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Chronic material deprivation and long-term poverty in Europe in the pre-crisis period

Papadopoulos, Fotis, Tsakloglou, Panos, (2015), “Chronic material deprivation and long-term poverty in Europe in the pre-crisis period”, Improve, Discussion Paper No. 15/16, Νοέμβριος

In recent years research on the measurement of deprivation focuses increasingly on indices of multidimensional disadvantage rather than on more traditional uni-dimensional approaches of earlier studies that were focusing on income poverty. Further, the advent of panel survey data led to a large number of empirical studies that have been devoted to the investigation of dynamic aspects of poverty. Despite the availability of several longitudinal survey datasets that make it possible nowadays to use “smoothed” income distributions and identify persons who are poor in a longitudinal perspective, most empirical studies tend to use distributions of current income, thus ignoring aspects of inter-temporal transfers and income smoothing. The present paper examines the degree of overlap between people who experience chronic material deprivation and those who face long term income poverty (longitudinal poverty) in 22 European Union member states for the period 2005-2008, using the longitudinal data set of the European Union Statistics on Income and Living Conditions (EU-SILC) UDB 2008 version 4. In order to approximate chronic relative material deprivation we use a three-step index of chronic cumulative relative disadvantage. In the first step, population members deprived in three domains of static relative material deprivation are identified. In the second step, the extent of cumulative relative disadvantage of these individuals is examined and, in the final step, persons suffering from chronic cumulative relative disadvantage over the period 2005-2008 are identified, by aggregating the information on static cumulative relative disadvantage in each year covered. Further, we examine the overlap between chronic relative material deprivation and (smoothed) longitudinal poverty. The results reveal considerable differences across EU members regarding both the level and the structure of the population at high risk of chronic relative material deprivation and longitudinal poverty. Then, each country’s population is subdivided into mutually exhaustive and exclusive groups according to the characteristics of the population member, when the population is grouped according to seven alternative criteria: sex, age employment status and education level of the household’s reference person, age and education of the individual and household type. The results of the analysis reveal a number of qualitative similarities regarding the population groups that tend to be classified as “high risk” groups and quantitative differences regarding the “magnitude” of risk faced by these population groups, across EU member states. In almost all countries, though, under examination, lack of full employment by the individual or, especially, by the household’s reference person, low educational qualifications, being a member of a lone parent household or living in a household headed by a woman or by a very young or, to a lesser extent, an elderly person, lead to high risks of chronic relative material deprivation and longitudinal poverty.

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