligible to apply. Equivalized monthly household income was
calculated by adjusting the total monthly household income using the square root formula.3
In this study, the threshold income for identification as relatively income poor was defined
as half of the median equivalized household income.
To establish the threshold for material deprivation, we adopted and modified the mate-
rial deprivation questionnaire used in previous local studies to develop a 32-items depri-
vation index for workers (Saunders et al. 2014). We removed from the list any items that
were not related to working adults, such as ‘students have school uniforms of proper size
every year’ and ‘students can participate in extra-curricular services’. Using the 32-item
list, we asked participants whether or not they agreed that each item was a necessity. More
than half of the participants supported all the items as necessities, except two: ‘able to take
part in charged activities organized by a neighbourhood or social service organization’,
and ‘take part in leisure activities on holiday’. We removed those two items from further
analysis, on the basis of criteria set in previous studies (Gordon 2006; Gross-Manos 2015).
Participants were then asked to indicate whether they had each item on the list, and if not,
whether that was because they were unable to afford the item. Those two answers were
used to determine if participants could not afford to possess the items on the list.
Following the approach adopted by Townsend (1979), we might identify a deprivation-
based income poverty line if there is such a threshold. Table  1 shows how the means of
material deprivation index scores changed across participants who belonged to different

2
  If there were more than one eligible participant living in the household, the one who had his or her birth-
day most recently would be invited to participate in the study.
3
  The square root formula estimates the number of equivalent adults as being the square root of the number
of individuals in a household.

13
 Table 1  Working members of the population who had or did not have necessities, as a percentage of the sample (n = 3565)
Items Identified as necessities Did not have Did not have and could not Missing data
afford

Food and clothing

Has three meals a day 1.7 0.2 0.6
Has meat, fish or equivalent at least two meals every other day 3.1 0.3 0.6
Has fresh fruit or vegetables every day 4.0 0.2 0.6
Has fresh/frozen poultry on every festival 5.1 0.7 0.7
Has one or two new pieces of clothing every year 6.1 0.8 0.6
Has adequate winter clothes 0.3 0.2 0.6
Has a set of formal clothing 8.9 3.3 0.7
Medical, dental and optical care
Can go to doctor of private practice when ill 8.5 8.4 0.6
Material Deprivation and Working Poor in Hong Kong

Can consult Chinese herbalist and purchase prescribed medicine when ill 29.3 5.4 0.8
Has annual dental check-up 47.2 19.1 0.8
Has regular annual eye examination and can pay for glasses when needed 35.8 10.9 1.0
Home facilities and items
Has private access to cooking and bathing facilities 1.9 0.2 0.8
Has television 0.7 0.1 0.6
Has landline phone 10.4 0.5 0.6
Has mobile phone 4.4 0.2 0.6
Has refrigerator 0.2 0.0 0.6
Has washing machine 1.6 0.4 0.6
Has electric fan 0.1 0.1 0.6
Has air-conditioner 0.5 0.1 0.6
Has rice cooker 0.4 0.0 0.6
Has internet access at home 10.2 1.2 0.6
Has sufficient funds to replace old and damaged home furniture 22.2 9.9 0.7

13
Has sufficient funds to replace/service damaged electronic home appliances 21.1 8.3 0.6

Table 1  (continued)
Items Identified as necessities Did not have Did not have and could not Missing data
afford

13
Petty cash
Has a small amount of petty cash for personal use every week 1.9 1.6 0.6
Social and family life
Can celebrate festivals or special days 2.9 1.3 0.7
Can eat out at least once a month 5.2 4.1 0.7
Can travel outside of Hong Kong for a week every year 31.9 24.1 0.8
Can have leisure activities with family or friends at least once a month 34.8 7.8 0.6
Can buy gifts for relatives or friends who are getting married 5.6 3.2 0.8
Can give out red pocket money during Chinese New Year 4.7 1.4 0.8
K. C.-K. Cheung et al.
Material Deprivation and Working Poor in Hong Kong

Fig. 1  Mean Deprivation Index 4

Score (MDIS) by equivalized
household income decile
3

MDIS
2

0
1 2 3 4 5 6 7 8 9 10
Income decile

income deciles (using equalized household income). We plot the findings in Table 1 using
the income decile (1st to 10th) as the x-axis and the means of material deprivation index
scores of participants belonged to each income decile group as the y-axis. Figure 1 shows
that the level of deprivation is much greater in the lowest three income deciles (3.8, 3.6,
and 3.3, respectively), reduced substantially in the fourth income decile (to 1.12), and
drops gradually as income increases to about 1.0 in deciles five and six, and to well below
1.0 in the top two deciles. The overall pattern is remarkably similar to that found in the
general populations of Hong Kong (Saunders et  al. 2014) and Australia (Saunders et  al.
2008). Following the approach used in a recent study (Saunders et al. 2014), we found a
threshold for the poverty line based on the level of deprivation itself. Based on the findings
in Table 1, we set the cut-off point used to identify deprivation in Hong Kong’s working
population as lacking at least three essential items due to affordability. By that definition,
17.8% of workers in this study were experiencing a level of deprivation that is consistent
with income poverty.
The paper will first describe the deprivation situation among Hong Kong workers and
analyse the overlap between workers identified as having income poverty and those hav-
ing deprivation. We will then report the profiles of the groups that are identified as income
poor and/or deprived based on their demographic, employment and household charac-
teristics. We will use Chi square test to establish whether there is significant differences
between these groups in terms of all variables we analyzed. Lastly, we performed logistic
regression analyses on the likelihood of income poor as well as materially deprived by
using all independent variables.

3 Results and Discussion

3.1 General Situation of Deprivation Among Workers

Table 1 shows the 30 items that the majority of the working population considered to be
essential. As can be seen in Table 1, less than 3% of workers were deprived of 19 items
(i.e., did not have the items and could not afford them), and 16 of those 19 items were
related to basic food and clothing and to home facilities and items. These results show that
workers in Hong Kong were not deprived of such basic needs in general. Deprivation rates

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 K. C.-K. Cheung et al.

Table 2  Mean Deprivation Index Income range (monthly) MDIS

Score (MDIS) by equivalized
household income decile
1 HK$0–HK$6363 3.84
2 HK$6364–HK$7915 3.55
3 HK$7916–HK$9192 3.31
4 HK$9193–HK$10,606 1.12
5 HK$10,607–HK$12,199 1.11
6 HK$12,200–HK$14,283 1.02
7 HK$14,284–HK$16,752 0.89
8 HK$16,753–HK$20,207 0.79
9 HK$20,208–HK$25,560 0.57
10 HK$25,561+ 0.42

for four other items were between 10% and 38%; those items were mainly categorized as
medical care (2 items), home facilities (1 item), and leisure activities (1 item). The depri-
vation rate was the highest for the item ‘can leave Hong Kong for a vacation once a year’
(24%), followed by ‘has annual dental check-up’ (19%).
These findings suggest that many workers do not have the financial capacity for pre-
ventive medical services and expensive leisure activities. Another interesting finding, also
seen in Table 1, is that the gap between those who do not have items and those who cannot
afford them is small for most items, except for items related to medical care (e.g., consult-
ing private doctors or Chinese medicine practitioners, having a dental check-up, and get-
ting an eye examination), replacing home furniture or electrical appliances, and engaging
in expensive leisure activities (e.g., travel outside Hong Kong).

3.2 The Threshold of the Index of Material Deprivation

Table  2 shows how the means of material deprivation index scores changed across par-
ticipants who belonged to different income deciles (using equalized household income).
We plot the findings in Table  2 using the income decile (1st to 10th) as the x-axis and
the means of material deprivation index scores of participants belonged to each income
decile group as the y-axis. Figure 1 shows that the level of deprivation is much greater in
the lowest three income deciles (3.8,, 3.6, and 3.3, respectively), reduced substantially in
the fourth income decile (to 1.12), and drops gradually as income increases to about 1.0
in deciles five and six, and to well below 1.0 in the top two deciles. The overall pattern is
similar to that found in the general populations of Hong Kong (Saunders et al. 2014) and
Australia (Saunders et al. 2008). Based on the findings in Table 2, we set the cut-off point
used to identify deprivation in Hong Kong’s working population as lacking at least three
essential items due to affordability. By that definition, 17.8% of workers in this study were
experiencing a level of deprivation that is consistent with income poverty.

3.3 Overlap Between Deprivation and Income Poverty

Based on the income poverty line being defined as half of the median household income
and the deprivation threshold being an inability to afford more than three deprivation
items, we investigated the overlap between poverty measured in terms of income and that

13
Material Deprivation and Working Poor in Hong Kong

Table 3  Overlap between people identified as having income poverty and those having deprivation (%)

Income poverty rate 9.6

Deprivation rate 17.8
Percentage of people who are deprived and income poor 4.1
Percentage of people who are income poor but not deprived 5.5
Percentage of people who are deprived but not income poor 13.7
Percentage of people who are not deprived and not income poor 76.7

The deprivation threshold was set at lacking at least 3 essential items. Note that 1.5% of observations in the
sample were missing household income

measured by deprivation among the workers in this study. The result shows that the overlap
between income poverty and deprivation is low.
As Table  3 shows, 17.8% of our respondents experienced material deprivation, while
only 9.6% were income poor. Among the deprived workers, only a small fraction was also
income poor (4.1% of the respondents), whereas a majority of the deprived workers were
not considered poor according to the income poverty approach (13.7% of the respond-
ents). The results suggest that the income poverty approach overestimates the well-being of
workers in Hong Kong. More importantly, the income poverty approach appears to fail to
accurately identify a group that needs help in the population—especially the group that is
not income poor but is being deprived of certain basic necessities in society.
On the other hand, when we examined the working population who are income poor
(9.6%), slightly more than half of them were not deprived (5.5% of the respondents). It is
unclear whether those people sourced materials from other means or had adapted to their
resource constraints and had altered their desires. The results also show that 4.1% of our
respondents were both materially deprived and income poor, and that group is generally
considered as being in consistent poverty (Maître et al. 2006; Saunders and Naidoo 2009).

3.4 Characteristics of Income Poor and Deprived Workers in Hong Kong

We compared the profiles of those who were both deprived and income poor (doubly
deprived), those who were income poor but not deprived (income poor), those who were
deprived but not income poor (deprived poor), and those who were neither materially
deprived nor income poor (neither). The results in Table  4 show that these four groups
were significantly different from each other in terms of all the variables we analysed except
for the one that assessed whether they had a secondary job.
When we compared the profile of those who were deprived poor (the group that had
been neglected by the income poverty approach) and that of the income poor, we found
that more young workers (18–34 years old) experienced deprivation even when they were
not income poor, whereas a higher proportion of the income poor belonged to the older age
groups of people 35–44 and 45–54 years old. Although married people accounted for the
largest proportion in these groups, a larger percentage of people who had never married
were deprived poor than were income poor. Similarly, a higher percentage of immigrant
workers were deprived poor than were income poor. As expected, a higher percentage of
workers who were nonskilled and earning lower hourly pay were among those who were
income poor than were among those who were deprived poor.

13

Table 4  Descriptive statistics: the relationship between deprivation and poverty groups
Demographic and socioeconomic characteristics Frequency (%) Income poor (%) Not income poor Chi square
(%)

13
Age
18–34 33.0 Deprived 18.30 30.70 85.17**
Not deprived 22.60 34.90
35–44 21.7 Deprived 33.10 27.00
Not deprived 32.60 19.30
45–54 25.1 Deprived 36.60 26.80
Not deprived 32.10 23.70
55+ 20.2 Deprived 12.00 15.50
Not deprived 12.60 22.00
Gender
Male 64.0 Deprived 77.90 75.40 58.14**
Not deprived 71.90 60.70
Female 36.0 Deprived 22.10 24.60
Not deprived 28.10 39.30
Marital status
Never married 34.7 Deprived 17.20 32.90 53.85**
Not deprived 18.00 37.10
Married 62.1 Deprived 78.60 64.60
Not deprived 78.90 59.50
Divorced/separated/widowed 3.0 Deprived 4.10 2.10
Not deprived 3.10 3.10
K. C.-K. Cheung et al.
 Table 4  (continued)
Demographic and socioeconomic characteristics Frequency (%) Income poor (%) Not income poor Chi square
(%)

Educational attainment
Primary or below 15.5 Deprived 12.10 14.30 115.70**
Not deprived 11.90 16.10
Secondary 64.7 Deprived 81.40 79.60
Not deprived 79.10 60.10
Post-secondary 19.8 Deprived 6.40 6.10
Not deprived 9.00 23.80
Immigrant status
Born in Hong Kong 72.7 Deprived 59.30 63.20 43.30**
Not deprived 77.60 74.70
Material Deprivation and Working Poor in Hong Kong

Not born in Hong Kong 27.3 Deprived 40.70 36.80

Not deprived 22.40 25.30
Receiving CSSA
Yes 0.8 Deprived 1.40 4.70 109.07**
Not deprived 0.00 0.10
No 94.0 Deprived 97.20 93.90
Not deprived 87.30 94.30

13

Table 4  (continued)
Demographic and socioeconomic characteristics Frequency (%) Income poor (%) Not income poor Chi square
(%)

13
Housing status
Public rental housing 40.9 Deprived 50.30 55.80 85.50**
Not deprived 48.00 37.20
House ownership scheme 16.7 Deprived 11.00 7.20
Not deprived 16.70 18.70
Private housing 42.5 Deprived 38.60 37.00
Not deprived 35.40 44.20
Employment-related characteristics
Professional/Managers/Associated professional 20.2 Deprived 6.40 8.50 160.19**
Not deprived 9.90 23.80
Clerical workers 19.6 Deprived 8.50 19.90
Not deprived 12.60 20.60
Sales workers 26.1 Deprived 34.00 24.40
Not deprived 28.00 25.80
Skilled workers 16.1 Deprived 26.20 23.90
Not deprived 19.20 13.90
Nonskilled workers 18.0 Deprived 24.80 23.30
Not deprived 30.20 15.80
K. C.-K. Cheung et al.
 Table 4  (continued)
Demographic and socioeconomic characteristics Frequency (%) Income poor (%) Not income poor Chi square
(%)

Hourly pay
$35 or fewer 2.8 Deprived 5.70 2.00 364.92**
Not deprived 17.10 1.80
$36–$75 46.4 Deprived 81.10 65.10
Not deprived 61.20 40.20
$76–$99 22.6 Deprived 12.30 19.90
Not deprived 17.10 24.00
$100+ 28.2 Deprived 0.80 13.00
Not deprived 4.60 34.10
Low earnings
Material Deprivation and Working Poor in Hong Kong

Yes 6.9 Deprived 14.50 12.10 63.61**

Not deprived 14.40 5.00
No 93.1 Deprived 85.50 87.90
Not deprived 85.60 95.00

13

Table 4  (continued)
Demographic and socioeconomic characteristics Frequency (%) Income poor (%) Not income poor Chi square
(%)

13
Number of hours worked per week
44 h or fewer 13.1 Deprived 9.80 12.60 35.28**
Not deprived 9.90 13.60
45–49 h 35.3 Deprived 25.40 32.20
Not deprived 34.20 36.50
50–59 h 34.6 Deprived 32.80 34.00
Not deprived 35.50 34.70
60 + h 17.0 Deprived 32.00 21.20
Not deprived 20.40 15.20
Type of contract
Permanent 74.6 Deprived 81.20 82.10 20.79**
Not deprived 74.30 72.90
Temporary 25.4 Deprived 18.80 17.90
Not deprived 25.70 27.10
Have secondary employment
Yes 0.2 Deprived 0.00 0.20 0.7
Not deprived 0.00 0.20
No 99.8 Deprived 100.00 99.80
Not deprived 100.00 99.80
K. C.-K. Cheung et al.
 Table 4  (continued)
Demographic and socioeconomic characteristics Frequency (%) Income poor (%) Not income poor Chi square
(%)

Size of workplace
1–5 persons 4.2 Deprived 3.80 3.30 26.25**
Not deprived 7.20 4.10
6–10 persons 14.2 Deprived 22.70 18.70
Not deprived 16.80 12.70
More than 10 persons 81.7 Deprived 73.50 78.00
Not deprived 76.00 83.20
Household labor intensity
< 0.5 13.7 Deprived 51.00 25.10 576.07**
Not deprived 38.60 7.90
Material Deprivation and Working Poor in Hong Kong

≥ 0.5 and < 1 18.5 Deprived 37.20 26.50

Not deprived 27.90 15.40
≥ 1 67.7 Deprived 11.70 48.40
Not deprived 33.50 76.60
Number of workers
1 27.4 Deprived 84.80 43.70 558.14**
Not deprived 61.40 19.00
2 44.2 Deprived 14.50 43.50
Not deprived 30.50 46.90
3 +  28.4 Deprived 0.70 12.90
Not deprived 8.10 34.10

13

Table 4  (continued)
Demographic and socioeconomic characteristics Frequency (%) Income poor (%) Not income poor Chi square
(%)

13
Number of older persons (65 +)
0 80.2 Deprived 76.60 76.50 20.90**
Not deprived 87.30 80.50
1 18.0 Deprived 21.40 20.90
Not deprived 9.10 18.00
2+ 1.8 Deprived 2.10 2.70
Not deprived 3.60 1.50
Number of children
0 76.3 Deprived 35.90 56.60 492.66**
Not deprived 47.50 84.00
1 15.9 Deprived 35.20 26.40
Not deprived 26.30 12.20
2 6.6 Deprived 24.80 12.90
Not deprived 22.20 3.40
3+ 1.3 Deprived 4.10 4.10
Not deprived 4.00 0.40

*p < 0.05; **p < 0.01. Note that 2.0% of observations in the sample were missing personal employment income, 1.5% of observations were missing household income, 7.3%
of observations were missing household expenditures, and 19.8% of observations were missing household assets. The deprivation threshold was set at lacking at least 3 essen-
tial items
K. C.-K. Cheung et al.
Material Deprivation and Working Poor in Hong Kong

With regard to household characteristics, nearly half of the households that were
deprived poor had high labor intensity, compared with just 33.5% of the households that
were income poor. Also, 20.9% of households that were deprived poor had one elderly
person in the household, compared with only 9.1% of households that were income poor.
In addition, the deprivation approach enabled us to refine our understanding of the
income poverty by differentiating poor workers who were deprived from those who were
not. When we compared the profiles of those who were income poor with the profiles of
those who were doubly deprived, we found that among those who were doubly deprived,
more than 40% came from immigrant families, 32% worked more than 60 h per week, more
than half (51%) of the households had low labor intensity (below 0.5), and around 21% had
at least one older person in the household. The corresponding numbers were much lower
for those who were only income poor.

3.5 Risk Factors

Finally, we performed logistic regression analyses on the likelihood of a person to experi-

ence income poverty and materially deprivation, by using the independent variables listed
in Table  5. We checked the multicollinearity issue of the independent variables listed in
Table  5, and we found that all variance inflation factor (VIF) values were smaller than
1.7—well below the threshold of 10. As can be seen in Table 5, there were a number of
employment-related and household characteristics that were significantly correlated with
income poverty and with deprivation. Specifically, occupation, hourly pay, low earnings,
household labor intensity, number of workplace workers, number of older persons in the
household, and number of children in the household were each significantly associated
with income poverty and with deprivation. Compared with the households with no older
persons, those with one older person were less likely to report income poverty, while the
opposite was true for material deprivation.
Furthermore, the number of working hours was found to correlate with income poverty
but not with deprivation. We also found, by multivariate data analysis, that demographic
and socioeconomic characteristics, and employment-related variables, were correlated with
deprivation. Specifically, age, gender, marital status, education, immigrant status, receipt
of CSSA, and housing status were significantly associated with deprivation. In addition,
both the type of employment contract and the number of workers on the jobsite were also
significantly associated with deprivation.
As other studies on deprivation have found, this study demonstrated that poverty meas-
ured in terms of income produces very different results from that measured by deprivation
(Nolan and Whelan 2010; Saunders et al. 2014). The results of our study show that more
workers in Hong Kong experienced deprivation than income poverty. The deprivation
approach also identified a group of disadvantaged workers who were left out by the income
poverty approach.
Our analysis of the profiles of the deprived workers provided useful insight concerning
the needs of this group of disadvantaged workers. For instance, our results showed that
more young workers experienced deprivation than were identified as income poor. This
is very different from the situation of older people, who often experience income poverty
but not deprivation (Hick 2013). As the life cycle hypothesis of saving suggests (Mod-
igliani and Brumberg 1954), there is a need for young people to save in order to cushion
the major variations in income during the life cycle, for example the lack of income dur-
ing retirement. And the reduced capacity to spend might expand why more young workers

13

Table 5  Logistic regression analyses using income poverty and deprivation as the dependent variables
Odds ratio (95% CI)

Likelihood of income poverty Likelihood of deprivation

13
Univariate analysis Multivariate analysis Univariate analysis Multivariate analysis

Demographic and socioeconomic characteristics

Age
 18–34 1.04 (0.70–1.54) 1.02 (0.45–2.32) 1.20 (0.91–1.57) 2.06 (1.21–3.49)**
 35–44 2.72 (1.87–3.95)** 1.66 (0.84–3.28) 2.06 (1.56–2.71)** 1.55 (0.99–2.43)
 45–54 2.39 (1.65–3.47)** 1.70 (0.88–3.29) 1.75 (1.33–2.30)** 1.51 (0.99–2.30)
 55 + (ref) – – – –
Gender
 Male 1.72 (1.33–2.22)** 0.83 (0.48–1.43) 1.97 (1.62–2.40)** 1.75 (1.25–2.46)**
 Female (ref) – – – –
Marital status
 Never married (ref) – – – –
 Married 2.72 (2.04–3.64)** 0.73 (0.34–1.57) 1.37 (1.13–1.65)** 0.62 (0.40–0.99)*
 Divorced/separated/widowed 2.52 (1.31–4.84)** 1.21 (0.40–3.68) 0.99 (0.57–1.72) 0.48 (0.21–1.12)
Educational attainment
 Primary or below 2.03 (1.21–3.40)** 0.74 (0.28–1.95) 3.18 (2.08–4.87)** 1.96 (1.01–3.78)*
 Secondary 3.34 (2.19–5.09)** 0.87 (0.41–1.87) 4.73 (3.30–6.80)** 2.62 (1.57–4.38)**
Post-secondary or above (ref) – – – –
Immigrant status
 Born in Hong Kong (ref) – – – –
 Not born in Hong Kong 1.17 (0.92–1.50) 1.15 (0.74–1.77) 1.81 (1.51–2.17)** 1.63 (1.21–2.19)**
Receiving CSSA
 Yes 1.01 (0.29–3.53) 0.22 (0.03–1.41) 35.87 (11.33–113.60)** 38.46 (5.13–288.18)**
 No (ref) – – – –
K. C.-K. Cheung et al.
 Table 5  (continued)
Odds ratio (95% CI)

Likelihood of income poverty Likelihood of deprivation

Univariate analysis Multivariate analysis Univariate analysis Multivariate analysis

Housing status
 Public rental housing 1.44 (1.13–1.83)** 0.86 (0.56–1.32) 1.68 (1.40–2.01)** 1.21 (0.91–1.61)
 House ownership scheme 0.99 (0.70–1.39) 1.63 (0.80–3.31) 0.50 (0.36–0.69)** 0.47 (0.28–0.77)**
 Private housing (ref) – – – –
Employment-related characteristics
Occupation
 Professional/Managers/Associated – – – –
professional (ref)
Material Deprivation and Working Poor in Hong Kong

 Clerical workers 1.39 (0.83–2.32) 1.45 (0.56–3.77) 2.44 (1.70–3.49)** 1.30 (0.73–2.31)
 Sales workers 3.17 (2.04–4.93)** 1.76 (0.73–4.24) 2.93 (2.09–4.11)** 1.04 (0.61–1.78)
 Skilled workers 3.82 (2.41–6.06)** 2.01 (0.82–4.94) 4.94 (3.49–6.98)** 1.52 (0.88–2.62)
 Nonskilled workers 4.32 (2.76–6.76)** 2.59 (1.04–6.46)* 4.03 (2.85–5.70)** 1.92 (1.10–3.33)*
Hourly pay
 $35 or fewer 73.77 (32.22–168.92)** 354.90 (68.01–1851.93)** 3.15 (1.72–5.78)** 6.28 (2.06–19.12)**
 $36–$75 17.28 (8.40–35.57)** 38.66 (13.36–111.86)** 5.08 (3.82–6.76)** 5.13 (3.28–8.02)**
 $76–$99 6.96 (3.21–15.07)** 11.31 (3.84–33.34)** 2.37 (1.70–3.30)** 2.38 (1.48–3.80)**
 $100 + (ref) – – – –
Low earning
 Yes 2.64 (1.86–3.75)** 3.92 (1.98–7.75)** 2.48 (1.87–3.30)** 2.33 (1.48–3.66)**
 No (ref) – – – –
Number of hours worked per week
 44 h or fewer 0.48 (0.30–0.75)** 2.79 (1.24–6.24)* 0.59 (0.43–0.82)** 1.16 (0.68–1.98)
 45–49 0.54 (0.38–0.75)** 1.24 (0.72–2.15) 0.56 (0.43–0.72)** 0.94 (0.64–1.37)

13

Table 5  (continued)
Odds ratio (95% CI)

Likelihood of income poverty Likelihood of deprivation

13
Univariate analysis Multivariate analysis Univariate analysis Multivariate analysis

 50–59 0.63 (0.46–0.88)** 1.19 (0.71–2.02) 0.64 (0.50–0.82)** 0.87 (0.60–1.26)

 60 + (ref) – – – –
Type of contract
 Permanent (ref) – – – –
 Temporary 0.84 (0.63–1.12) 1.02 (0.63–1.65) 0.60 (0.48–0.75)** 0.55 (0.39–0.77)**
Having secondary employment
 Yes 0.00 (0.00–0.00) 0.00 (0.00–0.00) 0.76 (0.09–6.11) 0.56 (0.02–15.87)
 No (ref) – – – –
Size of workplace
 1–5 persons 1.62 (0.97–2.72) 0.98 (0.42–2.32) 0.85 (0.52–1.37) 0.55 (0.29–1.06)
 6–10 persons 1.56 (1.15–2.13)** 1.16 (0.70–1.92) 1.63 (1.29–2.06)** 1.42 (1.03–1.98)*
More than 10 persons (ref) – – – –
Household characteristics
Household labor intensity
 < 0.5 12.51 (9.34–16.74)** 5.67 (2.62–12.26)** 5.73 (4.58–7.15)** 2.53 (1.51–4.25)**
 ≥ 0.5 and < 1 5.61 (4.15–7.57)** 3.61 (1.94–6.71)** 3.30 (2.66–4.09)** 1.69 (1.16–2.47)**
 ≥ 1 (ref) – – – –
Number of workers
 1 19.14 (11.64–31.47)** 94.11 (18.80–471.00)** 7.78 (5.85–10.35)** 3.83 (2.29–6.41)**
 2 3.14 (1.86–5.31)** 10.92 (2.29–52.06)** 2.57 (1.93–3.43)** 1.75 (1.16–2.63)**
 3+ (ref) – – – –
Number of older persons (65+)
 Zero (ref) – – – –
K. C.-K. Cheung et al.
 Table 5  (continued)
Odds ratio (95% CI)

Likelihood of income poverty Likelihood of deprivation

Univariate analysis Multivariate analysis Univariate analysis Multivariate analysis

 1 0.75 (0.55–1.03) 0.45 (0.25–0.81)** 1.28 (1.04–1.59)* 1.65 (1.15–2.37)**

 2 1.79 (0.92–3.50) 0.84 (0.29–2.41) 1.66 (0.94–2.94) 1.32 (0.61–2.83)
Number of children
 Zero (ref) – – – –
 1 3.96 (3.02–5.18)** 1.84 (1.06–3.19)* 3.41 (2.76–4.21)** 2.36 (1.65–3.38)**
 2 9.00 (6.55–12.36)** 3.72 (1.96–7.06)** 5.28 (3.98–7.00)** 3.39 (2.17–5.30)**
 3+ 8.51 (4.42–16.37)** 1.30 (0.43–3.91) 10.45 (5.66–19.31)** 7.00 (2.72–17.99)**

*p < 0.05; **p < 0.01
Material Deprivation and Working Poor in Hong Kong

13
 K. C.-K. Cheung et al.

experienced deprivation despite not being income poor. On the contrary, pensioners can
maintain a certain level of consumption through dis-saving even when they have little or
no earnings. Among workers who have never married, a greater portion is deprived but
not income poor than is income poor but not deprived. This might be due to the fact that
the never-married group has more young workers who are not yet ready for marriage, but
it is also possible that deprivation reduces the desire to marry or postpones the decision
for marriage because of the costs associated with establishing a family (Coontz and Folbre
2002).
Our findings show that immigrants who are not burn in Hong Kong are more likely to
experience deprivation compare to their native counterpart. Existing studies already have
shown that immigrants are more likely to become income poor as a result of lack of eco-
nomic assimilation (Crowley et al. 2006; Lichter et al. 2005; Lam and Liu 2002). In addi-
tion to lack of financial resources to satisfy their material needs, social exclusion experi-
enced by immigrants also deprives them the basic needs for social participation and result
in social deprivation (Haisken-DeNew and Sinning 2007).
Similar to income poverty, we find that workers with low education attainment, working
in low-skill sectors and having temporary employment are also more likely to experienced
deprivation. This is not surprising given the income disparity and labour polarization as
a result of economic restructuring Hong Kong has gone through during the past few dec-
ades. We also found that among the income poor, there was a higher percentage of work-
ers with low household labor intensity and longer work hours among those who were also
deprived than among those who experienced only income poverty. This suggests that dep-
rivation creates greater pressure for workers to work longer hours to alleviate their material
deprivation.
Our results also show that CSSA recipients have a higher risk of deprivation than non-
recipients. It is not surprising given that Hong Kong a liberal welfare regime and social
welfare system is adopting a residual welfare model, in which the government will only
provide minimum protection to those in need when they are unable to do so by themselves
or their families (Lee 2005; Esping-Andersen 1990). However, a more important reason is
that CSSA is a cash-transfer program which is based on income poverty approach, and it is
not designed to address deprivation.
In addition to identifying the profile of the deprived workers, deprivation approach also
provided useful information about the things that people consider to be essential but are
deprived. In the case of workers in Hong Kong, many could not afford preventive medical
services. This information not only help the government to identify those who are in need,
but also enable government to target public resources on things that poor people could not
afford by themselves. This is important given that the dominant discourse on efficiency in
social policy formulation and the demand for fiscal austerity experienced in many devel-
oped economies has made governments favor targeting in their welfare policy formulations
(Gough et al. 1997).

4 Conclusion

This paper seeks to use the material deprivation approach to enhance our understanding
of the situation of the working poor in Hong Kong. The findings reinforce those of other
studies that have indicated deprivation offers an important complement to use of an income
poverty line in poverty analysis (Saunders et al. 2008; Crettaz 2015). Our results show that

13
Material Deprivation and Working Poor in Hong Kong

there was only moderate overlap between the workers being identified as poor using the
deprivation approach and those identified by using the income poverty line. In addition, the
groups of working poor who were identified by the deprivation approach had very different
profiles from the profiles of the workers who were merely income poor. The new informa-
tion on deprivation also enabled us to gain a more refined understanding of income poor
workers by separating those who were deprived from those who were not.
The results provide important policy implications for alleviating poverty among the
working poor in Hong Kong. First, the adequacy of a single income poverty line as an
official poverty measure needs to be re-evaluated. When the official poverty line was being
deliberated, the material deprivation approach was considered but was not included when
the government introduced the official poverty line in 2013 (Cheung and Chou 2017).
However, as our study has shown, the income poverty line alone is inadequate because
it overestimates the well-being of the working population. If antipoverty policy is based
solely on the assessment of income level, the policy likely will underestimate the public
resources necessary to meet the needs of disadvantaged workers. Deprivation also provides
an important supplement to the income poverty line by identifying disadvantaged workers
who have been neglected by using income poverty as the standard, and it can yield impor-
tant information regarding the kinds of commodities or services of which disadvantaged
workers are being deprived. Thus, by including material deprivation in the official poverty
measurements, the government should be able to target more accurately the needy groups
and provide the materials and services they need most.
In addition, the government could also devise a policy to help deprived workers to
enhance their self-sufficiency. For instance, many young workers are deprived even when
they are not income poor. To help young people to better manage their income, the govern-
ment could strengthen the policy initiative on educating the public on personal financial
management, an initiative that currently is underdeveloped (Hong Kong Council of Social
Service 2016). Similarly, the government should facilitate building community support
networks for new immigrants, because they are disproportionately prone to deprivation as
a result of social exclusion. In addition to the existing public social security system, such
community networks will provide an alternative support system to help immigrants alle-
viate their disadvantaged situation. Given the high percentage of workers who are both
income poor and materially deprived and are working long hours to meet their financial
needs, the government could consider introducing legislation to regulate the standard
weekly working hours and overtime payments, in order to protect the compensation for the
overtime work done by these laborers. All of these policies could help deprived workers
without increasing the financial burden on government welfare expenditures.

Funding This work was funded by the Research Grant Council, General Research Funding Scheme
(18401314).

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