“Mobility into and out of poverty in 14 European countries” Author-Presenter: Eirini Andriopoulou ATHENS UNIVERSITY OF ECONOMICS AND BUSINESS DEPARTMENT OF INTERNATIONAL AND EUROPEAN ECONOMIC STUDIES paper presented in EPUNet 2006 Conference 9th of May 2006

Research Questions Do poverty exit rates differ among the EU Member-States and how much do they depend on the duration of poverty spells? Unconditional and conditional exit probabilities To what extent poverty is recurrent? Re-entry rates to poverty In which income group do the poor find themselves when they escape poverty and what is the evolution of their income in the years that follow the poverty spell? Mobility matrices What are the main events (income, demographic) associated with transitions into and out of poverty? Event analysis

Data User’s Database (UDB) of the European Community Household Panel (ECHP) produced by the Living Conditions Unit (E-2) of the Social and Regional Statistics and Geographical Information System Directorate (E) of EUROSTAT in Luxembourg. Time frame: (8 waves) Countries: 14 countries (Sweden excluded, Data from national panels for Germany, Luxembourg and the UK)

Definitions  Income Reconstruction of the household income, so as to match the timeframe of the income and the other ECHP variables  Poverty line 60% of the national median equivalised household income per capita Using: Modified OECD Scale Deflated incomes in ppp Cross-sectional weight Grossing-up factor for EU totals

Source: ECHP UDB (Dec nd issue)

Time dimensions of poverty Duration Recurrence (Handout: Table 1) Spell Analysis Four poverty profiles:  Transient: only once and for one year  “Mid-term” poor: only once for two years  Recurrent: at least twice poor but no more than 2 years  Permanent poor: 3yrs+

CountryAnnual exit rateAnnual entry rate A B D DK E EL F FIN I IRL L NL P UK _EU Total number of individuals at risk of exiting/entering poverty140,831706,259 Unconditional entry and exit rates Source: ECHP UDB (Dec nd issue)

Conditional to the duration of poverty entry probabilities (Handout: Table 2) Re-entry rates to poverty (Handout: Table 3) Conditional probabilities

In which income group do the poor end-up when they escape poverty? Income Group Country60%-79%80%-99%100%+Total Number of spell endings A ,801 B ,931 D ,802 DK ,285 E ,673 EL ,008 F ,072 FIN ,043 I ,840 IRL ,583 L ,004 NL ,592 P ,082 UK ,156 _EU ,872

Mobility around the poverty line and among income groups Mobility Indices Mobility Matrices (Handout: Table 4)

Event analysis for poverty spell beginnings and endings The Algorithm of the event analysis Five step analysis (Handout: Figure 1) Equivalised Household Income per Capita

Results Poverty entries (2 categories of events) (Handout: Table 5) Poverty entries (3 categories of events) (Handout: Table 6) Poverty exits (2 categories of events) (Handout: Table 7) Poverty exits (3 categories of events) (Handout: Table 8)

Conclusions 1.Income events more associated both with entries and exits than demographic events. 2. Demographic events are more important in Finland, Denmark, UK and Luxembourg, while income events are stronger in Mediterranean countries. 3.When adding employment events the importance of pure income events declines in many cases more than 20%. 4.Employment events seem to be more related to poverty exits than unemployment events with poverty entries.

Limitations of the Event Analysis Does not allow for multiple events to happen at the same time: identifies only one main event associated with spell beginning/ending Controls only for changes e.g. in social benefits not for level Focuses on micro level It is not a substitute for the multivariate analysis but it supplements it very well

Thank you very much for your presence and attention! Eirini Andriopoulou

Additional – Emergency Tables

Data – Country participation COUNTRIES FULL ECHP DATA FORMAT ECHP DATA FORMAT DERIVED FROM NATIONAL SURVEYS Belgium and Netherlands Denmark, France, Greece, Ireland, Italy, Spain, Portugal Austria Finland Germany (GSOEP) Luxembourg (PSELL) United Kingdom (BHPS) Sweden (SLCS) (Cross Sectional Data Only) Source: ECHP UDB (Dec nd issue) (EPUNet 2004a, p. 1)

Year of Survey CountryWave 1Wave 2Wave 3Wave 4Wave 5Wave 6Wave 7Wave 8 A B D (SOEP) DK E EL F FIN I IRL L (PSELL) NL P UK (BHPS) Mean Mean dif Source: ECHP UDB (Dec nd issue) Data – Attrition rates

Source: ECHP UDB (Dec nd issue) Data – Cases available for analysis Year of Survey Country Total A 9,5799,2498,7338,1847,7397,1696,87357,526 B9,1498,8398,3987,9167,4086,9706,5605,98561,225 D16,28416,68216,30415,94215,25114,86014,34013,969123,632 DK7,6937,2006,5686,2045,6665,4275,2225,13649,116 E23,02520,70819,71218,16716,72816,22215,04814,320143,930 EL16,32115,30914,38413,49112,29811,65411,38311,244106,084 F18,91617,40816,98515,75814,84914,10913,36813,263124,656 FIN 11,21410,8889,9739,5877,5527,49856,712 I21,93421,75721,50620,07419,31018,62117,60216,162156,966 IRL14,58512,57710,8879,9529,0007,7216,2765,56576,563 L 8,1926,8057,0936,6476,5856,1846,30647,812 NL13,02912,79112,89712,58412,37312,51712,44612,079100,716 P14,70614,82614,62314,42814,08513,79813,48113,285113,232 UK12,84412,50812,54712,39612,43212,28112,18612,05199,245 Total168,486178,376182,079173,626164,204158,091148,817143,7361,317,415

Poverty indices (year: 2000) Ctry Headcount ratioCtryPoverty gapCtry Square poverty gapCtry Modified Sen index NL10.39L2.22L0.68L4.29 D11.37D2.52FIN0.95FIN4.87 DK11.47FIN2.52D0.98D4.89 FIN11.57DK2.94DK1.19DK5.67 L12.01NL2.98B1.34NL5.80 A12.24A3.07A1.39A5.95 B14.44B3.19NL1.49B6.14 F15.71F3.93F1.70F7.52 UK17.18UK5.03IRL2.01UK9.56 _EU17.77IRL5.24UK2.34IRL9.80 E19.46_EU5.25_EU2.47_EU9.97 I19.54P5.75P2.67P10.85 P20.09E5.83E2.87E11.02 EL20.33I6.33EL2.93I11.92 IRL20.58EL6.36I3.16EL11.93 Source: ECHP UDB (Dec nd issue)

Age Groups Ctry A B D DK E EL F FIN I IRL L NL P UK _EU Headcount ratio by age groups Source: ECHP UDB (Dec nd issue)

Poor’s income distribution Income Group Country0%-19%20%-39%40%-59%Total Number of poor A ,024 B ,154 D ,947 DK ,625 E ,136 EL ,494 F ,724 FIN ,643 I ,052 IRL ,432 L ,159 NL ,718 P ,848 UK ,311 _EU ,267

Household Head by Gender CountrymalefemaleTotal A B D DK E EL F FIN I IRL L NL P UK _EU

Distribution of poor population to household types Household Type Ctry Total A B D DK E EL F FIN I IRL L NL P UK _EU