Living conditions in Europe - poverty and social exclusion




Data extracted in : October 2019

Planned article update : October 2020

Highlights

In 2018, 21.7 % of the EU population — or some 109 million people — was at risk of poverty or social exclusion.

The risk of poverty or social exclusion in the EU was higher for women than for men (22.3 % compared with 19.9 % in 2018).

Almost half (45.8 %) of the EU population living in single person households with dependent children was at risk of poverty or social exclusion in 2018.


People at risk of poverty or social exclusion by type of risk, EU-28, 2018
(million persons)
Source: Eurostat (ilc_pees01), (ilc_peps01)


This article is part of a set of statistical articles set of statistical articles that formed Eurostat’s flagship publication, Living conditions in Europe — 2018 edition . Each article helps provide a comprehensive and up-to-date summary of living conditions in Europe, presenting some key results from the European Union’s (EU’s) statistics on income and living conditions (EU-SILC) , which is conducted across EU Member States, EFTA and candidate countries .

Full article

General overview


In recent years, Eurostat has invested considerable resources in developing a set of indicators that are designed to reach ’ Beyond GDP ’, thereby providing a more inclusive analysis of economic, social and environmental aspects of progress. Indeed, economic indicators such as gross domestic product (GDP) were not designed to be comprehensive measures of prosperity and well-being. With this in mind, a range of indicators have been developed which help to provide information to address global challenges for the 21st century — poverty, quality of life, health, climate change and resource depletion. This article addresses poverty and its impact on living conditions.

Inclusive growth is one of three priorities of the Europe 2020 strategy (the other two concern smart and sustainable growth). The headline target for social inclusion in the EU is to lift at least 20 million people out of poverty or social exclusion by 2020. Progress towards this target is monitored through Eurostat’s indicator for those ’at risk of poverty or social exclusion’, abbreviated as AROPE.

The risk of poverty and social exclusion is not dependent strictly on a household’s level of income, but may also reflect joblessness, low work intensity , working status, or a range of other socio-economic issues. The number or share of people who are at risk of poverty or social exclusion combines three separate measures and covers those persons who are in at least one of these three situations:

  • persons who are at risk of poverty, in other words, with an equivalised disposable income that is below the at-risk-of-poverty threshold,
  • persons who suffer from severe material deprivation, in other words, those who cannot afford at least four out of nine predefined material items that are considered by most people to be desirable or even necessary to lead an adequate quality of life,
  • persons (aged 0 to 59) living in a household with very low work intensity, in other words, those living in households where adults worked no more than 20 % of their full work potential during the past year.


Key findings


In 2018, an estimated 21.7 % of the EU-28 population — or some 109.2 million people — was at risk of poverty or social exclusion .

The results presented in this article confirm that the risk of poverty or social exclusion was greater across the EU-28 among women (rather than men), young adults (rather than middle-aged persons or pensioners), people with a low level of educational attainment (rather than those with a tertiary level of educational attainment) and people with longstanding health limitations.

  • Almost half of the EU-28 population living in single person households with dependent children were at risk of poverty or social exclusion in 2018, while the risk of poverty or social exclusion also increased among those households inhabited by nuclear families with more than two children,
  • Working status is unsurprisingly one of the main socio-economic characteristics that impacts upon the risk of poverty or social exclusion. In 2018, while the risk of poverty or social exclusion in the EU-28 was 11.4 % for employed persons , this rose to close to two thirds (64.9 %) for those persons who were unemployed and stood at 43.0 % for other inactive persons (those who chose, for whatever reason, not to work),
  • The risk of poverty or social exclusion varies considerably between the EU Member States, but also within individual Member States. For example, in some Member States — predominantly in eastern or southern Europe — the risk of poverty or social exclusion was higher in rural areas than it was in urban areas ( cities or towns and suburbs ), whereas in many western and northern Member States it was more common to find poverty or social exclusion concentrated in urban areas.
  • The persistent risk of poverty is considered an even greater problem — in much the same way as long-term unemployment — as it is inherently linked to a disproportionately higher risk of social exclusion. The persistent at-risk-of-poverty rate shows the proportion of people who were below the poverty threshold and had also been below the threshold for at least two of the three preceding years. This is of interest insofar as it allows a longitudinal analysis of whether the risk of poverty is transitory in nature (shared among various members of society) or whether it is a more structural phenomenon (whereby an unlucky few are found to be persistently poor). The persistent at-risk-of-poverty rate was more prevalent among the population living in single person households, particularly those with dependent children (many of these households are characterised by income levels that are persistently below the poverty threshold). On average, more than one fifth (21.9 %) of single-parent households in the EU-28 was at persistent risk of poverty in 2018.


Poverty and social exclusion


Almost one in four Europeans was at risk of poverty or social exclusion

In 2018, there were an estimated 109.2 million people in the EU-28 at risk of poverty or social exclusion, which was equivalent to 21.7 % of the total population. At risk of poverty or social exclusion, abbreviated as AROPE, corresponds to the sum of persons who are either at risk of poverty, or severely materially deprived or living in a household with a very low work intensity. This indicator is based on the number of persons who are either (i) at risk of poverty (as indicated by their disposable income); and/or (ii) face severe material deprivation (as gauged by their ability to purchase a set of predefined material items); and/or (iii) live in a household with very low work intensity. Having peaked at 123.8 million in 2012, the number of persons who were at risk of poverty or social exclusion in the EU-28 fell during six consecutive years. There was an overall reduction of 8.2 million (including Croatia) in relation to the number of people who were at risk of poverty or social exclusion during this period (see Figure 1).

Figure 1: People at risk of poverty or social exclusion, 2008-2018
(EU-28, million persons)
Source: Eurostat (ilc_peps01)



The profile of Europeans at risk of poverty or social exclusion

Women, young adults, those with a low level of educational attainment experienced or limitations in activities due to health problems, and unemployed persons had, on average, a greater risk of poverty or social exclusion than other members of the EU-28 population in 2018 (see Figure 2).

Figure 2: People at risk of poverty or social exclusion by socio-economic characteristic, 2018
(% share of the total population)
Source: Eurostat (ilc_peps01), (ilc_peps02) and (ilc_peps04)


By gender, the risk of poverty or social exclusion in the EU-28 was higher for women (aged 18 and over) than it was for men (22.3 % compared with 19.9 %).


There were notable differences when analysing the risk of poverty or social exclusion by age

In 2018, the highest risk (28.2 %) was recorded for young adults (aged 18-24 years) in the EU-28, while the lowest risk (18.3 %) was recorded for people aged 65 and over.

The risk of poverty or social exclusion was 20.4 % for people aged 25-49 years and 22.4 % among the population aged 50-64 years (perhaps reflecting, among others, the increased risk of health issues or difficulties that some older members of the labour force have, making it more difficult to find work if they are unemployed). In addition, younger persons had a high risk, 24.0 % was recorded for those aged less than 18 years.


Health limitations are a noteworthy determinant of differences in the risk of poverty or social exclusion

People in the EU-28 who are severely limited in activities because of health problems have a significantly higher risk of poverty or social exclusion (34.8 %) than persons without limitations (19.2 %). For persons with some health-induced activity limitation the risk recorded was 26.2 %.


Besides age and level of activity limitation, educational attainment also has a considerable impact on the risk of poverty or social exclusion within the EU-28

In 2018, more than 3 out of every 10 (33.6 %) persons aged 18 and over with a low level of educational attainment (ISCED levels 0-2) were at risk of poverty or social exclusion, compared with 10.7 % of people in the same age group with a high level of educational attainment (ISCED levels 5-8). The corresponding percentage of people with a medium level of educational attainment (ISCED levels 3-4) was 20.3 %.


Those persons who are unemployed face a particularly high risk of poverty or social exclusion

At EU-28 level, close to two thirds (64.9 %) of the unemployed aged 18 and over were at risk of poverty or social exclusion. Other inactive persons faced the second-highest risk with 43.0 %. For comparison, the share among those in employment was 11.4 %.


Almost one quarter of the population living in households with dependent children were at risk of poverty or social exclusion

In 2018, almost one quarter (22.3 %) of the EU-28 population living in households with dependent children was at risk of poverty or social exclusion. This rate varied considerably across the EU Member States, from highs of 33.9 % in Romania and 33.5 % in Greece down to 11.9 % in Slovenia and 11.4 % in Czechia (see Table 1 ).

Table 1: People at risk of poverty or social exclusion by household type, 2018
(% share of total population)
Source: Eurostat (ilc_peps03)


Households without children faced less risk of poverty or social exclusion than households with dependent children

On average, the population living in households without children faced less risk of poverty or social exclusion — 21.0 % across the EU-28 in 2018 — when compared with the population living in households with dependent children (22.3 %). A closer analysis reveals that this pattern was repeated in just 13 of the EU Member States; with the risk of poverty or social exclusion particularly concentrated among people living in households with children in Spain and the United Kingdom (difference respectively of 6.1 pp and 6.3 pp, 2017 data for the latter). By contrast, the risk of poverty or social exclusion was higher for people living in households without children in 14 EU Member States, including each of the Baltic and Nordic Member States . In Estonia and Latvia, the risk of poverty or social exclusion among those persons living in households without children was 15.6 and 14.3 pp higher than the risk faced by people living in households with children.


People living in single-parent households constitute a particularly vulnerable group

In 2018, almost half (45.8 %) of single-parent households in the EU-28 faced the risk of poverty or social exclusion. Among the EU Member States, this rate ranged between 65.9 % in Ireland (2017 data) and 28.9 % in Slovenia.


The risk of poverty or social exclusion was higher for larger family units

The risk of poverty or social exclusion was generally higher for the population living in larger family units. The risk for people living in a household composed of two adults with three or more dependent children averaged 29.3 % across the EU-28 in 2018, which was 7.0 pp higher than the average for all households with children. This pattern was repeated for all of the EU Member States.

In 2018, almost one third (31.6 %) of the EU-28 population living alone (single person households) faced the risk of poverty or social exclusion. In 5 Member States this rate exceeded 50.0 % in 2018 (Latvia 57.2 %, Estonia 57.0 %, Lithuania 56.2 % and Croatia 52.7 %), while a peak of 58.4 % was recorded in Bulgaria. In 6 Member States — namely Latvia, Slovenia, Estonia, Bulgaria, Lithuania and Croatia — the risk of poverty or social exclusion was higher for the population living in single person households than it was for people living in single-parent households.

Among the different types of household covered in Table 1, the lowest risk of poverty or social exclusion was recorded for people living in households composed of two adults with one dependent child — a rate of 15.3 % across the EU-28 in 2018. Among the EU Member States, the range was between 29.6 % in Greece and 7.9 % in Finland; an even lower rate was recorded in Norway (6.9 %).


More than a quarter of the EU-28 population living in rural areas was at risk of poverty or social exclusion

Aside from socio-demographic factors, the risk of poverty or social exclusion is also affected by the degree of urbanisation .

Figure 3: People at risk of poverty or social exclusion by degree of urbanisation, 2018
(% share of the total population)
Source: Eurostat (ilc_peps01) and (ilc_peps13)


Figure 3 reveals that almost one quarter (23.3 %) of the EU-28 population living in rural areas was exposed to the risk of poverty or social exclusion in 2018. For comparison, the risk was somewhat lower for people living in cities (22.1 %), while the lowest risk was recorded for the population living in towns and suburbs (19.8 %).

A more detailed analysis shows contrasting patterns among the EU Member States concerning the impact that urbanisation had on the risk of poverty or social exclusion. In the majority of western European countries, the risk of poverty or social exclusion was most pronounced in cities; this was true for eleven Members States, ranging from 11.3 pp ("cities" - "rural areas") in Austria, 10.1 pp in Belgium to 0.4 pp in Czechia. By contrast, the risk of poverty or social exclusion was particularly concentrated among rural populations in Romania and Bulgaria (26.9 pp and 23.1 pp respectively).

In 2018, the highest risks of poverty or social exclusion in cities were recorded in Greece (30.5 %), Italy (29.2 %) and Belgium (28.8 %).

By contrast, the risk of poverty or social exclusion for rural populations was highest in Bulgaria and Romania, as both reported that almost half of their rural population faced such risks. As well as Bulgaria (47.4 %) and Romania (45.5 %), around one third of the rural populations of Lithuania (35.4 %), Greece (35.2 %), Latvia (32.3 %), Croatia (31.0%) and Spain (31.0 %) faced the risk of poverty or social exclusion in 2018.

The risk of poverty or social exclusion for those people living in towns and suburbs was often situated between the fringes recorded for rural areas and cities. However, in Cyprus (28.3 %), Luxemburg (25.1 %), Ireland (24.1 %, 2017 data) and Czechia (12.9 %) people living in towns and suburbs faced a higher risk of poverty or social exclusion than the remainder of the population.


Component indicators which contribute to an analysis of the risk of poverty or social exclusion

Figure 4 provides an analysis for the EU-28 population of the various risks of poverty or social exclusion. Among the 109.2 million inhabitants within the EU-28 that faced the risk of poverty or social exclusion in 2018, some 6.5 million lived in households experiencing simultaneously all three poverty and social exclusion risks. There were 14.0 million people in the EU-28 living both at risk of poverty and in a household with very low work intensity; 9.6 million were at risk of poverty and at the same time severely materially deprived; 1.8 million lived in households with very low work intensity while experiencing severe material deprivation.

Figure 4: People at risk of poverty or social exclusion by type of risk, EU-28, 2018
(million persons)
Source: Eurostat (ilc_pees01)


However, the majority of the EU-28 population living at risk of poverty or social exclusion experienced only one of the three individual criteria: there were 54.8 million persons who were exclusively at risk of poverty, 11.6 million who faced severe material deprivation and 10.9 million that lived in households with very low work intensity.

The information shown in Figure 5 confirms that monetary poverty — in other words, those people at risk of poverty — was the most widespread form of poverty and social exclusion, with 16.9 % of the EU-28 population at risk of poverty in 2018 (to a smaller extent combined with one or both of the other two risks). Some 5.8 % of the EU-28 population faced severe material deprivation in 2018 (either as a single risk or combined with living in a household with very low work intensity), while 9.0 % of the EU-28 population lived in households with very low work intensity.

Figure 5: People at risk of poverty or social exclusion by type of risk, 2018
(% share of the total population)
Source: Eurostat (ilc_li02) and (ilc_pees01)


Monetary poverty

The at-risk-of-poverty rate provides information for the monetary dimension of poverty and social exclusion; it shows the proportion of the population that has an income level below the national at-risk-of-poverty threshold.

Figure 6: At-risk-of-poverty rate and at-risk-of-poverty threshold, 2018
(% / thousand PPS)
Source: Eurostat (ilc_li02) and (ilc_li01)


In 2018, one fifth or more of the total population was at risk of poverty in Romania (23.5 %), Latvia (23.3 %), Lithuania (22.9 %), Bulgaria (22.0 %), Estonia (21.9 %), Spain (21.5 %) and Italy (20.3 %), while at the other end of the scale less than 10 % of the population was at risk of poverty in Czechia (9.6 %).

At-risk-of-poverty thresholds may, in theory, be set at any arbitrary level. In the EU, the threshold set at 60 % of the national median equivalised income is widely accepted. Note that such thresholds do not measure wealth or poverty per se. They rather provide information on relative levels of income below which the population is considered to have low income. In countries with high living standards it does not necessarily imply a very low standard of living or quality of life. Poverty thresholds are usually expressed in terms of purchasing power parities (PPPs) to allow cross-country comparisons to be made, as these adjust for price level differences between EU Member States.

In 2018, the national 60 % at-risk of poverty income thresholds for a single person ranged from a high of PPS 19 197 in Luxemburg down to PPS 4 343 in Bulgaria and PPS 3 745 in Romania. The poverty thresholds in Switzerland and Norway were also particularly high at PPS 16 141 and PPS 15 832.

Table 2: At-risk-of-poverty rate by age group, 2018
(% share of specific population)
Source: Eurostat (ilc_li02)


Among the adult population, elderly people — defined here as aged 65 and over — were found to be in general among the least affected members of society in relation to their exposure to the risk of poverty. The at-risk-of-poverty rate among elderly people in the EU-28 was 15.6 % in 2018. The age group 25 to 49 years showed even lower exposure to the risk of poverty with 15.3 %. The highest risk of poverty was recorded for young adults — defined here as those aged 18-24 years — almost a quarter (22.4 %) of which were at risk of poverty (Table 2).
The at-risk-of-poverty rate before and after deducting housing costs

Housing costs include those costs associated with living somewhere (for example, rental payments, mortgage interest payments, or the cost of repairs), utility costs that result from the use of a dwelling (such as water or electricity charges), and other local taxes/charges.

Housing costs often account for a considerable proportion of a household’s disposable income and rising housing costs are often cited as one of the key factors that impact on the share of the population that is affected by monetary poverty.

A comparison of the at-risk- of-poverty rate before and after deducting housing costs is shown in Figure 7; it reveals that the share of the EU-28 population that was at risk of poverty in 2018 rose from 16.9 % (before deducting housing costs) to reach 31.2 % (after deducting housing costs). As such, the share of the EU-28 population that was at risk of poverty almost doubled when taking account of housing costs.

Figure 7: At-risk-of-poverty rate - before and after - deducting housing costs, 2018
(% share of total population)
Source: Eurostat (ilc_li02) and (ilc_li48)


The impact of housing costs varies considerably both between and within EU Member States (for example, somebody who chooses to live in central Paris may expect to spend a considerably larger proportion of their income on housing costs than someone who chooses to live in Perpignan, Rennes or Strasbourg).

Across the EU Member States, the relative impact of housing on poverty was particularly pronounced in Czechia, Denmark, Greece, Hungary, the Netherlands, the United Kingdom (2017 data), Finland and Germany, where the at-risk-of-poverty rate more than doubled in 2018 after deducting housing costs.

By contrast, many of the eastern and southern EU Member States were characterised by housing costs having a relatively low impact on the risk of poverty. This may be attributed, at least in part, to lower house prices, utility prices and residential taxes and to a higher percentage of home ownership (without a mortgage).


The impact of social transfers on monetary poverty

Social protection measures, such as social benefits, are an important means for tackling monetary poverty. By comparing at-risk-of-poverty rates before and after social transfers it is possible to make an assessment of the effectiveness of welfare systems (see Figure 8).

Figure 8: At-risk-of-poverty rate - before and after - social transfers, 2018
(% share of total population)
Source: Eurostat (ilc_li02) and (ilc_li10)


In 2018, social transfers reduced the at-risk-of poverty rate for the EU-28 population from 25.6 % (before social transfers, pensions excluded) to 16.9 %, bringing the rate down by 8.7 pp.

Social transfers had a particularly large impact on poverty reduction in 2018 in Hungary (12.2 pp), Sweden (12.5 pp), the United Kingdom (13.6 pp, 2017 data), Finland (13.9 pp) and Ireland (17.3 pp, 2017 data), where the at-risk-of-poverty rate fell by more than 12 pp after social transfers; this pattern was repeated in Norway (13.8 pp).

The impact of social transfers was much less significant in Spain, Slovakia (2017 data), Romania and Greece, as at-risk-of-poverty rates were reduced by less than 5.0 pp.

At-risk-of-poverty rate anchored at a specific point in time

Given the at-risk-of-poverty rate is calculated on the basis of poverty thresholds that change from one year to the next (reflecting changes to the overall level of income and its distribution between different socio-economic groups), care needs to be taken when interpreting poverty developments over time, especially during periods of rapid economic change.

A more reliable measure for monitoring developments over time is the at-risk-of-poverty rate anchored at a specific point in time and adjusted for inflation.

On this basis, the at-risk-of-poverty rate anchored in 2008 went down across the EU-28 between 2008 and 2018, on average, by 1.2 pp. The situation varied between EU Member States, with the impact of the global financial and economic crisis apparent in several southern EU Member States that drove the rate up — namely Italy by 5.1 pp, Spain (5.7 pp), Cyprus (9.6 pp) and Greece with 24.8 pp (see Map 1 ).

Map 1: At-risk-of-poverty rate anchored in 2008, 2008-2018
(percentage points difference, 2018 minus 2008)
Source: Eurostat (ilc_li22b)


The persistent at-risk-of-poverty rate

The persistent at-risk-of-poverty rate shows the proportion of people with a level of income below the poverty threshold in both the reference year as well as at least two out of the three preceding years. Thus, this indicator captures those members of society who are particularly vulnerable to the persistent risk of poverty over relatively lengthy periods of time. The rationale behind this indicator is based on the fact that the chances for a household to recover or be lifted out of poverty falls the longer it remains below the at risk of poverty threshold.

In 2018, there was a higher persistent risk of poverty among the population living in single person households. On average, more than one fifth (21.9 %) of the EU-28 population living in single-parent households was at persistent risk of poverty, while 18.2 % of the population living in single person households faced similar risks of persistent poverty (see Table 3 ); both of these figures were considerably higher than the risk of persistent poverty recorded for people living in households with two or more adults (irrespective of whether or not they had children). The lowest persistent at-risk-of poverty rate — 6.3 % in the EU-28 — was recorded for households composed of two or more adults without dependent children.

Table 3: Persistent at-risk-of-poverty rate by household type, 2018
(% share of total population)
Source: Eurostat (ilc_li23)


Among the EU Member States, 59.1 % of all people living in single-parent households in Lithuania (2017 data), over 40 % in Malta and one third in Italy faced a persistent risk of poverty in 2018. Among those people who were living on their own in single person households, persistent at-risk-of-poverty rates were particularly high in Estonia (48.1 %) and Latvia (44.1 %).

Persistent at-risk-of-poverty rates were generally lower for people living in households composed of two or more adults without dependent children than they were for people living in households composed of two or more adults with dependent children. This pattern was repeated in 2018 across a majority of the EU Member States; Denmark, the United Kingdom (2017 data), Slovenia, Germany, Cyprus, Estonia, Latvia and Croatia were the only exceptions.

In households composed of two or more adults with dependent children, the persistent at-risk-of-poverty rate peaked in 2018 at 27.2 % in Romania, while the next highest rates (within the range of 16 % - 19 %) were recorded in Spain (18.7%), Italy (17.5 %) and Greece (16.0 %).

Source data for tables and graphs

Data sources

The data used in this section are primarily derived from data from EU statistics on income and living conditions (EU-SILC) . EU-SILC is carried out annually. It is the main survey that measures income and living conditions in Europe, and is the main source of information used to link different aspects relating to the quality of life at the household and individual level. 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 aggregate is a population-weighted average of individual national figures.

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