The global economic crisis reversed the previous progress made by many EU countries in reducing relative poverty and material deprivation, according to a Belgian think tank report. Some of the poorest member states and most vulnerable groups have been affected the most.
The report attempts to get a better understanding of trends in poverty and inequality in Europe during the last decade, by analysing large-scale cross-country datasets, in particular the European Community Household Panel (ECHP) and the EU Statistics on Income and Living Conditions (EU-SILC).
- Trend analysis depends on the type of measure and timeframe used: but earlier trends for convergence in poverty levels have been reversed by the economic crisis, affecting some of the poorest member states and vulnerable groups the most. Lone-person households, lone parents, large families and children are confronted with the highest poverty rates in many countries.
- In contrast to expectations, there is little evidence so far for major changes in household arrangements as a result of the crisis. Poorer countries tend to have more households composed of couples with adult children and extended families. At the individual level, higher income is usually related to people living alone at earlier ages.
- Trends in income poverty differ strongly if poverty is measured with an EU-wide poverty line in contrast to trends in the standard at-risk-of-poverty indicator (which is based on each member state’s own median income). On average the at-risk-of poverty indicator did not change significantly between 2005 and 2009, and increased significantly between 2009 and 2011. In contrast, strong decreases in poverty measured with an EU-wide poverty line were found between 2005 and 2009, and stagnation between 2009 and 2011.
- Inequality in market incomes is the primary driver of differences in equivalent disposable household incomes. Pensions tend to increase inequalities, while other transfers and taxes tend to do the opposite. In terms of inequality changes, in some countries market income has a strong inequality-increasing effect, while in others nations the opposite is true. The effects of market income are mediated by taxes in many member states.
- Income differences between people with a different educational background and level of work intensity have strong influences on overall inequality levels in many countries, while age differences do not.
Source: Tim Goedeme and Bea Cantillon (eds.), Recent Trends in Poverty and Inequality in Europe: Facts and Figures, Herman Deleeck Centre for Social Policy, University of Antwerp