Poverty and inequality in Europe – recent trends

There was a 'surprising' standstill  during the last decade in poverty reduction in Europe, despite generally positive political and economic circumstances, says a new report from an Antwerp-based think tank.

The researchers analyse trends found in large-scale cross-country datasets, in particular the European Community Household Panel (ECHP) and the European Union Statistics on Income and Living Conditions (EU-SILC).

Key findings

  • The unleashing of the global economic crisis after 2008 reversed the previous convergence in poverty levels while hitting some of the poorest member states and vulnerable groups the most. Single-person households, lone parents, large families and children were confronted with the highest poverty rates in many countries.
  • Trends in income poverty differ strongly according to the poverty measure used. On average, the at-risk-of poverty indicator did not change significantly between EU-SILC 2005 and 2009, and increased significantly between EU-SILC 2009 and 2011. In contrast, strong decreases were found in poverty measured with an EU-wide poverty line between EU-SILC 2005 and 2009, and stagnation between EU-SILC 2009 and 2011.
  • Inequality in market incomes is the primary driver of differences in equivalent disposable household incomes. It is also found that pensions tend to increase inequalities, while other transfers and taxes are prone to do the opposite.
  • In terms of inequality changes, in some countries market income had a strong inequality increasing effect, while in others nations the opposite was true. The effects of market income were 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, whereas age differences do not.
  • Contrary to expectations, there is little evidence thus 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.

Source: Tim Goedemé and Bea Cantillon (eds), Recent Trends in Poverty and Inequality in Europe: Facts and Figures, Centre for Social Policy (Antwerp University)

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