Europe 2020 indicators - poverty and social exclusion

Data from March 2017. Most recent data: Further Eurostat information, Main tables. Planned article update: May 2018.

This article is part of a set of statistical articles on the Europe 2020 strategy. It provides recent findings on poverty and social inclusion in the European Union (EU).

The Europe 2020 strategy is the EU’s agenda for growth and jobs for the current decade. It emphasises smart, sustainable and inclusive growth as a way to strengthen the EU economy and prepare its structure for the challenges of the next decade.

Poverty reduction is a key policy component of the Europe 2020 strategy. By setting a poverty target, the EU put social concerns on an equal footing with economic objectives. Achieving the target to reduce the number of people at risk of poverty and social exclusion will depend on successful implementation of other priorities of the Europe 2020 strategy, such as providing better opportunities for employment and education.

Europe 2020 strategy target on the risk of poverty and social exclusion

The Europe 2020 strategy has set the target of ‘lifting at least 20 million people out of the risk of poverty and social exclusion’ by 2020 compared to the year 2008 [1].

This article analyses the EU’s progress in reducing poverty, which is monitored through the headline indicator ‘people at risk of poverty or social exclusion’. It also presents the three sub-indicators that constitute the headline indicator: monetary poverty, severe material deprivation and very low work intensity. The aim of including other components of social exclusion alongside monetary poverty is to show that other factors in addition to low income can also lead to severe and chronic disadvantages and that these are all closely intertwined. This article also includes breakdowns of the headline indicator by sex, age, labour status, household type, educational level, parents’ educational level, country of birth and degree of urbanisation of residential municipality to reveal a broader picture and to show the drivers behind the changes observed.

Key messages

  • Almost every fourth person in the EU experienced at least one of the three forms of poverty or social exclusion.
  • Monetary poverty is the most widespread form of poverty, affecting 17.3 % of EU citizens in 2015. Severe material deprivation and very low work intensity follow, affecting 8.1 % of the EU population and 10.6 % of EU citizens aged 0-59, respectively.
  • Social transfers decreased monetary poverty in the EU by 8.7 percentage points in 2015.
  • On average, monetary poverty is lower in the EU at 17.3 % than in many other advanced economies.
  • The share of women suffering from poverty or social exclusion was 1.4 percentage points higher than the corresponding share of men in 2015.
  • 31.3 % of young people aged 18 to 24 and 26.9 % of those aged less than 18 were at risk of poverty or social exclusion in 2015. At 17.4 %, this rate was considerably lower among the elderly aged 65 or over.
  • Of all groups examined based on their employment status, the unemployed faced the greatest risk of poverty or social exclusion, at 66.6 % in 2015.
  • Almost 50 % of all single parents were at risk of poverty or social inclusion in 2015. This was double the average and higher than for any other household type analysed.
  • 34.7 % of adults with at most lower secondary educational attainment were at risk of poverty or social exclusion in 2015.
  • 65.6 % of children of parents with at most pre-primary and lower secondary education were at risk.
  • In 2015, 40.2 % of adults born in a country outside the EU were at risk of poverty or social exclusion.
  • EU citizens in rural areas were on average slightly more likely to live in poverty or social exclusion than those living in urban areas (25.5 % compared with 24.0 %) in 2015.
Table 1: Indicators presented in this article

Main statistical findings

How do poverty and social exclusion affect Europe?

The rate of poverty and social exclusion has returned to a level similar to 2008 at the onset of the economic crisis, yet the EU 2020 target remains unattained

Figure 1: People at risk of poverty or social exclusion, EU-27 and EU-28, 2005-2015
(million people)
Source: Eurostat online data code (t2020_50)

In 2015, almost 119 million people, or 23.7 % of the EU population, were at risk of poverty or social exclusion. This means roughly one in four people in the EU experienced at least one of the following three forms of poverty or social exclusion: monetary poverty, severe material deprivation, or very low work intensity.

The development of risk of poverty or social exclusion in the EU over the past decade has been marked by two turning points: in 2009, when the number of people at risk started to rise because of the delayed social effects of the economic crisis and in 2012, when this upward trend reversed;[2]. By 2015, the number of people at risk had fallen almost to the 2008 level, reaching 117.6 million people for the EU-27 and 118.8 million people for the EU-28.

Following the onset of the economic crisis automatic stabilisers as well as other discretionary measures implemented by EU governments were used to cushion the recession’s negative social effects. While discretionary measures, such as increased spending by the government and tax breaks, constitute policy responses to crises, automatic stabilisers, such as unemployment programmes and progressive taxes that increase the tax-base during an economic expansion, are elements of fiscal policy that reduce tax burdens and increase public spending without immediate government actions [3].

Since 2013, the EU has experienced a moderate economic recovery (as shown in the European Commission's Economic Forecast Winter 2016. The European Commission’s Economic Forecast Autumn 2016 (shows this was mainly spurred by low energy prices, elevating households' purchasing power, and the depreciation of the euro, which helped European exports. Gradual improvements in labour markets also accompanied the economic recovery (see also the article on Employment and the European Commission's Annual Review on Employment and Social Developments).

Measuring poverty and social exclusion requires a multidimensional approach. Household income has a big impact on living standards but other aspects, such as access to labour markets and material deprivation, also prevent full participation in society. To address this, the European Commission adopted a broad ‘at-risk-of-poverty or social exclusion rate’ indicator to serve the purposes of the Europe 2020 strategy. This indicator is an aggregate of three sub-indicators: monetary poverty, material deprivation and low work intensity. For more detailed information, refer to the section ‘Data sources and availability’.

Figure 2: Aggregation of sub-indicators of 'people at risk of poverty or social exclusion', EU-28, 2015
(million people)
Source: Eurostat online data code (ilc_pees01)

Because these three dimensions of poverty tend to overlap, they cannot simply be added up to give the total number of people at risk of poverty or social exclusion. Some people are affected by two or even all three types of poverty. Taking the sum of each would lead to cases being double-counted. This becomes clear when looking at the current number of people at risk of poverty or social exclusion (see Figure 2). Therefore people are counted only once in the headline indicator, even if they fall into more than one category.

As Figure 2 shows, monetary poverty was the most widespread form of poverty in 2015. There were 86.6 million people (an equivalent of 17.3 % of the EU population) living at risk of poverty after social transfers in that year, more than twice as many as those with severe material deprivation (40.3 million people or 8.1 % of EU citizens) and very low work intensity [4] (39.6 million people or 10.6 % of the EU population aged 0-59).

Almost 39 million people, or nearly one third (32.4 %) of all people at risk of poverty or social exclusion, were affected by more than one dimension of poverty over the same period. Another 9.2 million people, or one in twelve of those at risk of poverty or social exclusion (7.7 %), were affected by all three forms.

Figure 3: Sub-indicators of 'people at risk of poverty or social exclusion', EU-27 and EU-28, 2005-2015 (¹)
(million people)
Source: Eurostat online data code (t2020_51), (t2020_52) and (t2020_53)

As shown in Figure 3, the three forms of poverty followed different trends between 2005 and 2015. While monetary poverty has increased slightly since 2005, the other two sub-indicators have not followed such a steady path. The number of people living in households with very low work intensity has varied only slightly since 2005. Meanwhile, the number of severely materially deprived people has shown the largest swings compared to both 2005 and 2012, following a similar pattern to the headline indicator (see Figure 1). This suggests that the reduction in material deprivation was the main driver behind the improvement in the headline indicator since the start of the economic recovery. As will be described later in the article, the decline in the amount of materially deprived people was mainly driven by improvements in a handful of countries.

One possible reason for the divergence between monetary poverty and the two other forms of poverty is the different nature of the indicators. While monetary poverty is measured in relative terms, material deprivation and low work intensity are absolute measures (see the section ‘Data sources and availability’). The relativity of monetary poverty means the at-risk rate may remain stable or even increase even though the average or median equivalised disposable income [5]increases. This is because the monetary poverty threshold is set at a specific percentage of the median disposable income. That means that if the median income increases, but the inequality of the income distribution remains unchanged or even increases, the number of people below the poverty line does not decrease. Absolute poverty measures reflecting a person’s ability to afford basic goods, however, are likely to decrease during economic revivals when people are generally more financially better off.

The number of people at risk of poverty or social exclusion has increased in most Member States

Figure 4: People at risk of poverty or social exclusion, by country, 2008 and 2015
(% of population)
Source: Eurostat online data code (t2020_50)

Although on average 23.7 % of the EU population were affected by poverty or social exclusion in 2015, the current level and the evolution of the country-specific shares underlying this figure have varied greatly. The country with the lowest share of poor or socially excluded people among its population was the Czech Republic (14.0 %), followed by Sweden (16.0 %), the Netherlands (16.4 %) and Finland (16.8 %). At the other extreme were some southern and eastern European countries, in particular Greece (35.7 %), Romania (37.4 %) and Bulgaria (41.3 %), where more than a third of the population was affected by poverty or social exclusion.

To meet the overall EU target on risk of poverty and social exclusion, Member States have set their own national targets in their National Reform Programmes. As noted in the European Council conclusions from 17 June 2010, Member States are free to set their own targets based on the most appropriate indicators for their circumstances and priorities. In most countries the target is expressed as an absolute number of people to be lifted out of the risk of poverty or social exclusion compared with 2008 (European Commission, 2015). This corresponds to the base year also used for the overall EU target.

In 17 of the EU Member States, the number of people at risk of poverty or social exclusion has risen since 2008, increasing the distance to their national targets (see Figure 4). 19 Member States use a target based on the indicator ‘people at risk of poverty or social exclusion’, and four (Bulgaria, Denmark, Estonia and Latvia) base their targets on one or more of its sub-indicators. The remaining countries (Germany, Ireland, the Netherlands, Sweden, and the United Kingdom) defined their targets based on nationally developed indicators not available on the Eurostat database [6].

Three countries using the ‘at risk of poverty or social exclusion’ indicator or one of its sub-indicators (the Czech Republic, Poland and Romania) had already reached their national poverty targets by 2015. Poland and Romania have also made the most progress in integrating their most vulnerable members into society (a reduction of 7.1 and 6.8 percentage points in the share of people affected by poverty or social exclusion, respectively). But despite this, Romania still has one of the highest rates of people in poverty or social exclusion in the EU. Lithuania had also met its goal in 2014, but by 2015 it had moved away from it again. The other Member States using this concept to define their national targets have yet to meet their goals.

Improvements in the number of poor or socially excluded people between 2008 and 2015 can also be seen among other Member States who have either not reached their target (such as France, Croatia, Latvia, Austria, Slovakia and Finland) or have based their targets on country-specific indicators (such as Germany).

Three southern European countries ─ Greece, Cyprus and Spain ─ experienced the most substantial increases in the share of people at risk of poverty or social exclusion, ranging from five to eight percentage points.

One reason for the disparity in poverty rates across the EU is the uneven impact of the economic crisis. Although many factors have influenced overall economic performance, much of the current divergence results from the way labour markets and social systems reacted to the severe global downturn and to fiscal consolidation packages implemented in most Member States (European Commission, 2015; see also the article on ‘Employment’).

Figure 5: People at risk of poverty after social transfers, by country, 2008 and 2015
(% of population)
Source: Eurostat online data code (t2020_52)

In 2015, 17.3 % of the EU population earned less than 60 % of their respective national median equivalised disposable income, the so-called ‘poverty threshold’. This represents a slight increase compared with 2008, when 16.5 % fell below this threshold.

Most countries also experienced growth in the number of people below the monetary poverty line, regardless of whether they had low or high levels to begin with. Increases were most pronounced in Hungary, Sweden and Spain, with rises of between 2.3 and 2.5 percentage points. Croatia, Finland, Austria, the United Kingdom and Latvia were the exception, with monetary poverty in these countries decreasing by 0.6–3.4 percentage points between 2008 and 2015.

Figure 6: Poverty rate after taxes and transfers, poverty line 60%, by country, 2008 and 2014 (¹)
(%)
Source: OECD dataset on Income Distribution and Poverty

Compared with the main economies worldwide, the EU average share of people suffering from monetary poverty at 17.3 % is low, despite increases since 2008. In most non-EU OECD countries, this value is roughly between 20 % and 25 % (see Figure 6). Commonwealth countries in the OECD outside the EU as well as Asian OECD countries including Russia are at the bottom end of this range, with 19.1 % in New Zealand and 20.1 % in both Australia and Canada as well as 20.0 % in Korea, 21.9 % in Japan and 21.6 % in Russia. Monetary poverty is more prevalent in the Latin American OECD countries Chile (23.8 %) and Mexico (23.7 %) as well as the Unites States (24.2 %), Turkey (24.7 %) and Israel (25.1 %). Conversely, the EFTA States and OECD Members Norway (13.7 %) and Switzerland (14.6 %) have poverty rates lower than the EU average but higher than the EU Member States with the lowest shares [7].

Figure 7: At-risk-of-poverty rate before and after social transfers, by country, 2015
(%)
Source: Eurostat online data code (t2020_52) and (tesov250)

To support people at risk of poverty, governments provide social security in the form of social transfers, such as pensions and unemployment benefits. The effectiveness of monetary social provision can be evaluated by comparing the at-risk-of-poverty rate before and after social transfers (see Figure 7). In the EU, social transfers reduced the share of people at risk of poverty by 8.6 percentage points in 2015, from 25.9 % to 17.3 %. However, the extent to which Member States were able to reduce this rate through social transfers varied greatly. For example, the share of poverty before social transfers was similar in Finland (at 26.8 %) and in Romania (29.3 %). While Finland experienced the second largest decrease in the EU after social transfers (–14.4 percentage points), in Romania the share of monetary poor only fell by a small extent (-3.9 percentage points) as a result of such transfers.

Over time, the at-risk-of-poverty rates before and after social transfers have moved in different directions. The rate before social transfers was relatively stable in the EU between 2010 and 2015, while the rate after social transfers increased slightly over the same time. This means that either the amount of social transfers paid have fallen or they have become less effective over time.

According to the European Semester Thematic Fiche, differences in the effectiveness and the efficiency of social protection expenditures depend on different factors, such as the level of poverty and inequality before social transfers and differences in the size and design of these expenditures[8].

Figure 8: Severely materially deprived people, by country, 2008 and 2015
(% of population)
Source: Eurostat online data code (t2020_53)

Material deprivation covers issues relating to economic strain, durables and housing, and environment of the dwellings. People living in severely materially deprived conditions are greatly constrained by a lack of resources. This means they live in households unable to afford four or more items out of a list of nine considered by most people to be desirable or even necessary for an adequate life[9].

In 2015, 40.3 million people in the EU were living in conditions severely constrained by a lack of resources. This was equal to 8.1 % of the total EU population, making severe material deprivation the second most common form of poverty. The levels of severe material deprivation differed widely across the EU in 2015, from 34.2 % in Bulgaria to as low as 0.7 % in Sweden (see Figure 8).

These persistent disparities between Member States are likely to be due to a mix of factors. According to the Annual Report of the Social Protection Committee, differences in living standards and the effectiveness of social policies especially play a part.

Since 2008, the number of people living in severe material deprivation has fallen in just over half of the EU Member States. Overall, in the EU this rate decreased from 8.4 % by 0.3 percentage points to 8.1 % in 2015. The most distinct improvements in this time period took place in Romania, Poland and Bulgaria, where severe material deprivation decreased by between 7 and 10 percentage points. As shown above, the decrease in severe material deprivation is the driver behind the decrease in the headline indicator poverty and social exclusion. Thus to a large extent the overall positive development in the headline indicator is due to the large decrease in material deprivation in Romania, Poland and Bulgaria.

In a few Member States, the share of people living in poor conditions is much higher than the share at risk of monetary poverty. This is because monetary poverty is a relative measure, while material deprivation is absolute (it refers to the deprivation of basic necessities for survival based on a given basket of goods). For example, in Hungary and Bulgaria the proportion of people living in severely deprived conditions was about 1.5 times as high as the share living in monetary poverty. Contrarily, in a few countries with higher living standards such as Spain, Sweden, Estonia and Luxembourg, the monetary poverty rate clearly exceeded the rate of people suffering from severe material deprivation.

Figure 9: People living in households with very low work intensity, by country, 2008 and 2015
(% of population aged 0 to 59)
Source: Eurostat online data code (t2020_51)

In 2015, 10.6 % (or 39.6 million) of the EU population aged 0 to 59 were living in households with very low work intensity. This means the working-age members of the household worked no longer than 20 % of their potential working time during the previous year. Across Europe, this figure ranged from 5.7 % in Luxembourg to 19.1 % in Ireland (see Figure 9).

Even though on average the share of the population aged 0 to 59 who were living in households with very low work intensity increased by only 1.4 percentage points between 2008 and 2015, the share has changed considerably in some individual Member States. Hungary, Germany and Poland showed substantial improvements in the work intensity of the working age population, with reductions in the share of people living in households with very low work intensity ranging between 2.6 and 1.1 percentage points. The opposite was true in the southern European countries Greece, Spain, Cyprus and Portugal as well as Ireland, where the share increased between 4.6 and 9.3 percentage points.

In some countries, low work intensity levels do not seem to correspond to the extent of the other forms of poverty or social exclusion. Belgium, the United Kingdom and Denmark, for example, had a higher-than-average proportion of households with very low work intensity (14.9 %, 11.9 % and 11.6 % respectively), despite their risk of monetary poverty and severe material deprivation being below the EU average. In contrast, Latvia and Romania were among the Member States with the highest proportion of their population at risk of monetary poverty in 2015 while having some of the lowest shares of households with very low work intensity (7.8 % and 7.9 %, respectively)[10].

Poverty and social exclusion do not only affect those who are economically inactive or unemployed (for more information on employment statistics indicators see the ‘Employment’ article). In 2015, all in all 7.7 % of the working EU population were at risk of poverty, despite working full time (so-called ‘working poor’). The share of the working population at risk of poverty again varied greatly among Member States, ranging from 2.9 % in Finland to 14.7 % in Romania[11].

With the exception of those aged between 18 and 24, men are more often among the working poor than women. This is because women are more often secondary earners, meaning the household income does not depend only on them, and working poverty is determined by household income[12].

Which groups are at greater risk of poverty or social exclusion?

Identifying groups with heightened risk of poverty or social exclusion and determining the reasons behind this vulnerability is the key to creating sound policies to fight poverty. Compared with the EU average, some groups of the population are at a higher risk of poverty and social exclusion. The most affected are women, children, young people, the unemployed, single-parent households and those living alone, people with lower educational attainment, people born in a different country than the one they reside in, people out of work, and in a majority of Member States those living in rural areas.

Women and young people are more likely to live in poverty and social exclusion than men

Figure 10: People at risk of poverty or social exclusion, by sex and age group, EU-28, 2015
(% of population)
Source: Eurostat online data code (ilc_peps01)

People's roles and responsibilities within families and at the workplace change throughout their lives and can also be influenced by gender. Thus, age and sex are an interesting breakdown to consider when analysing poverty and social exclusion.

In 2015, women were more likely to experience poverty or social exclusion than men by 1.4 percentage points (the rate for women was 24.4 %, while for men it was 23.0 %). Women were worse off in all EU countries except for Poland and Spain, where men were at higher risk of poverty or social exclusion, and Finland, where the risk was equal for men and for women. In 2015, the gender gaps were highest in the Baltic States Latvia (5.5 percentage points) and Estonia (3.8 percentage points) as well as in Bulgaria (3.5 percentage points), the Czech Republic and Slovenia (3.3 percentage points each).

Overall, between 2008 and 2015 the share of both men and women at risk of poverty or social exclusion followed a similar path as the trend of the headline indicator depicted in Figure 1. After 2012, however, the rate decreased more for women than it did for men, with the effect that the gender differences in poverty were slightly reduced. The gender gap narrowed in almost all EU countries between 2008 and 2015, except for Sweden, Latvia and Bulgaria, where minor increases were observed.

Because the structure of the survey assumes that households with more than one member share their resources equally, the main drivers behind the gender gap are higher poverty rates among single female households, mainly those with dependent children [13]. In a workshop on the main causes of female poverty, the Directorate General for Internal Policies pointed out that one reason for this persisting gender gap is that single parents are more likely to have very low work intensities compared with other households with children. These single-parent households are far more often headed by women (almost 10 % of all European households in 2011) than by men (1.8 %). A comparison of Member States’ performance in the European Semester Thematic Fiche shows two policy measures that could ease this problem: child and family-support benefits and access to affordable, high-quality childcare.

The long-term effects of women’s reduced work intensity (both single and married) become especially apparent in old age. Although women were more likely to be at risk of poverty or social exclusion than men in all age groups in 2015, the largest differences between men and women could be seen for the last age group (65 or over), displaying a gender gap of 5 percentage points. One explanation for the poverty gap between men and women among elderly EU citizens is that on average women receive a lower pension income than men. As shown in the European Commission’s Pension Adequacy Report, this is mainly due to childcare-related gaps in their employment history and patterns of employment with low pension coverage.

For both men and women, young people aged 18 to 24 are the most likely to be at risk of poverty or social exclusion. Almost a third of the young people were at risk in 2015 (31.8 % of women and 30.8 % of men). People younger than 18 years had the second highest risk, at 26.9 %. Moreover, the situation of young people aged 18 to 24 has deteriorated the most since 2010 compared to other age groups. Although their risk of poverty or social exclusion had been falling until 2009, it climbed back up in the following years. The year 2015 showed a slight reduction compared to 2014 (for more information on this group’s employment situation see the article on ‘Employment’). In contrast, older people aged 65 or over had the lowest rate of poverty or social exclusion, at 17.4 % in 2015 [14]. Rates for this group showed a steady decline between 2010 and 2014. As a result, the age gap widened during this period and has remained stable after that.

This widening of the poverty gap between young people aged 18 to 24 and older people aged 65 or over can be seen in more than half the Member States. Especially large increases could be observed in the southern European countries Greece, Spain, Cyprus and Portugal (see the article on ‘Employment’) [15]. This is to a large extent because in most countries during the preceding economic crisis, pensions and retirement benefits for older people were either not reduced or not reduced by as much as was the income of the younger population [16].

Lack of work increases the risk of poverty or social exclusion

At 66.6 %, exactly two-thirds of unemployed people in the EU were at risk of poverty or social exclusion in 2015 [17]. In the same year, 43.7 % of other economically inactive people [18] were also at risk. In comparison, the share of employed people at risk was just 12.5 %. This shows that poverty or social exclusion pose a greater threat to the unemployed. The extent to which members of a household have the opportunity to work is thus a relevant factor determining poverty or social exclusion. (For more information on this topic see the sub-indicator very low work intensity earlier in this article)

This risk of poverty or social exclusion increased for all groups regardless of their employment status between 2010 and 2015, except for retired people, where it fell by 2.8 percentage points. Of the Member States in 2015, Luxembourg had the lowest risk of poverty or social exclusion among the unemployed (53.3 %), while Germany had the highest (83.1 %).

Interestingly, men were more likely than women to experience poverty in all groups, except for retirees. Among those, the share of women at risk of poverty or social exclusion was just over 3.3 percentage points higher than that of men. This highlights the fact that one of the drivers behind the feminisation of poverty and social exclusion discussed earlier is due to the amount of women at risk of poverty or social exclusion at retirement age.

Single parents face the highest risk of poverty or social exclusion

Figure 11: People at risk of poverty or social exclusion, by household type, EU-28, 2010 and 2015
(% of population)
Source: Eurostat online data code (ilc_peps03)

Single people with one or more dependent children had a 47.9 % chance of being at risk of poverty or social exclusion in 2015. This was just over twice the average rate and higher than for other household types. However, this group also experienced the largest decline in the percentage at risk since 2010 when the rate was 52.1 % and well over double the average.

Figure 11 shows that in general households with only one adult — both with children and without — and households with many children are at a higher risk of poverty or social exclusion. In single-adult households there is no partner to help cushion temporary disruptions such as unemployment or sickness. Also, many such households are made up of young unemployed people or pensioners — often women — which have a higher-than-average risk of poverty or social exclusion [19]. Single parents also face the challenge of being both the primary breadwinner and caregiver for the family. The group with the lowest poverty rate in 2015 was that of households with two adults where at least one person was aged 65 years or over.

At the Member State level, the at-risk of poverty or social exclusion rate for single parent households showed varying trends between 2010 and 2015. Changes ranged from a rise of 7.4 percentage points in Greece to a fall of 17.9 percentage points in Malta. Other countries also experiencing large increases were Denmark (6.9 percentage points) and Finland (6.7 percentage points). The biggest falls, besides Malta, were in Latvia (– 13.7 percentage points) and Germany (– 10.4 percentage points).

In contrast, for households with two adults with at least one aged 65 or over, the at-risk-of-poverty or social-exclusion rate decreased, or increased only slightly, in a majority of Member States. Hence, the absence of children seems to lower the risk of poverty or social exclusion.

People with low educational attainment are three times more likely to be at risk compared with those with the highest degrees

Figure 12: People at risk of poverty or social exclusion, by educational attainment level, EU-28, 2010 and 2015
(% of population aged 18 and over)
Source: Eurostat online data code (ilc_peps04)

In 2015, 34.7 % of people with at most lower secondary educational attainment were at risk of poverty or social exclusion (see Figure 12). In comparison, only 11.7 % with tertiary education were in the same situation. This shows that the least educated people were almost three times more likely to be at risk than those with the highest education levels (also see the article on ‘Education’). This is also reflected in the data on employment which shows that the likelihood of being employed rises in line with educational level (see the article on ‘Employment’ or the Education and Training Monitor 2016 of the European Commission for more information).

This situation is even more distinct in Member States such as Croatia, Hungary, Poland, Slovenia, Romania, Malta and the Czech Republic. In these countries, people with the lowest educational attainment were over four to more than seven times more likely to be at risk of poverty or social exclusion than those with the highest educational attainment. In 13 Member States, this ratio increased between 2010 and 2015. However, better education did not necessarily offer protection from the crisis. Between 2010 and 2015, 14 Member States also experienced a rise in the rate among those with the highest educational degrees.

The risk of poverty or social exclusion due to low education is passed on to the next generation

An important aspect to consider when analysing the overall number of people living in poverty or social exclusion is how factors leading to these situations are transmitted from one generation to the next.

In 2015, 65.6 % of children of parents with at most pre-primary and lower secondary education were at risk of poverty or social exclusion. This was over six times higher than for children of parents with first or second stage tertiary education. Moreover, between 2010 and 2015 the increase in the risk of poverty or social exclusion was particularly high for children of parents with the lowest educational attainment while the increase was minimal for the other children. Thus, education, which is a strong determinant of poverty or social exclusion for adults, also influences whether children live in poverty or social exclusion.

Figure 13: Children at risk of poverty or social exclusion by educational attainment level of their parents, EU-28, 2010 and 2015
(% of population aged less than 18 years)
Source: Eurostat online data code (ilc_peps60)

In 2015, children whose parents had the lowest educational attainment had the highest risk of poverty or social exclusion in Slovakia (94.4 %), Bulgaria (89.5 %) and Hungary (83.7 %). Furthermore, while the Czech Republic has the overall lowest rate of poor or socially excluded people in all of the EU, children in the Czech Republic born to parents with the lowest educational attainment were highly likely to suffer from poverty or social exclusion (at a rate of 82.3 %). Conversely, in Denmark, Portugal, Estonia and Luxembourg the risk of poverty or social exclusion for children whose parents had the lowest educational attainment was the lowest in the EU, between 41.9 and 49.9 % (for more information on the educational levels per country, see the article on ‘Education’).

The risk of poverty or social exclusion for children whose parents had the lowest educational attainment increased between 2010 and 2015 in over two thirds of Member States. The increase ranged from 19.8 percentage points in Lithuania to 0.4 percentage points in Slovakia. In ten of these Member States, such an increase took place although the overall rate of poverty or social exclusion decreased. For instance, in Lithuania the overall poverty rate decreased by 4.7 percentage points. A third of the Member States made progress on this issue. For instance, in Estonia, Poland and Romania this rate decreased by 10 percentage points or more each. With the exception of Germany and the UK, the overall poverty rate also fell in these countries.

The socio-economic environment in which children grow up does not only affect the standard of living in their youth. There is also a close link between the socio-economic status of adults and the status of their parents during their childhood.

For instance, the ad hoc module on Intergenerational transmission of disadvantage statistics carried out in the EU Statistics on Income and Living Conditions (SILC) in 2011 showed that 34.2 % of low-educated adults also had low-educated parents in their childhood. This can be explained by the parents’ inability to financially support their children’s studies and/or to pass on a perception of the importance of education to their children.

Education is not the only factor transmitted from generation to generation. In 2011, 68.9 % of adults with a low ability to make ends meet grew up in a household in the same situation. Moreover, among adults ‘not at work’, 28.6 % also grew up in a household with at least one parent ‘not at work’ [20]. Thus, children growing up in unfavourable conditions are less likely than their better-off peers to do well in school, enjoy good health and realise their full potential later in life (for more information see Eurostat’s statistical book on Living Conditions in Europe).

In a Commission Recommendation, the European Commission encouraged its Member States to take action to prevent the transmission of disadvantages across generations. Specifically, it advised them to guarantee that children grow up with sufficient resources, as well as to assure their access to quality education including childcare services and health services, and to enforce children’s rights to access different pastime activities.

People from outside the EU are generally worse off than people living in their home country

Figure 14: People at risk of poverty or social exclusion by broad group of country of birth, by country, 2015
(% of population aged 18 and over)
Source: Eurostat online data code (ilc_peps06)

In 2015, people living in the EU but born in a non-EU country had a 40.2 % risk of living in poverty or social exclusion. The risk was lower for people born in an EU-country other than the one they were living in, at 25.2 %. Among the people whose country of residence corresponded to their country of birth, 21.7 % were at risk of poverty or social exclusion. Thus, people born outside the EU were almost twice as likely to be at risk of poverty or social exclusion compared with native citizens. Compared to migration from a country from outside the EU, migration within the EU bears a far smaller risk of poverty or social exclusion.

A cross-country comparison shows that this ‘origin gap’ differs strongly across EU Member States. The countries with the greatest difference in at-risk-of-poverty rate between people from non-EU countries and those living in their home country are Greece (34.3 percentage point gap), Belgium (33.7 percentage point gap) and Spain (31.3 percentage point gap). Conversely, the Czech Republic and Malta showed the smallest differences between these two groups. In these countries, foreign citizens from a non-EU country were around six percentage points more likely to be at risk of poverty or social exclusion compared with citizens living in their country of birth. In Poland the opposite pattern could be seen, where people from non-EU countries had a 10.7 percentage point lower risk of poverty or social exclusion compared with native citizens in 2015. Finally, in some Member States foreign citizens from other EU countries fare better in terms of poverty or social exclusion than native citizens. This is the case in Hungary, Poland, Portugal, Croatia and Germany. Country differences in the ‘poverty origin gap’ could be explained by a number of factors, such as the level of education, credential recognition, labour market access and employment status of foreign citizens residing in a given Member State. Furthermore, the socio-economic outcomes of the foreign-born population in Member States may also reflect the different reasons for migrating to a specific country. For instance, in many EU countries a large share of non-EU migrants did not come to their host country primarily for work, but rather for family reasons, or, in some Member States, for international protection (see Employment and Social Development in Europe 2015 [21]).

Between 2010 and 2015 the risk of poverty or social exclusion increased for those living in a country other than their country of origin, both for those from outside the EU (by 3.3 percentage points) and those from inside the EU (by 2.7 percentage points).

The overall trend could be explained by the fact that people born in countries other than the one they reside in have suffered the most from rising unemployment in the EU, as shown in the Migrant integration statistics. The situation of the non-EU-born population in the EU is especially relevant in light of the increasing need to respond to the influx of asylum seekers, which increased notably in 2015 (for more information see the Asylum quarterly report).

In the majority of Member States, people in rural areas are more at risk of poverty or social exclusion

Figure 15: People at risk of poverty or social exclusion by degree of urbanisation, by country, 2015
(% of population)
Source: Eurostat online data code (ilc_peps13)

On average, EU citizens in rural areas were slightly more likely to live at risk of poverty or social exclusion than those in urban areas (25.5 % in rural areas compared with 24.0 % in urban areas) in 2015. Those living in towns or suburbs were the least likely to be at risk (22.1 %). However, the figures vary greatly between Member States. In 15 Member States, people living in rural areas were at the highest risk of being poor or socially excluded. The countries with the highest poverty rates in rural areas compared with urban areas are Romania (26.7 percentage points higher) and Bulgaria (23.1 percentage points higher) [22]. In other countries, such as Denmark, Austria, Belgium, the United Kingdom and Germany, the opposite is true: a clearly larger share of urban residents live in poverty or social exclusion compared with residents in rural areas or towns. There are also countries, such as the Czech Republic, Finland and Slovenia, where the poverty rates in urban, rural or suburban areas differ only slightly.

In a study report on poverty and social exclusion in rural areas, the European Commission identified four main categories of problems that characterise rural areas in the EU and determine the risk of poverty or social exclusion: demography (for example, the exodus of residents and the ageing population in rural areas), remoteness (such as lack of infrastructure and basic services), education (for example, lack of preschools and difficulty in accessing primary and secondary schools), and labour markets (lower employment rates, persistent long-term unemployment and a greater number of seasonal workers). For more information on the different employment rates across different types of municipalities, see the article on ‘Employment’).

Outlook towards 2020

Despite progress in reducing poverty or social exclusion levels, aided by the incipient economic recovery, the number of poor or socially excluded people still needs to fall by 22.9 million people in the EU by 2020 to fulfil the poverty goal of the Europe 2020 strategy.

In its stocktaking of the Europe 2020 strategy, the European Commission acknowledges there is no sign of a rapid improvement in the situation and expects that the number of people at risk of poverty might remain at about 100 million by 2020. The European Commission expresses a concern that ‘the situation is particularly aggravated in certain Member States, driven by increases in severe material deprivation and in the share of jobless households’, reckoning that ‘the crisis has demonstrated the need for effective social protection systems’.

The European Semester Thematic Factsheet on Social Inclusion states that the prevention and reduction of poverty or social exclusion largely depend on Member States’ actions and reforms taken. The EU complements and supports the Member States’ policies. In order to reach the objective of the Europe 2020 strategy of reducing the amount of people at risk of poverty or social exclusion by 20 million people, the Annual Report of the Social Protection Committee emphasises there needs to be a shift from short-term measures to structural reforms. Appropriate economic, employment, tax and education policies could support economic growth, raise employment [23] and help tackle in-work poverty, and guarantee adequate levels of social protection and access to quality services.

As the most widespread form of poverty, monetary poverty is one of the major challenges to achieving the Europe 2020 target. The proportion of people at risk of monetary poverty is closely linked to income inequality. As stated in the Synthesis Report of the 2011 Peer Review in Social Protection and Social Inclusion, this is not reduced by simply raising the average income. Therefore, action needs to be taken in the areas of social protection and improving the efficiency and effectiveness of income support.

To make progress towards the Europe 2020 poverty goal it will be particularly important to focus on groups that are at high risk of poverty and social exclusion. Actions to be taken for this purpose have been outlined in the EU flagship initiatives ‘Youth on the move’, ‘Agenda for new skills and jobs’ and ‘European Platform against poverty’. These include EU-funded study programmes, learning projects and training aimed at facilitating the employment of young people, as well as reforms to improve the flexibility and security in the labour market (‘flexicurity’), to improve the quality of jobs, and to ensure better conditions for workers and for job creation (see the Agenda for new skills and jobs). A further programme within the European Employment Strategy is the Youth Guarantee Programme, a commitment by all Member States to ensure that all young people under the age of 25 receive employment opportunities or further education after having finished formal education. Finally, the Fund for European Aid to the Most Deprived (FEAD) supports EU countries' actions in providing food, clothing, and other essential goods to the most deprived and finance non-material social inclusion measures for the poorest in society.

Measures directly addressing poverty and social exclusion include the monitoring of Member States’ economic and structural reforms through the European Semester and actions designed to help meet the poverty target at the European level. Additionally, the EU agency Eurofond, which has been providing knowledge to assist in the development of social and work-related policies since 1975, supports the Europe 2020 strategy with research to identify factors for successful changes. Also, the European Anti-Poverty Network (EAPN), a network of anti-poverty NGOs and grassroots groups as well as European Organisations, engages groups facing poverty and social exclusion in the EU and national decision-making processes.

Data sources and availability

Due to the structure of the survey on which most of the key social data is based (EU Statistics on Income and Living Conditions (EU-SILC)), a large part of the main social indicators available in 2010 (when the Europe 2020 strategy was adopted) referred to 2008 as the most recent year of data available. For this reason, 2008 is used as the baseline year for monitoring progress. For the headline indicator, ‘People at risk of poverty or social exclusion’, the target value for 2020 continues to be based on EU-27 data from 2008 because EU-28 aggregated data are only available starting from 2010. This is also why the analysis of the headline indicator and the three sub-indicators refers to both EU-27 data (from 2005) and EU-28 data (from 2010).

Indicators presented in the article:

  • People at risk of poverty or social exclusion (AROPSE) (t2020_50)
Breakdown by age and sex (ilc_peps01)
Breakdown by activity status (ilc_peps02)
Breakdown by household type (ilc_peps03)
Breakdown by educational attainment level (ilc_peps04)
Breakdown by educational attainment of one's parents (ilc_peps60)
Breakdown by broad country of birth (ilc_peps06)
Breakdown by degree of urbanisation (ilc_peps13)
  • People at risk of poverty after social transfers (AROP) (t2020_52)
Breakdown by poverty threshold (ilc_li02)
  • At-risk-of-poverty rate before social transfers (tesov250)
  • Severely materially deprived people (t2020_53)
  • People living in households with very low work intensity (t2020_51)
  • In-work-at-risk-of-poverty rate (ilc_iw07)

Context

Poverty and social exclusion harm individual lives and limit the opportunities for people to achieve their full potential by affecting their health and well-being and lowering educational outcomes. This, in turn, reduces opportunities to lead a successful life and further increases the risk of poverty. Without effective educational, health, social, tax benefit and employment systems, the risk of poverty is passed on from one generation to the next. This causes poverty to persist and hence creates more inequality, which can lead to long-term loss of economic productivity from whole groups of society [24] and hamper inclusive and sustainable economic growth.

To prevent this downward spiral, the European Commission has made ‘inclusive growth’ one of the three priorities of the Europe 2020 strategy. It has set a target to lift at least 20 million people out of the risk of poverty and social exclusion by 2020. To underpin this objective, the European Commission has launched two flagship initiatives under the ‘inclusive growth’ priority: the ‘Agenda for new skills and jobs’ and the ‘European platform against poverty and social exclusion’. Furthermore, between 2010 and 2014 a package of policy initiatives ‘Youth on the move’ was instated to enhance the performance of education systems and help young people find work. Also, the ‘Youth guarantee’ programme is a commitment by all Member States to enhance young people’s employment opportunities or possibilities for further training across the EU.

By setting a poverty target, the EU has put social concerns on equal footing with economic objectives. Achieving the target to reduce the number of people at risk of poverty and social exclusion will depend on the successful implementation of other priorities of the Europe 2020 strategy, such as providing better opportunities for employment and education (see the articles on ‘Employment’, and ‘Education’).

See also

Further Eurostat information

Publications

Main tables

Dedicated section

Methodology / Metadata

Other information

External links

Notes

  1. Due to the structure of the survey on which most of the key social data is based (EU Statistics on Income and Living Conditions), a large part of the main social indicators available in 2010, when the Europe 2020 strategy was adopted, referred to 2008 as the most recent year of data available. This is why 2008 data for the EU-27 are used as the baseline year for monitoring progress towards the Europe 2020 strategy's poverty target. Since 115.9 million people were at risk of poverty or social exclusion in the EU-27 in 2008, the target value to be reached is 95.9 million by 2020.
  2. For the development following 2009, see the economic analysis from the European Commission's Directorate General for Economic and Financial Affairs.
  3. Dolls et al. 2012: Automatic stabilization and discretionary fiscal policy in the financial crisis. IZA Journal of Labor Policy 2012, 1:4.
  4. The dimension “very low work intensity” is only measured among those aged 0-59. Therefore, people over the age of 59 are considered at risk of poverty or social exclusion only if the criteria of one of the two dimensions “monetary poverty” or “severe material deprivation” are met.
  5. The equivalised disposable income refers to the financial means a household has left for saving and spending. It is calculated by taking the entire income of a household and dividing it by the weighted household size, where each household member receives a weight depending on their age.
  6. Germany and Sweden use targets based on different forms of unemployment, Ireland defined a combined poverty target, the Netherlands aims at reducing the amount of jobless households, Sweden’s target refers to different situations of long-term unemployment, and the UK based its numerical targets on a nationally launched Child Poverty Act.
  7. These values are taken from the OECD dataset on Income Distribution and Poverty and correspond to the newest data available in this set (2014: Australia, Israel, Korea, Mexico and the United States, 2013: Canada, Chile, Norway and Switzerland, 2012: Japan and New Zealand, 2010: Russia). All data except for that of Russia is based on the OECD’s new income definition, which includes the value of goods produced for own consumption as a component of self-employed income, an element not considered in the SILC income definition.
  8. Earnings-related social benefits, for instance in old age, are often not aimed at reducing poverty as maintaining the living standards of those facing the risk.
  9. These items are the following: to pay their rent, mortgage or utility bills; to keep their home adequately warm; to face unexpected expenses; to eat meat or proteins regularly; to go on holiday; a television set; a washing machine; a car; a telephone.
  10. This can be the case for a number of reasons, such as a high amount of social transfers in one country or a generally low income level in another.
  11. Source: Eurostat (online data code: (ilc_im07))
  12. For more information, see: https://epthinktank.eu/2014/08/13/in-work-poverty-in-the-eu/
  13. Given that the data does not reveal systematic differences in the risk of poverty or social exclusion between single female and single male households without dependent children, the gender gap is expected to be caused by single households with dependent children.
  14. Reasons for this could include that many elderly people receive regular pensions, have accrued some wealth, and have often paid off their housing situation.
  15. Estonia, Croatia, Latvia, Slovenia and Malta were in the opposite situation where poverty was higher among the older than the younger age groups in 2015.
  16. Bertelsmann Stiftung, Social Justice in the EU - Index Report 2015. Social Inclusion Monitor Europe, 2015 (p.10).
  17. Eurostat (online data code (ilc_peps02))
  18. The main economically inactive groups are students, people looking after family and home, long-term sick and disabled, temporarily sick and disabled, retired people and discouraged workers (UK Office for National Statistics (2012), A guide to labour market statistics).
  19. European Centre, Poverty Across Europe: The latest evidence using the EU-SILC Survey, 2008.
  20. Parents ‘not at work’ include unemployed, in retirement or in early retirement or had given up business, fulfilling domestic tasks and care responsibilities, other inactive person, and those answering “don’t know”.
  21. European Commission. Employment and Social Development in Europe 2015, 2016 (p.14)
  22. The same holds true for Malta, but the data is of low reliability.
  23. However, some research also shows that the positive employment development before the economic crisis did not strongly contribute to reducing poverty (see Taylor-Gooby, P., Gumy, J. and Otto, A. 2015: Can ‘New Welfare’ address poverty through more and better jobs? Journal of Social Policy [Online] 44:83-104 and Cantillon, B., Luigjes, C. and Marchal, S. 2015: Poverty reduction in Europe: Social Policy and Innovations. Discussion Paper No. 15/18).
  24. European Commission, Social trends and dynamics of poverty, ESDE conference, Brussels, 2013.