The study of income and living conditions of the Slovakia’s households and its macroeconomic aspects Ladislav Kabat professor Faculty of Economics and Business The Pan European university Bratislava, Slovakia Improving the Quality of Public Services A Multinational Conference on Public Management June 28-29, 2011, Moscow

The study of income and living conditions of the Slovakia’s households and its macroeconomic aspects This paper follows two key goals –To present the core results of the EU SILC project with orientation on the socially vulnerable groups of population –To show the core macroeconomic indicators (GDP pc, GDP annual growth) within V4 countries in relation to level and size of the at-risk-of-poverty population

Some frequently presented data (in 1996) 800 million kcal pc per day 1,2 billion 1$ pc a day GOALS for % less

Some frequently presented data (in 2010)

RankingCountry% of population undernourished 1Congo Dem Rep75 2Eritrea66 3Burundi63 4Haiti58 5Sierra Leone46 6Zambia45 7Angola44 8Ethiopia44 9Central African Rep41 10Rwanda40 Where the undernourished people live?

Poverty and social exclusion is not only the developing countries phenomena

Poverty across EU27 in 2007 Data for Romania and Bulgaria estimated according EU SILC methodology

The alarming data on EU poverty and social exclusion continue with economic recession % citizens were at-risk-of-poverty –Over 80 million –2% more than in 2007 –Problematic situation in Latvia, Romania, Lithuania – low income + high income inequality 2010 – expected results even worse

Terminology, data, indicators of the EU SILC project Household as a unit of study Household income – sum of partial incomes Household size – all members of household EU SILC methodology approach –Equivalized size of household –Equivalized income per member of household –New indicators on the at-risk-of-poverty –List of mandatory compiled data (variables) Also material deprivation is studied

Calculation of the equivalized income per person /family member/

Cumulative growth in GDP over

Estimation of the at-risk-of-poverty population at-risk-of poverty population The core parameters are studied: Median and 0,6*Median

To analyze the role of social net Three subgroups of the surveyed households for Slovakia studied: 1.At-risk-of-poverty population before all social transfers 2.At-risk-of-poverty population before social transfers except the pension payments (survivors and old-age benefits) 3.At-risk-of-poverty population, when the disposable income of households is considered

EU SILC project results for with regional breakdown

EU SILC project results for Bratislava vs regions

The core statistical findings on income Permanent growth in average income for Slovakia Permanent growth in income differentiation between capital city and rest of Slovakia –Median value 30% higher than country's level –Median value 45% higher than some regional levels Growing inequality between top and bottom income deciles

Results with social consequences 11% of Slovak citizens - more than 595,000 people, were in 2009 at-risk-of-poverty after social transfers In terms of gender - women are relatively more at-risk- of poverty status (11.8%) than men (10.1%) The most vulnerable groups are children and youngsters till 17 years of age with 16,8 % of them at- risk-of-poverty, followed by women over 65 The long term unemployment

The unemployed population is highly vulnerable

Material deprivation rate Is proportion of population with enforced lack of at least three (or four) out of following items, which the household cannot afford:  to face unexpected expenses,  to go on one week annual holiday away from home,  to pay for arrears (mortgage or rent, utility bills or hire purchase installments),  to eat meal with meat, chicken or fish every second day,  to keep home adequately warm, or could not afford (even if household wanted to): a washing machine, a color TV, a telephone and a personal car.

Material deprivation data

The special findings on social situation Mostly disadvantaged social groups are influenced Gypsy population Low education labor force Handicapped citizens The material deprivation is felt much stronger, than the income poverty indicators show.

To solve the trap of poverty requires the long-term successful economic progress active involvement and support from government and regional authorities, solution of the long lasting unemployment, attention to the low educated labor force

Support to social net over period of economic boom

Slovakia achieved the highest economic growth among the EU27 over 2005 and 2009

At-risk-of population in Visegrad countries over

Statistics does not solve the problem The calculation of the social income deficit is needed

The presented statistical findings are not the final solution To improve: definition of poverty should be formulated as a multidimensional – income and material deprivation should be covered comprehensively methodology of estimation the share of the under poverty line population should be checked against the other information sources Calculation of the minimum social deficit needed to upgrade the socially excluded citizens should be presented to public (government, NGOs, universities)

Final conclusions  The high share of socially vulnerable population has not changed significantly during the period of strong economic growth in Slovakia  Similar development has been found also in other Visegrad countries  We did not prove the expected significant impact of economic growth on social position of population in these countries as declared by government and leading political parties  These findings should be studied in more details, taking into account longer time series on relevant statistical data as well as the broader set of explanatory variables.