Income poverty in the European Union
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Eurostat data on EU income poverty
A number of Eurostat publications on poverty issues have been issued since 2000. Apart from In-Work Poverty (362Kb PDF) (2005), these relate mainly to poverty issues in general and devote only minor attention to the working poor problem. Nevertheless, most of these publications provide relevant background and contextual information on income poverty and will be used in this report where appropriate.
Definitions of poverty
Income poverty is only one part of the overall concept of poverty – or deprivation as it is also called. Poverty can be defined as a condition in which a person is deprived of the essentials for a minimum standard of well-being and life. Therefore, poverty does not only refer to material resources, such as money, food or housing, but also to social resources, such as access to education and healthcare or meaningful relations with other people. Poverty may be defined either in absolute or in relative terms; relative poverty refers to a deprivation in relation to the conditions prevailing in a country.
The indicators most frequently used by Eurostat in the field of poverty are based on a relative and monetary approach to poverty. This means that the indicators mainly focus on income, whereby poverty is defined in relation to the distribution of income within each country. The idea behind concentrating on relative income poverty is because minimal acceptable standards usually differ between societies according to their general level of prosperity: someone regarded as poor in a rich developed country might be regarded as rich in a poor developing country.
Definitions of poverty thresholds are always conventional. Eurostat’s definition of poverty risk refers to individuals living in households where the equivalised income is below the threshold of 60% of the national equivalised median income. The key advantage of using the median is that it is not influenced by extreme values – either extremely low or high incomes.
The results presented below derive from different Eurostat publications. As highlighted earlier, between 2001 (end of ECHP) and 2005 (EU-SILC running in EU25), Eurostat had to rely on the following data sources:
• the last wave of the ECHP;
• EU-SILC data from those six countries which had already started the new programme in 2003;
• and/or national sources for the 19 other countries of the EU25 that did not launch EU-SILC in 2003.
From a methodological point of view, the national sources represent the most problematic data source among the three sources used. This is because they represent different data sources which had to be harmonised in order to ensure a maximum comparability between definitions and concepts used in the different countries. The following table outlines the national sources used.
|CY||Household Budget Survey (Family Expenditure Survey)|
|DE||GSOEP (Socio-Economic Panel)|
|EE||Household Budget Survey (Leibkonna Eelarve Uuring)|
|ES||Household Budget Survey (Encuesta Continua de Presupuestos Familiares, ECPF)|
|FI||Income Distribution Survey (Tulonjakotilasto)|
|FR||Tax Survey (Enquête Revenus Fiscaux)|
|HU||Household Budget Survey (Háztartási Költségvetési Felvétel)|
|LT||Household Budget Survey (Namų ūkių biudžetų tyrimas)|
|LV||Household Budget Survey (Majsaimniecibu Budzetu Petijums)|
|MT||Household Budget Survey|
|NL||Income Panel Survey (Inkomenspanelonderzoek)|
|PL||Household Budget Survey (Badania Budżetów Gospodarstw Domowych)|
|PT||Reduced ECHP sample. Only limited indicators are available (at-risk-of-poverty rates before and after transfers at level of total population, share ratio S80/S20)|
|SE||Survey of Living Conditions (Undersökning av levnadsförhållanden, ULF)|
|SI||Household Budget Survey (Anketa o porabi v gospodinjstvih)|
|UK||Household Budget Survey (Family Resources Survey)|
As mentioned above, Eurostat’s definition of poverty risk refers to individuals living in households where the equivalised income is below the threshold of 60% of the national equivalised median income. Equivalised income is defined as the household’s total income divided by its equivalent size, to take account of the size and composition of the household, and is attributed to each household member. The total household income is divided by its equivalent size using the so-called modified OECD equivalence scale, a revised version of a scale advocated by the Organisation for Economic Cooperation and Development (OECD). This scale gives a weight of 1.0 to the first adult, 0.5 to any other household member aged 14 years and over, and 0.3 to each child.
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