Archive:Income poverty statistics

Data from September 2008, most recent data: Further Eurostat information, Main tables and Database.

Graph 1: Inequality of income distribution, 2007 (1) (S80-S20 income quintile share ratio)

Favourable living conditions depend on a wide range of factors, which may be divided into those that are income-related and those that are not. The latter includes quality healthcare services, education and training opportunities or good transport facilities – aspects that affect everyday lives and livelihoods. The income distribution within a country provides a picture of inequalities. This article analyzes recent statistics on living conditions in the European Union (EU).

Main statistical findings

Graph 2: Relative median income ratio, 2007 (1)(ratio)

Graph 3: Relative median at-risk-of-poverty gap, 2007(%)

Table 1: At-risk-of-poverty rate by most frequent activity status, 2006 (1)(%)

Graph 4: At-risk-of-poverty rate, 2006(%)

Graph 5: At-risk-of-poverty rate after social transfers, by household type, EU-25, 2006 (1)(%)

Graph 6: At-risk-of-poverty rate after social transfers, people aged 65 and over, 2006(%)

Graph 7: People living in jobless households, by age, 2007 (1)(% of respective age group living in households where no-one works)

Graph 8: People living in jobless households, by gender, 2007 (1)(% of respective gender aged 18-59 who are living in households where no-one works)

In 2006, the 20 % of the EU-25 population with the highest equivalized disposable income received almost five times as much income as the 20 % of the population with the lowest equivalized disposable income. Within the Member States, the widest inequalities were recorded in Latvia (a ratio of 7.9) and Portugal (6.8). In contrast, the narrowest income inequalities were in the Nordic Member States, Bulgaria, the Czech Republic and Slovenia, with S80/S20 income quintile share ratios of between 3.4 and 3.6.

A comparison between the number of people on low incomes before social benefits other than pensions and those on low incomes after social benefits illustrates the redistributive effect of such benefits. In particular, the numbers illustrate how these benefits help alleviate the risk of poverty and reduce the percentage of population receiving a low income. (Note that old age pensions and survivors’ benefits are included in income both ’before’ and ’after’ social benefits).

In 2006, social transfers reduced the at-risk-of-poverty rate from 26 % before transfers for the EU-25 population to 16 % after transfers in 2006; as such, social transfers lifted 38 % of those in poverty above the poverty line. Social benefits other than pensions reduced the percentage of people at risk of poverty in all countries, but to very disparate degrees. The proportion of persons who were removed from being at risk of poverty by social transfers was smallest in some of the Mediterranean Member States Greece, Spain, and Italy, as well as Latvia and Bulgaria. Those countries whose social protection and support systems removed the threat of poverty from the highest proportion of people (over half) included Sweden, Denmark, Finland, the Czech Republic, the Netherlands, Slovenia and Germany.

Ageing population

With a growing proportion of the EU’s population aged over 65 and persistently low fertility rates, there are increasing concerns both about how Member States will be able to pay for the pension and healthcare costs linked to ageing, as well as increased poverty risks for the elderly. One can gauge the relative standard of living for the elderly by comparing the relative median equivalized disposable income of persons aged above 65 to the median equivalized disposable income of people aged below 65. Except for Poland, those aged over 65 had an average disposable income in 2006 less than those under 65. In Luxembourg, Hungary, Austria and Germany, the difference in incomes between these two age groups was less than 10 %. In 2006, in the majority of Member States, the difference between the equivalized disposable incomes of those aged 65 and over and those aged between 0 and 64 was between 10°% and 30°%. However, this widened to between 30 % and 35 % in Estonia, Ireland and Latvia, while in Cyprus, the median equivalized disposable income of those aged over 65 was only 57 % of that for persons aged under 65.

This relatively low level of income among pensioners in Cyprus was highlighted as a majority (52 %) of people over 65 in Cyprus were at risk of poverty in 2006. Some 31 % of people over 65 in Spain and 30 % in Latvia were at risk of poverty. In contrast, Hungary, Luxembourg, Poland, Slovakia, the Czech Republic and the Netherlands all reported shares of less than 10 %.

Other at-risk groups

The elderly and retired were not the only group living at risk of poverty in 2006. Across the population of the EU-25, an estimated 15 % of people aged 18 or older lived under the shadow of poverty, even after social transfers. The most vulnerable group were the unemployed (self-assessed most frequent activity status), about two-fifths (41 %) of whom were at risk of poverty, a share that rose to around 60 % in each of the Baltic Member States. Nearly a third (32 %) of single-parent households with dependent children were at risk of poverty across the EU-25 in 2006 - the highest proportion of any type of household covered by the survey. In contrast, multi-adult households without dependent children tended to be the households with the least risk of poverty. (Please note that the at-risk-of-poverty rate emphasizes a relative concept of income poverty, proportional to the level of income in one country, and does not take into account wealth or actual purchasing power; it also assumes that household members share their resources. Additionally, it is influenced by the equivalence scale chosen. In the future, the at-risk-of-poverty rate will be complemented by other poverty indicators.)

In 2007, some 9.3 % of the EU’s population aged between 18 and 59 lived in a jobless household; the proportion of children (up to 17 years of age) living in jobless households was almost at the same level (9.4 %). The highest proportion of children living in jobless households was recorded in the United Kingdom (16.7 %), followed by Hungary (14.0 %) and Belgium (13.5 %); these two Member States also recorded the highest shares of adults aged 18 to 59 years old living in jobless households, along with Poland. Note that these statistics may be affected by a number of factors, including differences in average numbers of children and inactivity rates between different socio-economic groups.

Data sources and availability

Eurostat's statistical indicators within the income and living conditions domain cover a range of topics relating to income poverty and social exclusion. One group of indicators relate to monetary poverty analyzed in various ways (for example, by age, gender and activity status), across space and over time. Another set relate to non-monetary poverty and social exclusion (for example, material deprivation, social participation) across space and over time. A newly developed set of child-care arrangement indicators complements the information in this domain.

From 2005, EU-SILC covered the EU-25 Member States, as well as Norway and Iceland. Bulgaria, Romania, Turkey and Switzerland launched EU-SILC at a later date. Note that Bulgaria and Romania currently provide indicators from national household budget surveys and that as such, these indicators are not fully harmonized.

The relative median income ratio is defined as the ratio of the median equivalized disposable income of people aged above 65 to the median equivalized disposable income of those aged below 65.

The at-risk-of-poverty rate is defined as the share of people with an equivalized disposable income that is below the at-risk-of-poverty threshold, set at 60 % of the national median equivalized disposable income. This rate may be expressed before or after social transfers, with the difference measuring the hypothetical impact of national social transfers in reducing poverty risk. Retirement and survivors' pensions are counted as income before transfers and not as social transfers. Various breakdowns of this indicator are calculated: by age, gender, activity status, household type, education level, etc. It should be noted that this indicator does not measure wealth but low current income (in comparison with other people in the same country) which does not necessarily imply a low standard of living.

The relative median at-risk-of-poverty gap is calculated as the difference between the median equivalised disposable income of people below the at-risk-of-poverty threshold and the at-risk-of-poverty threshold, expressed as a percentage of the at-risk-of-poverty threshold (cut-off point: 60 % of median equivalised income). The EU aggregate is a population weighted average of individual national figures. In line with decisions of the European Council, the at-risk-of-poverty rate is measured relative to the situation in each country rather than applying a common threshold to all countries.

The indicators related to jobless households (the share of children aged 0-17 and the share of adults aged 18-59 who are living in households where no one works) are calculated as the proportion of people of the specified age who live in households where no one is working. Students aged 18 to 24 who live in households composed solely of students of the same age class are counted neither in the numerator nor the denominator of the ratio; the data comes from the EU Labour force survey (LFS).

Context

Analysis of the distribution of incomes within a country provides a picture of inequalities. On the one hand, inequalities may create incentives for people to improve their situation through work, innovation or acquiring new skills, while on the other hand, crime, poverty and social exclusion are often linked to inequalities in income distribution.

Further Eurostat information

Publications

• 79 million EU citizens were at-risk-of-poverty in 2007, of whom 32 million were also materially deprived - Statistics in focus 46/2009
• The social situation in the European Union 2005-2006
• The life of women and men in Europe – A statistical portrait
• Living conditions in Europe - Statistical pocketbook - Data 2002-2005

Main tables

• Living conditions and welfare (t_livcon), see:

Income and living conditions (t_ilc)

Income distribution and monetary poverty (t_ilc_ip)

At-risk-of-poverty rate after social transfers by gender (tsisc030)

At-risk-of-poverty rate, by age group (tsdsc230)

At-risk-of-poverty rate, by household type (tsdsc240)

At-risk-of-poverty rate of elderly people (tsdde320)

In work at-risk-of-poverty rate (tsdsc320)

At-risk-of-poverty-rate, by highest level of education attained (tsdsc420)

At-risk-of-poverty rate before social transfers by gender (tsisc020)

Relative median at-risk-of-poverty gap (tsdsc250)

Inequality of income distribution (tsisc010)

Database

• Living conditions and welfare (livcon), see:

Income and living conditions (ilc)

Income distribution and monetary poverty (ilc_ip)

Monetary poverty (ilc_li)

At risk of poverty thresholds (ilc_li01)

At risk of poverty rates by age and gender (ilc_li02)

At risk of poverty rates by household type (ilc_li03)

At risk of poverty rates by most frequent activity in the previous year (persons over 16 years) (ilc_li04)

At risk of poverty rates by main source of income (ilc_li05)

At risk of poverty rates by work intensity of the household (ilc_li06)

At risk of poverty rates by education level (ilc_li07)

At risk of poverty rates by tenure status (ilc_li08)

At risk of poverty rates before social transfers (pensions included in social transfers) (ilc_li09)

At risk of poverty rates before social transfers (pensions excluded from social transfers) (ilc_li10)

Relative at risk of poverty gaps (ilc_li11)

At risk of poverty rates anchored at a point in time by gender and age (ilc_li20)

At persistent risk of poverty rates by gender and age (ilc_li21)

At-risk-of-poverty rate anchored at a fixed moment in time (2005) by age and gender (ilc_li22)

Distribution of income (ilc_di)

Distribution of income by quantiles (ilc_di01)

Distribution of income by different income groups (ilc_di02)

Mean and median income by age and gender (ilc_di03)

Mean and median income by household type (ilc_di04)

Mean and median income by most frequent activity status (ilc_di05)

Mean and median income by main source of income (ilc_di06)

Mean and median income by work intensity of the household (ilc_di07)

Mean and median income by education level (ilc_di08)

Mean and median income by accommodation tenure status (ilc_di09)

Mean and median income by ability to make ends meet (ilc_di10)

S80/S20 income quintile share ratio by gender and selected age group (ilc_di11)

Gini coefficient (ilc_di12)

In-work poverty (ilc_iw)

In-work at risk of poverty rates by age and gender (ilc_iw01)

In-work at risk of poverty rates by household type (ilc_iw02)

In-work at risk of poverty rates by work intensity of the household (ilc_iw03)

In-work at risk of poverty rates by education level (ilc_iw04)

In-work at risk of poverty rates by type of contract (ilc_iw05)

In-work at risk of poverty rates by months worked (ilc_iw06)

In-work at risk of poverty rates by full-/part-time work (ilc_iw07)

Dedicated section

• Living conditions and social protection

Other information

• Comparative EU Statistics on Income and Living Conditions: Issues and Challenges]

External links

• OECD statistics - Income distribution - Inequality (country-by-country comparisons)

See also

• Social inclusion statistics