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

2. 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

3. 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)

4. Definitions
Income Reconstruction of the household income, so as to match the timeframe of the income and the other ECHP variables
Poverty line % 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

6. Source: ECHP UDB (Dec 2003 - 2nd issue)

7. Time dimensions of poverty
Duration
Recurrence
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+
(Handout: Table 1)

8. Unconditional entry and exit rates
Country
Annual exit rate
Annual entry rate A
38.07
5.82 B
36.86
6.48 D
38.24
5.19 DK
44.49
6.22 E
39.09
9.54 EL
32.10
9.39 F
32.60
6.55
FIN
33.01
5.60 I
33.75
8.01
IRL
31.45
9.16 L
30.37
4.23 NL
46.24
5.07 P
29.69
7.80 UK
34.13
7.95
_EU
35.27
6.99
Total number of individuals at risk of exiting/entering poverty
140,831
706,259
Source: ECHP UDB (Dec nd issue)

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

10. In which income group do the poor end-up when they escape poverty?
 Country
60%-79%
80%-99%
100%+
Total
Number of spell endings A
55.68
21.20
23.12
100.00
1,801 B
62.02
17.62
20.36
1,931 D
60.77
20.62
18.61
3,802 DK
57.76
22.77
19.47
1,285 E
51.22
25.06
23.72
6,673 EL
51.03
25.26
5,008 F
67.07
19.14
13.79
4,072
FIN
62.92
20.57
16.51
1,043 I
51.02
24.34
24.64
6,840
IRL
66.02
19.06
14.92
2,583 L
75.42
16.56
8.01
1,004 NL
57.26
22.08
20.65
2,592 P
58.52
22.52
18.96
5,082 UK
60.40
19.34
20.26
4,156
_EU
58.02
21.67
20.31
47,872

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

12. 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

13. 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)

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

15. 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

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

18. Additional – Emergency Tables

19. 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)

20. Data – Attrition rates Year of Survey Country Wave 1 Wave 2 Wave 3
   
Year of Survey
Country
Wave 1
Wave 2
Wave 3
Wave 4
Wave 5
Wave 6
Wave 7
Wave 8 A
0.00
9.64
18.72
26.29
32.82
39.23
43.73 B
7.80
15.34
22.85
30.17
36.97
42.37
48.54
D (SOEP)
5.76
11.29
16.35
22.14
26.77
31.38
35.38 DK
11.20
23.55
33.54
42.53
48.25
52.44
54.87 E
12.33
20.63
29.77
37.45
42.38
47.93
52.05 EL
9.08
16.92
24.20
32.91
40.21
43.86
45.97 F
10.35
16.76
25.49
32.52
37.78
43.39
46.17
FIN
8.33
20.51
28.41
47.76
50.67 I
4.97
9.56
18.22
25.08
30.40
36.10
42.71
IRL
15.97
29.19
36.96
44.08
52.65
62.59
67.48
L (PSELL)
19.47
26.90
33.39
38.90
43.99
47.78 NL
8.30
13.63
20.56
27.79
34.35
42.10
48.94 P
4.32
9.91
15.06
20.31
24.68
28.68
31.80
UK (BHPS)
8.69
13.13
16.79
20.27
23.72
27.30
30.62
Mean
8.53
15.13
23.37
31.30
37.51
44.66
48.38
Mean dif
6.60
8.24
7.93
6.21
7.16
3.72
Source: ECHP UDB (Dec nd issue)

21. Data – Cases available for analysis
Year of Survey
Country
1994
1995
1996
1997
1998
1999
2000
2001
Total A
9,579
9,249
8,733
8,184
7,739
7,169
6,873
57,526 B
9,149
8,839
8,398
7,916
7,408
6,970
6,560
5,985
61,225 D
16,284
16,682
16,304
15,942
15,251
14,860
14,340
13,969
123,632 DK
7,693
7,200
6,568
6,204
5,666
5,427
5,222
5,136
49,116 E
23,025
20,708
19,712
18,167
16,728
16,222
15,048
14,320
143,930 EL
16,321
15,309
14,384
13,491
12,298
11,654
11,383
11,244
106,084 F
18,916
17,408
16,985
15,758
14,849
14,109
13,368
13,263
124,656
FIN
11,214
10,888
9,973
9,587
7,552
7,498
56,712 I
21,934
21,757
21,506
20,074
19,310
18,621
17,602
16,162
156,966
IRL
14,585
12,577
10,887
9,952
9,000
7,721
6,276
5,565
76,563 L
8,192
6,805
7,093
6,647
6,585
6,184
6,306
47,812 NL
13,029
12,791
12,897
12,584
12,373
12,517
12,446
12,079
100,716 P
14,706
14,826
14,623
14,428
14,085
13,798
13,481
13,285
113,232 UK
12,844
12,508
12,547
12,396
12,432
12,281
12,186
12,051
99,245
168,486
178,376
182,079
173,626
164,204
158,091
148,817
143,736
1,317,415
Source: ECHP UDB (Dec nd issue)

22. Poverty indices (year: 2000)
Ctry
Headcount
ratio
Poverty gap
Square
poverty
gap
Modified
Sen
index NL
10.39 L
2.22
0.68
4.29 D
11.37
2.52
FIN
0.95
4.87 DK
11.47
0.98
4.89
11.57
2.94
1.19
5.67
12.01
2.98 B
1.34
5.80 A
12.24
3.07
1.39
5.95
14.44
3.19
1.49
6.14 F
15.71
3.93
1.70
7.52 UK
17.18
5.03
IRL
2.01
9.56
_EU
17.77
5.24
2.34
9.80 E
19.46
5.25
2.47
9.97 I
19.54 P
5.75
2.67
10.85
20.09
5.83
2.87
11.02 EL
20.33
6.33
2.93
11.92
20.58
6.36
3.16
11.93
Source: ECHP UDB (Dec nd issue)

23. Headcount ratio by age groups
Age Groups
Ctry
0-15
16-64
65+ A
12.53
9.17
25.34 B
11.31
11.86
28.41 D
12.94
10.45
13.53 DK
6.19
8.58
32.30 E
25.70
16.78
24.18 EL
17.72
16.94
33.84 F
17.41
13.76
21.43
FIN
5.34
10.15
26.20 I
25.22
18.44
18.58
IRL
22.00
15.92
46.01 L
16.96
11.35
8.55 NL
14.14
10.42
4.26 P
26.84
15.57
31.87 UK
22.66
13.07
25.24
_EU
20.73
15.73
22.68
Source: ECHP UDB (Dec nd issue)

24. Poor’s income distribution
Income Group
Country
0%-19%
20%-39%
40%-59%
Total
Number of poor A
7.34
18.84
73.82
100.00
2,024 B
6.01
15.76
78.23
2,154 D
6.05
18.22
75.72
3,947 DK
4.86
19.93
75.22
1,625 E
9.54
22.36
68.11
7,136 EL
10.56
21.34
5,494 F
6.46
17.74
75.79
4,724
FIN
9.84
17.79
72.37
1,643 I
9.97
22.88
67.15
7,052
IRL
3.40
16.78
79.82
3,432 L
2.67
10.81
86.52
1,159 NL
14.90
17.87
67.23
2,718 P
6.13
19.33
74.53
4,848 UK
7.95
22.33
69.72
4,311
_EU
7.96
20.28
71.76
52,267

25. Household Head by Gender
Country
male
female
Total A
50.89
49.11
100.00 B
72.00
28.00 D
60.48
39.52 DK
58.86
41.14 E
80.69
19.31 EL
76.16
23.84 F
75.41
24.59
FIN
57.43
42.57 I
75.43
24.57
IRL
71.54
28.46 L
69.87
30.13 NL
68.06
31.94 P
69.30
30.70 UK
56.09
43.91
_EU
67.06
32.94

26. Distribution of poor population to household types
Household Type
Ctry 1 2 3 4 5 6
Total A
21.16
14.98
11.60
5.17
26.87
20.23
100.00 B
15.08
22.81
11.15
9.34
31.67
9.95 D
24.27
16.07
11.70
10.49
28.44
9.02 DK
30.55
34.97
9.48
3.39
13.92
7.69 E
3.40
11.95
13.84
3.27
36.27
31.27 EL
23.97
18.14
2.06
25.76
21.05 F
14.06
17.10
10.89
9.08
36.06
12.83
FIN
45.60
14.88
8.37
4.13
21.27
5.75 I
8.19
8.09
17.62
3.48
34.52
28.11
IRL
16.00
5.63
7.45
9.59
43.41
17.92 L
9.23
10.87
10.17
8.14
45.42
16.17 NL
15.98
10.83
10.98
13.32
35.91
12.98 P
8.20
16.88
15.59
4.53
31.49
23.31 UK
18.82
15.07
8.96
16.58
32.85
7.72
_EU
14.52
14.44
12.74
8.57
32.80
16.94