Quality of life indicators - economic and physical safety

Data from October 2013. Most recent data: Further Eurostat information, Main tables and Database.

This article is part of the Eurostat online publication Quality of life indicators, providing recent statistics on the quality of life in the European Union (EU). The publication presents a detailed analysis of many different dimensions of quality of life, complementing the indicator traditionally used as the measure of economic and social development, gross domestic product (GDP).

The present article focuses on the sixth dimension of the '8+1' quality of life indicators framework, economic and physical safety. A variety of risks of different natures may threaten the material conditions of individuals and households in unforeseeable ways. Examples are losing one's job, impaired health, problems related to aging, or even events at the global level, as recently demonstrated through the financial crisis, which led to a sudden deterioration of the international economic environment. On the other hand, non-economic risks such as violence and crime may endanger physical safety. Even when risks do not actually materialise, however, the subjective perception of a threat and the ensuing feelings of insecurity effectively undermine quality of life.

Figure 1: Population unable to face unexpected financial expenses, 2008 and 2011 (%)
Source: Eurostat, EU-SILC (ilc_mdes04)
Figure 2: Population unable to face unexpected financial expenses, by household type, 2011 (%)
Source: Eurostat, EU-SILC (ilc_mdes04)
Figure 3: Arrears on mortgage or rent payments, 2008 and 2011 (%)
Source: Eurostat, EU-SILC (ilc_mdes06)
Figure 4: Population in arrears (mortgage or rent, utility bills or hire purchase), 2011 (%)
Source: Eurostat, EU-SILC (ilc_mdes05)
Figure 5: Population in arrears (mortgage or rent, utility bills or hire purchase) by income situation, 2011 (%)
Source: Eurostat, EU-SILC (ilc_mdes05)
Figure 6: Population in arrears (mortgage or rent, utility bills or hire purchase) by household type, 2011 (%)
Source: Eurostat, EU-SILC (ilc_mdes05)
Figure 7: Population in arrears (mortgage or rent, utility bills or hire purchase) by income situation, EU-27 level, over time (1) (% of total population)
Source: Eurostat. EU-SILC (ilc_mdes05)
Figure 8: Homicide rate, per 100 000 population, average per year, 2000-2002 and 2008-2010 (1)
Source: Eurostat (crim_gen) and (demo_pjan)
Figure 9: Crime, violence or vandalism in the area, by income situation, 2011 (%)
Source: Eurostat, EU-SILC (ilc_mddw03)
Figure 10: Crime, violence or vandalism in the area, by income situation, 2008 and 2011 (% of total population)
Source: Eurostat, EU-SILC (ilc_mddw03)

Main statistical findings

Economic and physical safety in the context of quality of life

There are many risks that may unexpectedly and adversely affect a household’s future material security. These include losing one’s job, worsening health conditions, problems related to aging, and even a sudden deterioration of the economic environment, such as recently happened during the financial crisis. Aside from economic risks or threats, people may also face risks of violence and crime that threaten their physical safety. Even if such risks do not materialise, the subjective perception of a threat and the resulting feelings of insecurity still undermine quality of life.

For statistical purposes, it is useful to distinguish between two major categories: economic and physical safety. Statistics on economic safety measure the risks that could potentially cause material living conditions to suddenly deteriorate, and a household’s capacity to protect itself from them. Statistics on physical safety focus on risks that might threaten physical security.

Economic safety

The concept of economic safety is not limited to the existence and magnitude of risks related to material living conditions, the probability of their materialisation and their financial implications and severity. It also includes people’s and households’ vulnerability and their resilience to such adverse situations. Economic safety is therefore not limited to whether one's own additional financial resources are available if urgently needed, it also includes the existence of various supportive human and social resources, such as the safety net provided by the welfare state or the informal mutual support mechanisms created in a society. Subjective indicators, such as the self-reported ability to cope with unexpected financial expenses, take into account perceived access to these mechanisms.

Since economic safety is not merely a question of disposable income or available wealth, subjective indicators provide a more accurate picture of a person’s or household’s level of economic safety and resilience or vulnerability in the face of economic risk. Moreover, selected objective indicators, such as unpaid debts or arrears on loan or rent payments, are proxies of wealth and can also be used to indicate how risk-prone a household is.

More than one in every three Europeans reported being unable to cope with unexpected financial expenses (Figure 1) and this figure increased during the financial crisis (the percentage rose from 34.3 % in 2008 to 37.9 % in 2011). Economic insecurity was more widespread in most Baltic and Eastern European Member States, as well as Cyprus and Ireland, where in most cases more than half of the population reported being unable to pay for unexpected expenses (more than 70.0 % in Latvia and Hungary, and more than 60.0 % in Bulgaria, Croatia and Lithuania). These countries were also the ones with the highest increase in vulnerability between 2008 and 2011.

Economically vulnerable groups

In its broadest sense, the notion of vulnerability refers to situations in which individuals, households or population subgroups are exposed to harm from potential risks, because they lack the resources to cope with the consequences if these risks materialise. It measures these people’s or groups’ inability to anticipate, withstand and recover from the damage caused by an adverse shock. Economic vulnerability refers to people or households that do not have the economic, human and social, resources to face unexpected financial stress.

Single-parent families are more economically vulnerable than any other household type in the EU-28. Overall, 65.9 % of EU-28 single-parent families with dependent children said that they were unable to face unexpected financial expenses in 2011 (Figure 2). On the other hand, older generations, in particular households with two adults of which at least one is over 65, are less vulnerable, with ‘only’ 26.6 %saying that they are unable to face unexpected expenses; this is below the EU-28 average in the general population (38.1 %). As shown in Figure 2, economic vulnerability is also prevalent among single-female households in some eastern European countries, (89.4 % in Latvia, 88.8 % in Bulgaria, 84.3 % in Croatia, 76.0 % in Hungary, 74.0 % in Lithuania, and 70.2 % in Poland). Similarly, 89.1 % of families with three or more children in Bulgaria, 85.4 % in Hungary and 83.8 % in Latvia reported an inability to face unexpected expenses (see available data).

Overall, economic vulnerability is less prevalent in northern and western European countries, especially Sweden, the Netherlands, Austria, Luxembourg and Denmark. Of the countries in which households’ economic vulnerability was above the EU-28 average, only Italy and Ireland joined the EU before 2004. It is also worth noting that, at the end of 2011, economic vulnerability in Greece and Portugal was lower than the EU-28 average, and lower than in countries such as Germany and the United Kingdom, but it has significantly increased since the outbreak of the crisis.

Unpaid debts and arrears

Mortgage and rent arrears were most prevalent in Ireland, where 11.6 % of the total population had outstanding debts on their home in 2011 (Figure 3). Similar numbers were seen in Greece, where 11.0 % of the population had arrears on mortgage or rent payments. Arrears were below 10.0 % in all other EU countries, while the EU-27 2011 average was 4.0 %.

The percentage of the population that could not pay its mortgage or rent on time for financial reasons in the last 12 months almost doubled in Ireland, Greece, Latvia and Portugal between 2008 and 2011. There were also moderate increases in nearly all other EU countries (except for France, Austria, Bulgaria and Romania).

Arrears in the Eastern European countries with a GDP per capita below the EU average (Romania, Croatia, Bulgaria) were lowest overall. This shows that there may be other causes of mortgage arrears, including households’ total indebtedness and leveraging.

The results are different for arrears in the servicing of loans or any other type of planned household credit (such as hire or paying in instalments) other than the mortgage on the main dwelling (still excluding overdrafts, credit cards, informal loans from friends and relatives, etc.). Overall, 11.7 % of the EU-28 population had such outstanding arrears in 2011 (Figure 4). The highest numbers in relative terms were found in Greece (31.9 %), Bulgaria (30.9 %), Romania (30.2 %), Croatia (28.5 %), Cyprus (27.1 %), Latvia (26.2 %), Hungary (24.7 %), and Ireland (19.9 %). For Bulgaria and Romania, this was in spite of the population’s low mortgage and rent arrears. On the other hand, the percentage of people in this situation in Luxembourg, the Netherlands and Germany was around 5.0 % or below.

Nonetheless, there is conclusive evidence that, in the EU, people at-risk-of poverty face a greater danger of being unable to service their debt (Figure 5) than the rest of the population. This indicator showed improvement before 2007, but the situation has deteriorated again since then (Figure 7). In every EU country, people who earn below 60 % of the median equivalised income are more likely to be in arrears than the general population. In the EU-28, 25.1 % of those who earn less than 60 % of national median equivalised income have outstanding debts, as opposed to 11.7 % in the general population (see Figure 5). The problem is especially acute in Greece and Hungary, where more than 58.0 % of those living below the official poverty threshold were unable to pay their debts on time (almost double the rate for the total population in Greece, and even more than that in Hungary). In Luxembourg, the Netherlands and Germany, where difficulties in servicing debts are the lowest in the EU, including in the general population, arrears among low earners were below 15.0 % Spain is also a noteworthy case, with low arrears both in the general population (15. 0 % )and among those living below the relative poverty threshold (7.7 % ), despite the country being hit by the financial crisis and high unemployment.

Low income is not the only factor affecting households’ ability to service their debt. Household structure also plays a role; single-parent families and households with three or more dependent children are more prone to being economically insecure in many EU countries (Figure 6). This is particularly the case for Greece, Bulgaria, Romania, Latvia and Cyprus. On the other hand, in Luxembourg, the Czech Republic, Portugal, Spain and Germany, single-parent families seem to be coping well with loans. Arrears are also extremely low among families in Luxembourg and the Netherlands with three or more children.

Physical safety

Physical safety refers to being protected from any situation that puts a person’s physical security at risk, such as crime, accidents or natural disasters. A perceived lack of physical safety may affect subjective well-being more than the actual effects of a physical threat. Homicide causes only a small percentage of all deaths, but its effect on people’s emotional lives is very different to the effect of deaths related to medical conditions. Consequently, the effects of those crimes that affect a person’s physical safety are socially magnified and affect the quality of life not only of those close to the victim, but also of many others who then feel insecure or afraid.

Physical safety improved in most EU countries over the last ten years, as shown by the latest available data on homicides. Homicide figures are the most comparable of crime data available in Europe. Homicides are universally reported because of their seriousness, and definitions vary less between countries than those of other types of crime. Hence, homicide data is a reliable proxy indicator of physical security. However, there are limitations in using this indicator, as the data may to some extent depend on police procedures for declaring homicides.

For statistical purposes, homicide is defined as the intentional killing of a person, including murder, manslaughter, euthanasia and infanticide. It excludes death by dangerous driving, abortion and assisted suicide. Attempted homicide is also excluded. In contrast with other offences, it is the number of victims that is counted, not the number of cases.

Between 2008 and 2010, the ratio of the average number of homicides to the average population (per 100  000 habitants) dropped sharply in Lithuania, Estonia, Latvia, and Bulgaria, while smaller decreases were seen in the vast majority of EU Member States (Figure 8). Homicide rates increased slightly only in Cyprus, Luxembourg, Portugal, Greece, and Denmark. Homicides are most prevalent in the Baltic States: Latvia, Lithuania, and Estonia. However, they are relatively rare in some southern EU countries (Malta, Italy, Spain) and Austria, Norway, Switzerland, Germany, the Netherlands and Sweden. In 2008-10, Slovenia had the lowest average homicide rate in the EU (0.56 per 100  000 inhabitants).

Interestingly, individual perceptions of crime rates do not always correspond to the actual prevalence of assaults, vandalism and violence. This is one of the reasons why subjective indicators are also needed to complement objective ones. For example, older, and in some countries (Austria, Greece, Portugal, Slovenia, Cyprus, Italy, Romania, and Latvia) wealthier, people reported slightly more crime and vandalism in their areas than younger and poorer people did, despite being less likely to be victims of crime. But in other EU countries, people earning below 60 % of median equivalised income reported higher rates of crime, violence or vandalism in their areas. On average, 16.8 % of EU citizens living below the poverty threshold reported crime in their areas, while the same is true for 14.2 % of the total population (see Figure 9).

When it comes to the EU-27 general population, no clear trend in perceptions of vandalism and crime has emerged in recent years (Figure 10). Overall, between 2008 and 2011, the percentage of the EU population that reported violent incidents in their areas dropped slightly (from 14.7 % in the EU-27 in 2008, to 14.2 % in the EU-27 in 2011 and 14.1 % in the EU-28). However, these general figures mask significant differences between Member States. For example, although there was a marked drop in reported vandalism and crime between 2008 and 2011 in Finland, Latvia, Spain and the United Kingdom, there were steep increases in Cyprus, Greece, and Bulgaria.

Conclusion

The evidence about the impact of the crisis on economic and physical safety is rather mixed. There seems to be a slight increase in the percentage of Europeans that are unable to cope with unexpected expenses and/or service their debt. On the other hand, the number of homicides has decreased, but the percentage of people who perceive the existence of crime, violence and or vandalism in their area seems to be fairly stable.

More than one in every three Europeans reported being unable to cope with unexpected financial expenses, and this figure increased during the financial crisis. Single-parent families were more economically vulnerable than other households, while older generations, in particular households with two adults of which at least one is over 65, were less vulnerable. In most EU countries, less than 10.0 % of the population reported having to face mortgage and rent arrears (4.0 % for EU-28 as a whole in 2011). This situation deteriorated in most EU countries between 2008 and 2011. People at risk of poverty face greater danger of being unable to service their debts. Low income was not the only factor affecting households’ ability to service their debt though. Household structure plays a role too: single-parent families and households with three or more dependent children are more economically insecure in many EU countries.

Physical safety improved in most EU countries over the last ten years. However, individual perceptions of crime rates did not always correspond to the actual prevalence of assaults, vandalism and violence, and therefore the figure for the subjective indicator did not change significantly between 2008 and 2011. People at risk of poverty reported higher rates of crime, violence or vandalism in their areas and these probably correspond to a larger extent to the objective situation.

Data sources and availability

The data used in this section are primarily derived from EU-SILC. The annual EU-SILC is the main survey which measures income and living conditions in Europe, and is the main source of information used to link different aspects of quality of life at the household and individual level.

  • Economic safety and vulnerability refer to economic aspects as expressed through indicators on -wealth (data so far available on share of the population unable to face unexpected financial expenses); -debt (share of the population in arrears); and -income/job insecurity (likelihood of losing job - to be developed).
  • Physical and personal security covers the issues of crime (age-standardised homicide rate / 100 000 people); -the perception of crime, violence or vandalism in the area; and -the perception of physical safety (population feeling safe when walking alone in their area after dark - under development in SILC 2013). The homicide rate has been calculated from administrative data, available in Eurostat’s database (demo_pjan) and on the EU Statistics on crime and criminal justice (crim_gen).

Context

There are different risks that may unexpectedly and adversely affect a household’s material conditions or a person’s physical security. For the purposes of statistical measurement, two categories of safety were distinguished: economic and physical safety. Economic safety and vulnerability refer to economic aspects as expressed through wealth, debt, and income/job insecurity. Physical and personal safety covers the issues of crime, the perception of crime, violence or vandalism in one’s area, and the perception of physical security.

The subjective perception of threat and the resulting feelings of insecurity undermine quality of life, in addition to the experiencing of these objective adverse conditions. To address this, the European Council endorsed the EU Internal Security Strategy ("Towards a European Security Model") at its meeting in March 2010. The strategy sets out the challenges, principles and guidelines for dealing with security threats related to organised crime, terrorism and natural- and man-made disasters. The Commission adopted a communication with proposed actions for implementing the strategy in 2011-14 ("The EU Internal Security Strategy in Action: Five steps towards a more secure Europe" COM final 0673/2010).

The concept of economic safety is mainly addressed by European policies on the safety net provided by the welfare state. The Social Protection Committee (SPC) is an EU advisory policy committee established by the Treaty on the Functioning of the EU (Article 160), and monitors the development of social protection policies in Member States.

See also

Further Eurostat information

Main tables

Material deprivation (t_ilc_md)
Demography (t_pop)
Demography - National data (t_demo)

Database

Living conditions (ilc_lv)
Material deprivation (ilc_md)
Economic strain (ilc_mdes)
Environment of the dwelling (ilc_mddw)
Demography (pop)
Demography - National data (demo)
Crimes recorded by the police (crim_gen)

Dedicated section

Source data for tables, figures and maps (MS Excel)