People at risk of poverty or social exclusion - Statistics Explained
    

People at risk of poverty or social exclusion

Data extracted in May 2018.

Planned article update: May 2019.

Highlights

In 2016, 118.0 million people in the EU lived in households at risk of poverty or social exclusion; 23.5 % of the population.

17.3 % of the population in the EU were at risk of poverty in 2016.

10.5 % of the population aged 0-59 years in the EU lived in households with very low work intensity in 2016.

In 2016, 7.5 % of the population in the EU were severely materially deprived.

At-risk-of poverty or social exclusion rate, 2016

One of the five headline targets of the Europe 2020 headline indicators is to reduce poverty by lifting at least 20 million people out of the risk of poverty or social exclusion by 2020. This article presents geographical and temporal comparisons of the monetary and non-monetary elements of the indicator that describes poverty and social exclusion in the European Union (EU) using the most recent data (2015 and 2016) from EU statistics on income and living conditions (EU-SILC). Comparisons over the most recent years enable, among other things, an analysis of the impact on the Europe 2020 headline target of the global financial and economic crisis and the austerity measures taken to overcome the crisis.

Full article

Number of people at risk of poverty or social exclusion

In 2016, there were 118.0 million people in the EU-28 who lived in households at risk of poverty or social exclusion (AROPE), equivalent to 23.5 % of the entire population. People at risk of poverty or social exclusion were in at least one of the following situations:

In 2016, there were 51.9 million people in the EU-28 living in households that faced income poverty (but neither severe material deprivation, nor very low work intensity), 15.5 million persons experiencing severe material deprivation (but neither of the other two risks) and 13.2 million people living in households with very low work intensity (but facing neither of the other two risks). An additional 29.0 million people lived in households facing two out of three of these risks, while a further 8.4 million people lived in households where all three of these risks were present. As such, although people are considered to be at risk of poverty or social exclusion as soon as they face one of the above risks, there were 37.4 million people — almost one third (31.7 %) of the total number of people who were at risk of poverty or social exclusion within the EU-28 in 2016 — who faced a combination of two or even all three of these risks (see Figure 1).

Figure 1: Number of persons at risk of poverty or social exclusion analysed by type of risks, EU-28, 2016
(million)
Source: Eurostat (ilc_pees01)


Compared with 2015, the number of people at risk of poverty or social exclusion in 2016 had decreased by 1.0 million, equivalent to a 0.3 percentage point decrease in the share of the total population. As such, the share of the EU-28 population that was at risk of poverty or social exclusion fell to a level that had not been recorded since 2010. A reduction in the number of persons at risk of poverty or social exclusion in the EU is one of the key targets of the Europe 2020 strategy.

Figure 2: At-risk-of poverty or social exclusion rate, 2015 and 2016
(%)
Source: Eurostat (ilc_peps01)


The share of the EU-28 population who are considered to be at risk of poverty or social exclusion, is calculated as a weighted average of national results; it masks considerable variations between EU Member States. In 2016, more than a third of the population was at risk of poverty or social exclusion in three EU Member States: Bulgaria (40.4 %), Romania (38.8 %) and Greece (35.6 %). At the other end of the scale, the lowest shares of persons being at risk of poverty or social exclusion were recorded in Denmark, the Netherlands (both 16.7 %), Finland (16.6 %), and the Czech Republic (13.3 %).

As noted above, between 2015 and 2016, the at-risk-of-poverty rate decreased 0.3 points in the EU-28. The largest decreases among the EU Member States were reported for Latvia (down 2.4 points), Malta (2.3 points), Hungary (1.9 points) and Ireland (1.8 points). By contrast, this rate rose in seven of the EU Member States: Estonia (up 0.2 points), the Netherlands (0.3 points), France (0.5 points), Lithuania (0.8 points), Luxembourg, Italy (both 1.3 points) and Romania (1.4 points).

Figure 3 provides a simplified analysis for each EU Member State regarding the proportion of the population facing the three poverty or social exclusion risks identified above, showing:

  • the proportion of people at risk of poverty including those living in households that were exclusively at risk of poverty as well as those at risk of poverty combined with either or both of the other two risks; in the EU-28 this amounted to a total of 86.9 million people in 2016;
  • the analysis then shows the additional proportion of the population experiencing severe material deprivation (either as a single risk or combined with living in a household with very low work intensity); in the EU-28 this amounted to a total of 17.9 million people in 2016;
  • the final category shows the proportion of the population living in households that were exclusively characterised as having a very low work intensity (those that were not at risk of poverty, nor experiencing severe material deprivation); in the EU-28 this amounted to a total of 13.2 million people in 2016.

As such, when summing up the three categories shown in Figure 3, the result corresponds to the overall proportion of the population at risk of poverty or social exclusion. Among the population at risk of poverty or social exclusion in 2016, those at risk of poverty (whether combined with either or both or the other risks or not) accounted for four fifths or more of the total in Estonia, Sweden, Germany, Luxembourg, Malta and Spain, whereas they made up less than three fifths of the total in Greece, Cyprus, Bulgaria and Hungary.

Figure 3: Proportion of the population at risk of poverty or social exclusion, 2016
(%)
Source: Eurostat (ilc_pees01)

Analysis of populations at risk

Children and active-age people more at risk of poverty or social exclusion than elderly people in several countries

With an at-risk-of-poverty or social exclusion rate of 26.4 % in the EU-28, children were at greater risk in 2016 than the total population (23.5 %). This situation was repeated in 21 of the EU Member States, Iceland, Switzerland and all three candidate countries shown in Table 1. The largest gaps between the rates for children and the total population were observed in Romania, Hungary and Slovakia; in these Member States the rate for children was between 6.3 and 10.4 points higher than for the total population. In Germany, Croatia, Finland, Denmark, Estonia, Slovenia and Latvia, as well as in Norway, the rate for children was below the average for the total population.

Table 1: People at risk of poverty or social exclusion, by age group, 2016
(% of specified population)
Source: Eurostat (ilc_peps01)


The percentage of children living in a household at risk of poverty or social exclusion ranged from less than 15.0 % in Denmark, Finland and Slovenia to 45.6 % in Bulgaria and close to half (49.2 %) in Romania. The main factors affecting child poverty are the labour market situation of the parents (which is linked to their level of education), the composition of the household in which the children live, and the effectiveness of government intervention through income support and the provision of services. There are also more vulnerable groups of children, such as those with migrant parents that require particular attention.

Older people — defined here as persons aged 65 years and over — faced a lower risk of poverty or social exclusion in 2016 than the overall population, with 18.2 % of older people in the EU-28 facing this risk compared with 23.5 % for the whole population. This situation was also observed in 21 of the EU Member States. The risk of poverty or social exclusion faced by older people in 2016 ranged from less than 10.0 % in Luxembourg and Denmark to more than 40.0 % in Estonia, Latvia and Bulgaria. These differences in the relative situation of older people depend on a number of factors including: the characteristics of pension systems for current pensioners; the age and gender structure of the population of older people, as older women and the very old tend to face much higher risks in some Member States.

Income poverty

17.3 % of the population in the EU-28 were at risk of poverty in 2016

Looking at each of the three elements contributing to being at risk of poverty or social exclusion, 17.3 % of the population in the EU-28 in 2016 were at risk of poverty after social transfers (see Table 2), meaning that their disposable income was below their national at-risk-of-poverty threshold. It is important to note that the at-risk-of-poverty rate is a relative measure of poverty and that the poverty threshold varies greatly between EU Member States. The at-risk-of-poverty rate after social transfers in the EU-28 was unchanged in 2016 compared with 2015.

Among the EU Member States, the highest at-risk-of-poverty rates in 2016 were observed in Romania (25.3 %), Bulgaria (22.9 %), Spain (22.3 %), Lithuania (21.9 %), Latvia (21.8 %), Estonia (21.7 %), Greece (21.2 %) and Italy (20.6 %), while in all other EU Member States this rate was under 20.0 %. The lowest rates were in Denmark (11.9 %), Finland (11.6 %) and the Czech Republic (9.7 %).

Table 2: At-risk-of-poverty rate for a single person before and after social transfers, 2015 and 2016
(%)
Source: Eurostat (ilc_li10) and (ilc_li02)


The risk of poverty rate (after social transfers) increased the most in Luxembourg, the Netherlands and Bulgaria in 2016 compared with the previous year, although it should be noted that in all three cases there was a break in series. Elsewhere the largest increases were 0.7 points in Italy, 0.6 points in Belgium, 0.4 points in Slovakia and 0.3 points in Ireland. The largest decreases in the at-risk-of-poverty rate between 2015 and 2016 were in Finland (down 0.8 points), Latvia and the United Kingdom (both 0.7 points); a larger fall, down 0.9 points, was observed in Switzerland.

The at-risk-of-poverty rate before social transfers measures a hypothetical situation where social transfers are absent (pensions not being considered as a social transfer). Comparing this with the standard at-risk-of-poverty rate (after social transfers) shows that such transfers have an important redistributive effect that helps to reduce the number of people who were at risk of poverty. These rates are calculated with the same poverty threshold as for the poverty rate after social transfers, in other words based on 60 % of the median income including social transfers.

The at-risk-of-poverty rate before social transfers presents a slightly different picture from the analysis after transfers. The at-risk-of-poverty rate before social transfers fell 0.2 points between 2015 and 2016 in the EU-28, to reach 25.9 %. The at-risk-of-poverty rate before social transfers decreased in 17 of the EU Member States between 2015 and 2016 and remained unchanged in Poland. By far the largest decrease was in Croatia where it fell by 3.7 points, while decreases of between 1.2 and 1.5 points were recorded in Ireland, Portugal and the United Kingdom and decreases of less than 1.0 points in 13 Member States. The increases were generally 0.5 points or less, as was the case in seven Member States, while higher increases were observed in Austria (0.7 points), Italy (0.8 points) and Estonia (1.1 points).

Along with changes in the distribution of income, at-risk of poverty rates may change because of changes in the poverty threshold. In a number of EU Member States the threshold fell in the aftermath of the global financial and economic crisis.

The at-risk-of-poverty rate is sensitive to sudden changes in income distribution. Luxembourg, the Netherlands and the United Kingdom can be taken as three examples, although it should be noted that both Luxembourg and the Netherlands reported a break in series in 2016. In Luxembourg, the poverty threshold fell between 2015 and 2016, but despite this fact, the at-risk-of-poverty rate in 2016 was 1.2 points higher than the year before. In the Netherlands, the threshold increased strongly, as did the at-risk-of-poverty rate, up 1.1 points. In the United Kingdom, the threshold fell between 2015 and 2016 (like in Luxembourg), but the at-risk-of-poverty rate fell, down 0.7 points.

Table 3: At-risk-of-poverty threshold for a single person, 2015 and 2016
(purchasing power standard, PPS)
Source: Eurostat (ilc_li01)


To allow for sudden fluctuations in poverty thresholds and in order to avoid misleading results in periods of rapid and general economic deterioration, Eurostat also calculates an at-risk-of-poverty indicator anchored in time. This indicator keeps the poverty threshold fixed in real terms over a period of time (not just one year) and therefore removes the effects of a moving poverty threshold. The at-risk-of-poverty rate anchored in time provides complementary information as it gives a different picture of the development of monetary poverty, in particular when median income decreases.

Figure 4 presents the at-risk-of-poverty rates for 2015 and 2016, but anchored in 2008. The results indicate that between 2015 and 2016 the largest increases were observed in Bulgaria (up 2.5 points) and Luxembourg (2.3 points), while there was no change in Belgium. The largest decreases were reported in the Baltic Member States: Latvia (down 4.3 points), Estonia (3.9 points) and Lithuania (3.6 points). In 2016, 17.5 % of the population in the EU-28 were estimated to be at risk of poverty (anchored in 2008), which was 0.2 points higher than the standard (not anchored in time) at-risk-of-poverty rate after social transfers (17.3 %).

In 2016, Greece (47.8 %), Cyprus (32.9 %), Spain (29.2 %) and Italy (25.2 %) had the largest anchored poverty rates, while Malta (9.3 %), Poland (8.8 %), the Czech Republic (7.5 %) and Slovakia (7.3 %) reported the lowest rates; Norway (7.0 %) reported an even lower rate.

Figure 4: At-risk-of poverty rate anchored at a fixed moment in time
(2008), 2015 and 2016
(%)
Source: Eurostat (ilc_li22b)

Work intensity

In 2016, 10.5 % of the population aged 0-59 years in the EU-28 lived in households with very low work intensity

Work intensity refers to the ratio between the number of months that household members of working age (18-59 years, not being a student aged 18-24) worked during the income reference year, and the total number of months that could theoretically have been worked by the same household members. For persons who declared that they worked part-time, the number of months in terms of full time equivalents is estimated on the basis of the number of hours usually worked at the time of the interview. People living in households with very low work intensity are defined as people aged 0-59 years living in households where the adults worked 20 % or less of their total potential during the previous 12 months.

Figure 5: Proportion of people aged less than 60 years living in households with very low work intensity, 2015 and 2016
(%)
Source: Eurostat (ilc_lvhl11)


Just over one tenth (10.5 %) of the EU-28 population aged 0-59 years lived in households with very low work intensity in 2016, 0.2 points less than in 2015. In 2016, the Member States with the highest proportion of households with very low work intensity were Ireland (18.2 %), Greece (17.2 %), Spain (14.9 %) and Belgium (14.6 %), while the Czech Republic (6.7 %), Luxembourg (6.6 %), Slovakia (6.5 %), Poland (6.4 %) and Estonia (5.8 %) recorded the lowest proportions (see Figure 5).

In 2016, compared with 2015, the share of persons aged 0-59 years living in households with very low work intensity decreased in 20 EU Member States, most strongly in Malta (down 1.9 points) and Portugal (1.8 points). In Slovenia there was no change in this proportion, while in Romania, Bulgaria, Greece, and Finland increases of 0.6 points or less were observed, with larger increases in Luxembourg (up 0.9 points), Lithuania (1.0 points) and Italy (1.1 points).

Material deprivation

In 2016, 7.5 % of the population in the EU-28 were severely materially deprived

Material deprivation rates complement information on social exclusion by providing an estimate of the proportion of people whose living conditions are severely affected by a lack of resources. The severe material deprivation rate represents the proportion of people who cannot afford at least four of the nine following items:

  • having arrears on mortgage or rent payments, utility bills, hire purchase instalments or other loan payments;
  • being able to afford one week’s annual holiday away from home;
  • being able to afford a meal with meat, chicken, fish (or vegetarian equivalent) every second day;
  • being able to face unexpected financial expenses;
  • being able to buy a telephone (including mobile phone);
  • being able to buy a colour television;
  • being able to buy a washing machine;
  • being able to buy a car;
  • being able to afford heating to keep the house warm.

In the EU-28, 7.5 % of the population were severely materially deprived in 2016 (see Figure 6). The share of those severely materially deprived varied significantly among EU Member States, ranging from less than 2.0 % in Luxembourg and Sweden (as well as in Iceland and Switzerland) to more than one fifth in Greece and Romania and close to one third in Bulgaria; the severe material deprivation rate also reached 30.0 % in the former Yugoslav Republic of Macedonia.

Figure 6: Severe material deprivation rate, 2015 and 2016
(%)
Source: Eurostat (ilc_mddd11)


While the EU-28 severe material deprivation rate decreased by 0.6 points between 2015 and 2016, in some EU Member States there was an increase, most notably in Italy (up 0.6 points) and Romania (1.1 points). Increases in the range of 0.1 % to 0.3 % were reported for Estonia and Greece, as well as for all of the EFTA countries shown in Figure 6. While there was no change in the severe material deprivation rate between 2015 and 2016 in the Netherlands or Finland, the rate fell in 22 Member States, the decrease exceeding 2.0 points in Bulgaria (note that there is a break in series) and 3.0 points in Hungary, Latvia and Malta; the decrease was higher still in Serbia, reaching 4.5 points.

In 2016, 36.4 % of the population in the EU-28 could not afford unexpected financial expenses

One of the material deprivation items is facing unexpected expenses. This item measures the ability of a household to cover — from their own resources — an unexpected expense amounting to one twelfth of the poverty threshold. The amount varies between Member States and in 2016 was in the range from EUR 122 in Romania to EUR 1 691 in Luxembourg.

In 2016, 36.4 % of the EU-28 population reported difficulties in facing such unexpected expenses (see Figure 7), representing a decrease of 1.1 points compared with 2015. There are considerable variations between EU Member States for this indicator. The percentage of people reporting such difficulties in 2016 ranged from less than one quarter in Sweden, Malta, Luxembourg, the Netherlands, Austria and Denmark to more than half in eight Member States, peaking at 60.0 % in Latvia. Compared with 2015, the proportion of people reporting difficulties facing unexpected expenses increased the most in Romania (up 3.1 points), Slovakia (1.2 points), Finland (1.0 points), Sweden (0.9 points) and Bulgaria (0.8 points; note that there is a break in series); increases of 1.0 points or more were also observed in Norway and Serbia. Most EU Member States reported a decrease in the proportion of the population that reported difficulties in facing unexpected expenses, with this decrease close to or exceeding 4.0 points in Cyprus, the Czech Republic, Poland and Ireland, while in Estonia the proportion was down 5.1 points. One Member State stood out from the others for this indicator, as this proportion fell 21.4 points in Hungary, down from 72.2 % in 2015 to 50.8 % in 2016.

Figure 7: Proportion of the population unable to face unexpected financial expenses, 2015 and 2016
(%)
Source: Eurostat (ilc_mdes04)

Data sources

The data used in this section are primarily derived from data from EU statistics on income and living conditions (EU-SILC). The reference population is all private households and their current members residing in the territory of an EU Member State at the time of data collection; persons living in collective households and in institutions are generally excluded from the target population. The EU-28 aggregate is a population-weighted average of individual national figures.

Context

At the Laeken European Council in December 2001, European heads of state and government endorsed a first set of common statistical indicators for social exclusion and poverty that are subject to a continuing process of refinement by the indicators sub-group (ISG) of the social protection committee (SPC). These indicators are an essential element in the open method of coordination to monitor the progress made by the EU Member States in alleviating poverty and social exclusion. EU-SILC is the reference source for EU statistics on income and living conditions and, in particular, for indicators concerning social inclusion. In the context of the Europe 2020 strategy, the European Council adopted in June 2010 a headline target for social inclusion — namely, that by 2020 there should be at least 20 million fewer people in the EU who are at risk of poverty or social exclusion. EU-SILC is the source used to monitor progress towards this headline target, which is measured through an indicator that combines the at-risk-of-poverty rate, the severe material deprivation rate, and the proportion of people living in households with very low work intensity.

Persons at risk of poverty are those living in a household with an equivalised disposable income below the risk-of-poverty threshold, which is set at 60 % of the national median equivalised disposable income (after social transfers). The equivalised income is calculated by dividing the total household income by its size determined after applying the following weights: 1.0 to the first adult, 0.5 to each other household members aged 14 or over and 0.3 to each household member aged less than 14 years old.

The total number of people at risk of poverty or social exclusion is lower than the sum of the numbers of people in each of the three forms of poverty or social exclusion (namely at risk of poverty after social transfers (income poverty), severe material deprivation, or living in households with very low work intensity), as some persons are affected simultaneously by more than one of these situations.

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