1. Public policy and European society University of Castellanza
Session 3(b)
Poverty and social exclusion
9 March 2017

2. Outline Measuring poverty:
Key concepts: Poverty rate, poverty threshold, severe material deprivation
European or national standards?
Poverty and the crisis
Conclusion: welfare states matter

3. Poverty rates in the EU 2008 & 2015
At risk of poverty = income below 60% of the national equivalised income. Source: Employment and Social Developments in Europe 2016 derived from Chart 46

4. Severe Material Deprivation
Material deprivation covers indicators relating to economic
strain and durables. Severely materially deprived (SMD)
persons have living conditions severely constrained by a lack of
resources, i.e. they experience at least 4 out of the following 9
deprivations: they cannot afford i) to pay rent or utility bills, ii)
to keep their home warm enough, iii) to face unexpected
expenses, iv) to eat meat, fish or a protein equivalent every
second day, v) a week’s holiday away from home, vi) a car, vii)
a washing machine, viii) a colour TV or ix) a telephone.
Source: Employment and Social Developments in Europe 2016

5. Material deprivation 2008, 2012 & 2015
Severe material deprivation: at least 4 from list of 9 deprivations. From ESDE2016 Chart 48

6. Other poverty measures
Objective
Material deprivation
Cannot afford to: keep house warm, have holidays once a year; replace old furniture, new clothes; eat fish or meat every other day; have friends/family to dinner once a week (2 or more of 6)
Housing defects
Shortage of space, rot in windows/doors, damp/leaks, no indoor toilet (2 or more from 4)
Financial problems
In arrears with utility bills in last month; could not pay for food at any time in last year (1 of 2)
Subjective
Subjective economic strain
How easy to make ends meet (scale 1 to 6) (5 or higher)
Satisfaction with standard of living
(scale 1 to 10 – 1 very dissatisfied) (score 5 or lower)
Global life satisfaction
Overall satisfaction with life (1 very dissatisfied) (score 5 or lower)
From Fahey (2007)

7. National or European standards?
The median income in Romania is far less than the poverty threshold in most EU states
Source: Fahey (2007) using 2001 EU indicators

8. Europe 2020 European Platform Against Poverty
Aim to lift 20 million people out of poverty!
But what does this actually mean…?

9. Poverty in Europe2020 (1) At risk of poverty (2) Material deprivation
Percentage below national poverty threshold 60% of national median income
(2) Material deprivation
Number lacking 3 or more items on material deprivation index
(3) ‘Work poor’ households
Number of households where total amount of hours worked is less than 10 per adult member
So (1) is specific to each member state; (2) and (3) apply across EU.

10. European welfare states
Three (or perhaps four) worlds of welfare
Liberal
Universal
Conservative
Mediterranean
Despite variety everywhere inequality less than USA
Changes since c2000
Major change: Germany – erosion of insurance principle, more inequality, more working poor
Elsewhere NO big changes in system
BUT impact of crisis
Worst where welfare state incomplete (Greece!)
In most member states poverty still worse than before crisis
Conclusion
Traditional welfare state remains crucial: and the defining feature of Europe today especially compared to USA