1. Poverty Research and Poverty Measurement in Finland 2nd Peter Townsend Memorial Conference 22.1.2011 Bristol Veli-Matti Ritakallio University of Turku, Finland

2. Short history of Finnish poverty (research) 1960s to mid-1980s welfare optimism –Almost no poverty research –Urbanisation, industrialisation, transition to dual earner family model, rapid continuous economic growth and strong growth of the welfare state –Old forms of poverty were disappearing (large families in small farms and old-aged with extremely low pensions) Early 1980s: new's from Great Britain and Sweden –Poverty exists also in affluent societies –New ways to conceptualitze poverty (Peter Townsend's 1979 contribution was well known) –Social exclusion, particularly men, urban poverty

3. Short history of Finnish poverty (research) 2 In 1990s single contributions by social scientists: –Matti Heikkilä (1990) Poverty and Deprivation in a Welfare State. A Study of Poverty and Welfare Deficits in Finland (income (fixed threshold)) –Veli-Matti Ritakallio “Poverty in Finland” (1994) Poverty in Finland. A Study of Effects of Income Transfers (income (50% threshold), expenditure (50% threshold) and social assistance approaches) Since 2000 more activity, because of EU OMC?! Statistics Finland (semi-official (European) poverty rates): –Low income (poverty) rates 50% poverty line since 1996 –Low income (poverty) rates 60% and 50% poverty line since 2001

4. Early 1990s economic downturn and poverty (measurement) In 1995 professor Olli Kangas and Veli-Matti Ritakallio started Finnish poverty and social exclusion survey project, which still continues. During the project has been done in Finnish conditions large survey data collections at 1995, 2000, 2005 and 2010. This allows reliable analysis of trends of poverty in Finland. Surveys have approached multidimensionally poverty related issues. Starting point of the project was the strange results produced by income poverty measures during the 1990s economic crisis. See next figure

5. Gini-coefficient, GDP in Finland 1990-2009 tens of billons €, 2009 prices, Income poverty (60% Md Poverty line), Basic unemployment allowance/labour market subsidy beneficiaries during the year % of persons aged 17-64, Social assistance recipients (during a calendar year) % of population Income differentials, GDP, Low income poverty, Unemployed with minimum compensation and Social assistance recipiency in Finland 1990-1995 Gini GDP Income pov. Unempl with min compensation Soc.ass. +bankruptcies, overindebtedness, soup-kitchens etc.

6. Four national representative surveys 1995, 2000, 2005 and 2010 To study poverty in Finland by several parallel measures University of Turku Effective sample sizes and response rates: 1995185865% 2000240061% 2005239160% 2010206852%

7. Parallel indicators of poverty RELINC: Relative income poverty: current oecd equivalent self- reported DPI is less than 50% of the national median income SCARCITY: Economic hardship: respondent’s subjective evaluation of problems in making ends met (feeling that its highly difficult to make ends meet) together with continuous troubles in paying bills (rent etc.). CONSE: Cumulative deprivation: all those who lack at least three commodities regarded as necessary by the majority of the whole population are poor. DEBTS: Subjectively felt overindebtedness SOC.ASS.: Recipiency of last resort social assistance CUMULATIVE/RELIABLE/DUAL CONDITION: Poor according to at least two of the five indicators presented above.

8. Poverty by Different Indicators in Finland 1995, 2000, 2005 and 2010, %

9. Poverty by Different Indicators in Finland 1995, 2000, 2005 and 2010, %

10. Gini GDP Income pov. Unempl with min compensation Soc.ass. Gini-coefficient, GDP in Finland 1990-2009 tens of billons €, 2009 prices, Income poverty (60% Md Poverty line), Basic unemployment allowance/labour market subsidy beneficiaries during the year % of persons aged 17-64, Social assistance recipients (during a calendar year) % of population Income differentials, GDP, Low income poverty, Unemployed with minimum compensation and Social assistance recipiency in Finland 1995-2009

11. Poverty risks by the source of income 2010, % Indicator: Reliable poverty

12. Poverty profile by the source of income 2010, % (Income support 40% of all poor)

13. Poverty risks by household type in Finland 2010, %

14. Poverty risk by age 2010, %

15. Conclusions so far Huge increase in income differentials Extent of poverty 1990-2010 has rather decreased than increased Who are in the highest risk? –Long-term unemployed –Single parent families –Those relying on minimum social security –Students –Renters Employed and those on earnings-related benefits are not likely to live in poverty Latest 2008 recession didn’t hit Finns very badly Relative position of those on minimum benefits has deteriorated (next slide!)

16. Basic amount of social assistance 1991-2009 vs. 60% Md poverty line, in euros (2009 prices) Pov. line Soc. ass. 14€/day!

17. Income poverty (60%) and Economic Hardship (Great difficulties to make ends meet) in European countries at 2005, % Source: EU-SILC, own analysis

18. Peter Townsend 1979, p. 31 "Individuals, families and groups in the population can be said to be in poverty when they lack the resources to obtain the amenities which are customary, or are at least widely encouraced or approved, in the societies to which they belong. Their resources are so seriously below those commanded by the average individual or family that they are, in effect, excluded from ordinary living patterns, customs and activities."

19. Several choices and choices matter! How to operationalize the following: –Lack the resources Incomes Enforced expenditures (housing costs, health care costs, child care costs etc.)? Equivalence scale (oecd, mod-oecd, square root, concensual)?! –Resources are so seriously below the average 40%/50%/60%?! –Societies to which they belong Nation state! Province they live?! EU?! Age standardizations?! –Excluded from ordinary living patterns, customs and activities Cumulative enforced lack of necessities (how to define?) –Dual/triple condition: Low economic resources+ subjective statement+ (cumulative) lack of necessities?

20. Thank you! 19.5.2004 Turku New's