Income poverty dynamics in the European Union

Two researchers in Italy have published a paper that provides an updated analysis of income poverty in European Union (EU) countries up to 2007 and covers the newest member states. The analysis focuses on the main determinants of households falling into or rising out of income poverty, and finds that events related to the labour market are the most influential because of both their frequency and their impact.

The paper provides a broad-brush picture of poverty dynamics for individuals living in the enlarged EU, using data from the European Union Statistics on Income and Living Conditions. Previous studies had examined only the ‘old’ EU 15 member states, and were more than 10 years old.

The analysis identifies which types of event are associated with the probability of entering – and exiting from – poverty.

Key points

  • The highest poverty entry rates are found in the ‘Anglo-Saxon’ (UK and Ireland) and southern country groups.
  • Movements into and out of poverty are generally more associated with economic than with demographic events. Events significantly related to the chances of entering and exiting from poverty include changes in the total number of labour income earners, distance from the poverty line, and household head education.
  • The reasons behind these divergences in poverty mobility across EU countries are not always obvious, and further research is needed to understand them.

The full paper (Veronica Polin and Michele Raitano, Poverty Dynamics in Clusters of European Union Countries: Related Events and Main Determinants, Working Paper 10, Department of Economics, University of Verona) is available on the University of Verona website.