European Neighbourhood Policy - East - living conditions statistics

Data extracted in April 2021.

Planned article update: March 2022.

Highlights

Georgia’s inequality of income has fallen from 2009 to 2019 but is still greater than the EU.

Belarus and Moldova reported lower at-risk-of-poverty rates after social transfers in 2019 than were observed for the EU.

Among the European Neighbourhood Policy-East countries, Georgia, Armenia and Moldova reported higher levels of income inequality in 2019 than in the EU.

[[File:ENPE21_Population_at_risk_of_poverty_after_transfers_2009-2019.xlsx]]

Proportion of the population at risk of poverty after transfers, 2009-2019

This article is part of an online publication; it presents information on a range of statistics covering living conditions for the European Union (EU) and six countries that together form the European Neighbourhood Policy-East (ENP-East) region: Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine. Data shown for Georgia exclude the regions of Abkhazia and South Ossetia over which Georgia does not exercise control and the data shown for Moldova exclude areas over which the government of the Republic of Moldova does not exercise control. The latest data for Ukraine generally exclude the illegally annexed Autonomous Republic of Crimea and the City of Sevastopol and the territories which are not under control of the Ukrainian government (see specific footnotes for precise coverage).

The article includes information relating to income distribution, the risk of poverty (before and after social transfers), as well as data relating to health and social protection expenditure. These statistics are used to observe living conditions and to formulate and monitor social policies.

Full article

Income distribution

The income quintile share ratio, also known as the S80/S20 ratio, is a measure of the inequality of income distribution. It is calculated as the ratio of the total income received by the 20 % of the population with the highest incomes (the top quintile) to that received by the 20 % of the population with the lowest incomes (the bottom quintile). Incomes are equivalised to take account of the varying composition of households.

Figure 1 shows that, Armenia, Georgia and, to a lesser extent, Moldova reported more pronounced levels of inequality in 2019, based on the income quintile share measure, than the three other ENP-East countries. These reported a more equal income distribution than the EU, with the lowest ratio recorded in Azerbaijan where the income of the top population quintile was 2.6 times as high as the income of the bottom population quintile. Between 2009 and 2019, the income quintile share ratio fell very strongly in Georgia and to a lesser extent in Moldova, while it increased slightly in Armenia and Azerbaijan.

The income of the top population quintile in the EU was 5.1 times the size of the cumulative income of the bottom population quintile in 2018 (2019 data not yet available), a slight increase in the ratio to that observed in 2009 (4.9 %).

Figure 1: Inequality of income distribution (income quintile share ratio), 2009 and 2019
(ratio)
Source: Eurostat (enpe_ilc_di11) and (ilc_di11)

The Gini coefficient is an alternative measure of income inequality. It shows the extent to which all incomes within the population differ from the average income: the closer the coefficient is to 100 the less equal are the incomes, while the closer it is to 0 the more equal are the incomes.

As was observed for the income quintile share ratio, Armenia, Moldova and Georgia reported greater income inequality than the EU measured by the Gini coefficient in 2019, while Belarus and Ukraine reported lower values. Belarus and the Ukraine reported near unchanged levels of income inequality, as measured by the Gini coefficient, in both years shown in Figure 2 (although there is a break in the Belarus data series). Armenia reported a rise in inequality under this measure. Georgia and Moldova reported increased equality between the years shown.

In the EU, the Gini coefficient in 2019 was 31, showing a slight increase over the value in 2009.

Figure 2: Gini coefficient, 2009 and 2019
(ratio)
Source: Eurostat (ilc_di12)

Monetary poverty

The poverty threshold shown in Table 1 is set at 60 % of the national median equivalised disposable income (after social transfers). The total net income of each household is calculated by adding together the income received by all the members of the household from all sources. For each person, the equivalised total net income is calculated as the household’s total net income divided by the equivalised household size. This is generally based on the modified OECD scale: a weight of 1.0 for the first adult, 0.5 for other persons aged 14 or over who are living in the household and 0.3 for each child aged less than 14. Note that some ENP-East countries use different scales for calculating the equivalised household size. The poverty threshold is shown as a monthly income, ranging among the ENP-East countries from the equivalent of EUR 55 in Georgia (based on consumption rather than income) to EUR 140 in Belarus in 2019.

The at-risk-of-poverty rate is the proportion of the population with an equivalised disposable income below the at-risk-of-poverty threshold. This indicator can be calculated both before and after social transfers, the difference reflecting the proportion of the population moved above the threshold as a result of receiving social transfers. Social transfers cover the social help given through benefits such as: old-age and survivors’ (typically widows’ and widowers’) pensions; unemployment, family-related, sickness and invalidity, education-related and other benefits; housing allowances; and social assistance.

As the poverty threshold is set independently for each country, at-risk-of-poverty indicators reflect low incomes in comparison with other residents of the same country. This does not necessarily imply an absolute low standard of living for all those below the threshold. Data concerning the at-risk-of-poverty rate before transfers are available for three ENP-East countries, Armenia, Belarus and Moldova, all of which reported rates below that of the EU — see Table 1.

Among the ENP-East countries for which the at-risk-of-poverty rate after social transfers is available for 2019, only in Belarus (10.9 %) and Moldova (12.9 %) was the at-risk-of-poverty rate lower than in the EU, where 43.7 % of the population had been at risk of poverty before taking account of social transfers but 16.5 % after transfers.

Table 1: Poverty main indicators, 2019
Source: Eurostat (ilc_li02), (ilc_li09), (ert_bil_eur_a), (enpe_ilc_li09) and (enpe_ilc_li01)

In all of the ENP-East countries for which data are shown in Figure 3 the proportion of the population at risk of poverty fell between 2009 and 2019. The proportion of the EU population at risk of poverty after transfers had the same value in 2010 (2009 not available) and 2019 at 16.5 %, although the rate had reached as high as 17.5 % in 2016.

Figure 3: Proportion of the population at risk of poverty after transfers, 2009 and 2019
(%)
Source: Eurostat (enpe_ilc_li01) and (ilc_li02)


Health and social protection expenditure

Expenditure on health concerns current expenditure on health and investment, regardless of the source of funds. It covers curative and rehabilitative care (in-patient care, day cases, out-patient and home care); services of long-term nursing care (in-patient, day cases and home care); ancillary services to health care; medical goods dispensed to out-patients; services of prevention and public health; health administration and health insurance.

Social protection expenditure comprises social protection benefits, administration costs and other expenditure: the data shown in Table 2 generally only concern benefits, although administrative costs are included for Georgia. Social benefits consist of transfers, in cash or in kind, by social protection schemes to households and individuals to relieve them of the burden of a defined set of risks or needs, on the basis that there is neither a simultaneous reciprocal nor an individual arrangement involved. The list of risks or needs is defined as: sickness/health care; disability; old-age; survivors; family/children; unemployment; housing; and other social exclusion. Note that not all health expenditure falls within social protection expenditure.

The level of expenditure on health relative to gross domestic product (GDP) was identified separately among the ENP-East countries in 2019 only by Belarus, at 4.2 %.

Figure 4: Expenditure on health, social protection benefits and pensions, 2019
(% of GDP)
Source: Eurostat (hlth_sha11_hp), (nama_10_gdp) and (spr_exp_sum)

Total expenditure on social protection benefits as a proportion of GDP ranged in reporting ENP-East countries in 2019 from 14.1 % in Belarus, having been 13.5 % in 2009, to 6.7 % in Georgia (2009: 2.6 %). In Armenia, social protection benefits expenditure fell from 9.6 % in 2009 to 6.9 % in 2019. In 2018, total expenditure on social protection benefits in the EU was equivalent to more than one quarter (26.7 %) of GDP, whereas it had been 27.5 % in 2009.

Expenditure on pensions accounted for just under half of the total expenditure on social protection benefits in the EU in 2018. This share was above 50 % in the three ENP-East countries for which data are available for a common reference year.


Table 2: Expenditure on health, social protection benefits and pensions, 2009 and 2019
(% of GDP)
Source: Eurostat (hlth_sha11_hp), (nama_10_gdp), (spr_exp_sum) and (spr_exp_pens)

Data sources

The data for ENP-East countries are supplied by and under the responsibility of the national statistical authorities of each country on a voluntary basis. The data result from an annual data collection cycle that has been established by Eurostat. These statistics are available free of charge on Eurostat’s website, together with a range of additional indicators for ENP-East countries covering most socio-economic topics.

EU statistics on income and living conditions (EU-SILC) is an instrument that aims to collect timely and comparable data on income, poverty, social inclusion and living conditions, in both monetary and non-monetary terms. The data are generally collected for private households and household members. EU-SILC provides both cross-sectional data and longitudinal data, typically over a four-year period. The legal basis for this data collection exercise is Regulation (EU) 2019/1700 of the European Parliament and of the Council of 10 October 2019 establishing a common framework for European statistics relating to persons and households, based on data at individual level collected from samples. It is supported by a series of implementing regulations and special data collection modules that relate to the collection of secondary variables on a less regular basis. Eurostat’s website provides an overview of legislation related to EU-SILC.

The European system of integrated social protection statistics (ESSPROS) is a common framework developed within the European statistical system (ESS) that has been designed to provide a coherent comparison across European countries (27 EU Member States plus Iceland, Norway, Switzerland, Serbia and Turkey) of social benefits to households and their financing, in terms of precisely defined risks or needs that refer to the ESSPROS functions: disability, sickness/health care, old-age, survivors, family/children, unemployment, housing and social exclusion. The legal basis for the data collection exercise is provided by Regulation (EC) No 458/2007 of the European Parliament and of the Council on the European system of integrated social protection statistics (ESSPROS). ESSPROS is composed of a core system that contains annual data from 1990 onwards on (gross) expenditures and receipts. In addition to the core system, one module on pension beneficiaries and one on net social benefits data are available.

Tables in this article use the following notation:

Value in italics     data value is forecast, provisional or estimated and is therefore likely to change;
: not available, confidential or unreliable value;
not applicable.

Context

Social protection systems are generally well-developed in the EU: they are designed to support people to some degree facing the risks and needs associated with unemployment, parental responsibilities, sickness/health care and invalidity/disability, the loss of a spouse or parent, old-age, housing and other forms of social exclusion.

The policy framework for social protection and social inclusion aims to reduce poverty and social exclusion, increase employment and address the specific situation of young people. The social investment policy measures aim to address Europe’s current challenges:

  • Economic crisis – unemployment and poverty and social exclusion levels have reached record highs. They are a huge drain on Europe's human resources at a time when public budgets are under pressure.
  • Demographic changes – the working-age population in Europe is shrinking, while the proportion of older people is growing. Solutions must be found to ensure sustainable and adequate social protection systems.

The European Commission’s Social Investment Package, Towards Social Investment for Growth and Cohesion – including implementing the European Social Fund 2014-2020 (COM(2013) 83 final), addresses these issues by:

  • guiding EU countries in using their social budgets more efficiently and effectively to ensure adequate and sustainable social protection.
  • seeking to strengthen people’s current and future capacities, and improve their opportunities to participate in society and the labour market.
  • focusing on integrated packages of benefits and services that help people throughout their lives and achieve lasting positive social outcomes.
  • stressing prevention rather than cure, by reducing the need for benefits. That way, when people do need support, society can afford to help.
  • calling for investing in children and young people to increase their opportunities in life.

These measures to develop Member States’ social protection systems work through the open method of coordination (OMC), an inter-governmental voluntary process used to support common objectives through cooperation, peer reviews and Commission surveillance.

Policies are, in 2021, under review through the European Semester process.

On 18 November 2015, the High Representative for Foreign Affairs and Security Policy and the European Commission jointly presented a review of the European Neighbourhood Policy (SWD(2015) 500 final) which set out a revised approach for the EU in relation to its eastern and southern neighbours, based on stabilising the region in political, economic, and security-related terms. In March 2020, the European Commission presented a joint policy proposal for Eastern Partnership policy beyond 2020: Reinforcing Resilience - an Eastern Partnership that delivers for all. This is intended to succeed the 2015 review of the European Neighbourhood Policy.

In cooperation with its ENP partners, Eurostat has the responsibility ‘to promote and implement the use of European and internationally recognised standards and methodology for the production of statistics, necessary for developing and monitoring policy achievements in all policy areas’. Eurostat undertakes the task of coordinating EU efforts to increase the statistical capacity of the ENP countries. Additional information on the policy context of the ENP is provided here.

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Population and social conditions (enpe_pop)
Living conditions (enpe_livcon)
Income distribution (enpe_incom)
Relative poverty (enpe_pov)
Social and health expenditure (enpe_sh_exp)
People at risk of poverty or social exclusion (Europe 2020 strategy) (ilc_pe)
Income distribution and monetary poverty (ilc_ip)
Living conditions (ilc_lv)
Social protection expenditure (spr_expend)