Study on imperfections in the area of microfincance and options how to address them through an EU financial instrument
The distribution of wealth between households - Research note 11/2013 by Eva Sierminska with Márton Medgyesi
(2013) This research note examines wealth-holding information collected by the new Household Finance and Consumption Survey (HFCS) managed by the European Central Bank (ECB), the first results of which were published in April 2013.
First, it compares the extent of inequality in holdings of wealth against the extent of inequality of income, and discusses how this varies across countries.
Next, wealth inequality is decomposed into different components, in order to try to identify the main factors underlying the results.
In the next part of the research note, the division between liquid and illiquid wealth is examined and compared across household types. This is of considerable importance in respect of the ability to maintain consumption in the event of a drop in income. It is, therefore, a significant factor that should be taken into account when assessing the effects of the crisis on living standards.
In the following section, the timing of the data collection is considered and possible impacts are discussed. Since the survey was carried out at different times in different countries, the substantial variations that have occurred in recent years in both house-price and stock-market indices are likely to have had a major effect on the measurement of wealth and its distribution between households within countries, as well as between countries. This needs to be taken explicitly into account in any analysis.
In the final section, income as recorded by the ECB survey is compared with that recorded by EU-SILC. This is done by first reviewing the differences in the collection methodology and then by comparing the distribution of gross household income and its components.
Access of mobile EU citizens to social protection - Research note 10/2013 by Márton Medgyesi and Péter Pölöskei
(2013) This paper investigates how receipt of welfare benefits differs between natives and mobile EU citizens in EU countries, on the basis of data from EU-SILC 2011. The analysis focuses on differences in receipt of non-contributory benefits (such as family benefits, housing benefits, poverty relief, etc.), although differences in the receipt of unemployment benefit are also considered.
A rough comparison shows welfare use to differ between natives and migrants in several cases. To sort out pure composition effects, multivariate statistical analysis (probit regressions) of benefit receipt (education, unemployment, disability, housing, family-related transfers and transfers to combat social exclusion) was carried out for 18 countries with specifications that controlled for age, gender, education, household type and labour-market status. The analysis shows that, for most benefits (unemployment, education, social exclusion), the differences between natives and mobile EU citizens are small and statistically insignificant in most of the countries. Higher benefit receipt among mobile EU citizens was found only in the case of housing benefit in a few countries. On the other hand, it seems that in most of the EU, being a mobile EU citizen is associated with a lower probability of receiving family and child-related benefits. The results contribute to a more balanced interpretation of the “welfare magnet” hypothesis, according to which generous welfare systems are important factors that substantially affect the numbers and composition of migrants.
The coverage rate of social benefits - Research note 9/2013 by Manos Matsaganis, Erhan Ozdemir and Terry Ward
(2013) There are a significant number of people on very low incomes in the EU despite a social security system which is intended in most countries to prevent the income of families from falling below an acceptable level. This Research Note first examines the number of people involved across the EU, focusing on those with income below 60% of the median, which is conventionally taken as the at-risk-of-poverty threshold in the Union and trying to identify among this group those likely to be in need of income support. It then explores the extent to which the people concerned are covered by social benefits of the different types and how this varies according, in particular, whether they are employed or not. A second part focuses specifically on unemployment benefits, how far the unemployed are in receipt of payments according to their previous employment characteristics and how far these might explain non-coverage given the conditions applying to entitlement to benefits in the different countries. Evidence on the extent of non-take-up of benefits is also examined.
The indirect costs of long-term care - Research note 8/2013 by Ricardo Rodrigues, Katharine Schulmann, Andrea Schmidt, Niki Kalavrezou and Manos Matsaganis
(2013) Informal care remains the most important source of care for dependent older people, although there are strong country differences across Europe. Most informal carers are either of working age (mostly daughters or daughters-in-law) or older people themselves providing care to their dependent spouses. From the public budget perspective, informal care is often seen as a cost-effective way of providing care. This vision, however, fails to acknowledge the indirect costs of informal care, namely forgone employment or health for informal carers.
The research note presented here provides an overview of existing research into the effects of caring on the employment and health of carers, and into the benefits already available to carers in Europe. These include care services, cash benefits and leave for carers.
The impact of the financial crisis on unmet needs for healthcare - Research note 7/2013 by Ricardo Rodrigues, Eszter Zólyomi, Niki Kalavrezou and Manos Matsaganis
(2013) This research note provides analysis of the trends in unmet needs for healthcare before and during the recent financial and economic crisis. Specifically, it aims to explore the extent to which there has been an increase in unmet needs due to affordability and unavailability of services, and to identify vulnerable social groups. For the purposes of this analysis, we selected those EU countries that have been most affected by the crisis: Ireland, Greece, Spain, Italy, Cyprus, Latvia, Portugal and Slovenia. Our analysis is based on the EU-SILC and concerns unmet needs for medical examination or treatment. The research note also examines the scope and composition of out-of-pocket payments for healthcare among the older population (50+) prior to the crisis, using data from the Survey of Health, Ageing and Retirement in Europe (SHARE). The research note likewise discusses the potential effects of the financial crisis on health and provides an overview of healthcare reforms and cost-containing measures implemented since the beginning of the crisis in the eight selected countries.
Accounting for growth - Research note 6/2013 by Márton Medgyesi
(2013) This research note considers two recommendations made by the Stiglitz, Sen and Fitoussi report for improving the measurement of social progress. One is that people’s living standards are better approximated by measures of household income than by measures of a country’s economic performance, such as GDP. The other is to take account of the distribution of income in the measurement of social progress. This research note describes growth in household income and distributional patterns of income change during 2006–2008 and 2008–2010, based on micro-data from household surveys.
Women and men in the crisis - Research note 5/2013 by Erhan Ozdemir, Fadila Sanoussi and Terry Ward
(2013) The crisis has continued to have a differential effect on different sectors of economic activity and as a result, a continuing effect on the employment of men and women. Initially, therefore, the main effect of the recession in 2008 and 2009 was on manufacturing and construction, leading to large-scale job losses in many countries. Over more recent years, the response to the crisis of governments virtually throughout the EU has been to reduce employment in the public sector, the growth of which offset the decline elsewhere in the economy in the recession years. The concern here is to examine the extent to which employment has risen or fallen in the different broad sectors and how this has affected men and women.
The cost of poverty - Research note 4/2013 by Erhan Ozdemir and Terry Ward
(2013) Many of the people of working age at risk of poverty in the EU are not in employment. This Research Note, first, examines the extent to which their income would rise above the at-risk-of-poverty threshold if they were in paid work and, secondly, the gain to public finances as a result of the reduction in social expenditure on transfers and increased taxes that this would give rise to. The focus is on those aged 20-59 and it considers men and women who are economically inactive as well as those recorded as being unemployed, in the sense of both being available for work and actively looking for work, distinguishing those who for the most part are likely to be capable of working and willing to do if jobs were available from those who are not.
The implications of an EMU unemployment insurance scheme for supporting incomes - Research note 3/2013 by H. Xavier Jara and Holly Sutherland
(2013) EMU level to improve the income protection available to the unemployed and their families. The benefit is designed to be additional to existing national provision where this falls short in terms of eligibility (coverage) and the amount payable. The “EMU-UI” has a common design across countries, which is intended to reduce the extent of current gaps in coverage where these are sizeable due to stringent eligibility conditions, to increase generosity where current unemployment benefits are low relative to earnings and to extend duration where this is shorter than 12 months. Our analysis compares the extent of the effect of these improvements across selected countries from the Monetary Union (Germany, Estonia, Greece, Spain, France, Italy, Latvia, Austria, Portugal and Finland) using EUROMOD to simulate entitlement to the national and EMU-UIs and to calculate the effect on household disposable income. We find that the EMU-UI reduces the risk of poverty for the new unemployed and has a positive effect on income stabilisation. The extent of these effects varies in size across countries for two main reasons: notable differences in design of national unemployment insurance schemes and differences in labour force characteristics across countries, mainly in the proportion of self-employed workers who are typically not covered by national schemes. In countries such as France and Finland there is little effect of EMU-UI on poverty risk and stabilisation, while Greece, Italy and Latvia benefit the most, in particular from the EMU proportional scheme. Our analysis highlights potential areas of future research in terms of improving the design of the EMU-UI and accounting for national or EMU level ways of financing, as well as refinements to the methodology used to assess the effects of transitions to unemployment.