Profile of working poor and risk factors

A recent study carried out by the Institute of Social Policy of the National Centre for Social Research examines the relationship between employment and poverty in Greece. The objectives of the study include identifying the groups of workers at greater risk of poverty, creating a profile for these groups, and identifying the factors that appear to increase the risk of poverty among employees.

A recent study was conducted by the Social Policy Institute of the National Centre for Social Research (Εθνικό Κέντρο Κοινωνικών Ερευνών, EKKE) and the findings were subsequently published in The social portrait of Greece 2006. The study is based on data from the EU Survey of Household Income and Living Conditions (EU-SILC) carried out in the spring of 2003 by the General Secretariat of the National Statistical Service of Greece (Εθνική Στατιστική Υπηρεσία της Ελλάδος, ESYE), with the participation of EKKE.

Definition of working poor

The analysis defines the ‘working poor’ as employed people over the age of 16 years who state that they have worked longer than seven months and whose equivalent available family income is less than 60% of the national average equivalent available income. Their occupational status is defined as their main activity for more than half of the number of months of the total period over which income was measured.

Effect of employment status on risk of poverty

Table 1 reveals that more poor people, at 31.4%, are found in the group of unemployed individuals than in any other category of occupational status. The data also highlight that there are higher numbers of poor people among other population groups outside the labour market than among employees.

On the other hand, almost one third of individuals under the poverty line are employed. The data also show that one worker in seven is poor.

Table 1: Risk of poverty for people aged over 16 years, by occupational status
Unemployed people are more likely to be poor than those in other occupational status categories. However, 32.5% of individuals under the poverty line are working.
Occupational status No. of individuals aged over 16 years No. of individuals under the poverty line Individuals under the poverty line (%) Poor individuals within the group (%)
Employed 3,935,041 558,767 32.50 14.20
Unemployed 431,695 135,659 7.90 31.42
Retired 1,736,075 460,309 26.80 26.51
Other non-active categories 2,256,947 563,572 32.80 24.97
Total 8,359,758 1,718,307 100 20.55

Source: The social portrait of Greece 2006

Effects of occupational and demographic factors

The study details the effect on poverty risk of a range of occupational and demographic characteristics; Table 2 below highlights a number of the conclusions drawn in the analysis.

  • Working men are at a 1.25 times greater risk of becoming poor than working women. Women’s labour market participation is low in relation to men’s; however, the proportion of highly educated women who enter employment is greater than that of men (see also Ketsetzopoulou and Κostaki, 2000).
  • The risk of poverty for people aged 55 years and older is 1.62 times greater than for those aged 25–54 years, and 1.28 times greater than for young people aged 16–24 years. A large number of older workers are self-employed in the agricultural sector and/or have a low level of education.
  • Employed people with low levels of education face an over two times greater risk of poverty than employed people in general. Although the protection afforded by a high level of education appears to decrease over time (see also Tinios and Zografakis, 2001), the effect of education remains decisive for avoiding the risk of poverty.
  • Self-employed people show a risk of poverty 3.7 times higher than that of employees and 1.6 times higher than that of workers as a whole. The greatest risk of poverty according to employment status is faced by assistants in family businesses. However, the data on the employment of self-employed people must be treated with caution due to the incidence of tax evasion.
  • People employed on a part-time basis are at a 2.4 times greater risk of poverty than those employed in full-time jobs. The poverty rate in this group also appears to be greater than that of retired and non-active individuals.
Table 2: Risk of poverty for employed people over 16 years of age, by occupational and demographic characteristics
This table outlines the risk of poverty for men and women in different age groups, according to educational level, type of employment, occupational status, length of working week and type of employment contract.
Occupational and demographic characteristics No. of individuals Individuals in the category (%) Poor individuals within the group (%)
Demographic characteristics
Sex
Men 2,406,544 61.16 15.39
Women 1,528,497 38.84 12.33
Age
Aged 16–24 years 316,670 8.05 16.30
Aged 25–54 years 3,109,678 79.03 12.90
Aged 55 years 508,693 12.93 20.85
Level of education
Low 1,182,249 30.04 28.87
Medium 1,889,717 48.02 9.98
High 863,074 21.93 3.34
Occupational characteristics
Type of employment
Full-time employment 3,625,683 92.14 12.77
Part-time employment 309,358 7.86 30.99
Occupational status
Employees 2,252,939 59.59 6.04
Self-employed 1,230,275 32.54 22.63
Assistants in family businesses 297,700 7.87 41.38
Length of working week
≤ 30 hours a week 3,410,515 90.20 13.86
> 30 hours a week 370,399 9.80 17.49
Type of employment contract
Permanent 1,749,807 77.67 3.70
Fixed-term or works contract or temporarily employed 503,132 22.33 14.17

Source: The social portrait of Greece 2006

Commentary

Apart from pensions, Greece has the lowest level of social benefits – such as family and housing benefits, disability benefits and other welfare benefits – compared with the remainder of the 15 countries (EU15) that were EU Member States before EU enlargement in 2004. Many poor people, including the working poor, are not eligible for welfare benefits because they do not belong to any of the categories which qualify for subsidies (Matsaganis et al, 2004).

With regard to active employment policies, total spending on the labour market in Greece amounts to only 0.9% of gross domestic product (GDP), which represents the lowest rate in the EU15. In fact, spending on active labour market policies amounts to just 0.25% of GDP, which also constitutes the lowest rate in the EU. Therefore, it is imperative that targeted policies should be designed to support the working poor. On the one hand, measures must be taken in relation to social welfare and, on the other hand, the statutory framework regulating labour market operations must be strengthened.

References

Ketsetzopoulou, M., ‘Working poor in Greece’, in Social portrait of Greece 2006, Athens, National Centre for Social Research, Institute of Social Policy, 2007.

Ketsetzopoulou, Μ, and Κostaki, Α., ‘Investigation of the influence of demographic characteristics of people of working age on their participation in employment’, in Review of Decentralisation, Local Government and Regional Development, Vol. 19, 2000, pp. 35–44.

Matsaganis, M., Ferrera, M., Capucha, L. and Moreno, L., ‘Policies against poverty in Southern Europe, in Petmesidou, M. and Papatheodorou, C. (eds.), Poverty and social exclusion, Athens, Exantas, 2004.

Tinios, P. and Zografakis, S., ‘The financial situation of the elderly population in Greece’, in Kikilias, E. et al (eds.), Demographic ageing, labour market and social protection: Trends, challenges and policies, Athens, National Labour Institute, 2001, pp. 81–104.

Sofia Lampousaki, INE-GSEE/ADEDY

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