Melancolía

Thus far we have restricted our attention to cross-sectional income poverty risk. However, one of the major opportunities offered by the ECHP data set is that it allows us to take advantage of its longitudinal nature to calculate and make use of measures of the persistence of poverty risk. Here we wish to take advantage of the possibility of introducing a temporal dimension in order to improve our understanding of the relationship between income poverty risk and deprivation.

In our subsequent analysis, we define persistent risk of income poverty in a dichotomous way as involving falling below sixty percent of equivalized median income in at least three out of four years, the last year included. Once again we remind the reader that in some cases we had to adjust this procedure. For Austria we have only three years of data and so we define persistent risk of poverty as being at risk of poverty in at least two out of three years. The absence of appropriate deprivation information for Germany, Luxembourg and the UK in the fourth wave means that it is necessary for us to adopt the same strategy for these countries. Finally Finland is excluded from our analysis since we have there only two years of observations.

In Figure 7.2 we show the relationship between degree of exposure to income poverty risk and extent of deprivation. In particular, we show the percentage reporting that they lack three or more basic deprivation items broken down by number of times at-risk-of poverty. In general there is a clear and striking relationship between degree of exposure to income poverty risk over time and exposure to basic deprivation. Belgium provides a good example of the generally monotonic relationship. Among those who entirely avoid income poverty risk only six percent lack three or more basic deprivation items. This percentage rises to 11 percent for those at risk of income poverty on one occasion to 22 percent for those at risk of poverty on two occasions before peaking at 48 percent for those at risk of poverty in at least three out of four years. Ireland provides a similar example

Table 7.6: Levels of deprivation regarding health condition, social contact and satisfaction of individuals below 60% of median income in 1996

% General Chronic Membership Meeting Financial Housing Economic health health people situation situation strain

problems satisfact. satisfact.

B 10 21 68 13 53 19 29 DK 12 42 44 5 30 12 23 D 13 32 59 9 61 24 21 EL 15 26 94 2 93 59 83 E 14 25 83 2 77 31 62 F 11 29 84 16 70 16 40 IRL 7 26 73 1 63 26 52 I 14 14 88 8 82 44 42 L 16 35 74 16 56 13 35 NL 5 25 65 2 46 15 36 A 15 32 62 12 49 13 39 P 39 38 92 19 90 45 67 FIN 10 38 56 4 60 27 36 UK 13 42 63 5 51 22 35

with a steady rise in the percentage deprived from 7 to 20 to 29 and finally 41 percent. There are some minor deviations from this pattern of steady increase, but they do little to detract from the striking regularity of the overall pattern. Of course the starting points are very different. In Greece and Portugal, even among those who have entirely avoided income poverty risk, just less than one in two experience an enforced absence of at least three items. Apart from Spain and Italy, where the figure is respectively one in four and one in six, in no other country does it rise above 11 percent.

Figure 7.2: Basic deprivation (3+ items) by number of years at-risk-of poverty (60% line)

P EL E F IRL I UK B DK D L NL A 0 10 20 30 40 50 60 70 80 90 100

Never at risk 1 year 2/2+ years 3+ years

Among the three poorest Southern European countries the numbers lacking three or more basic deprivation items among those at risk of income poverty exceeds two-thirds in all cases, ranging from 73 percent in Spain to 91 percent in Greece. The same is true for Italy with 68 percent. These countries are followed by France with a level of 52 percent. For the UK and Belgium the rate is close to one in two. Germany, the Netherlands, Austria and Luxembourg report percentages in the thirties. Those at persistent risk of income poverty in Denmark, who constitute a much smaller proportion of the population of that country than in other countries, are also distinctive in the low levels of basic deprivation they report: only 10 percent lack three or more items.

In Figure 7.3, we look at the corresponding relationship to secondary deprivation. While the levels of deprivation are lower, the relationship is equally clear. Among those who entirely avoid the risk of income poverty, only in Portugal does the relevant statistic rise above 20 percent and in eight of the thirteen countries it does not exceed two percent. In every country the level of secondary deprivation rises with exposure to income poverty risk and displays its highest value among those at persistent risk of poverty. The highest levels of deprivation in this category are observed in Portugal, Spain and Greece where the respective percentages are 56, 39 and 25 percent. Ireland, Belgium and Germany are found in the range of 30 percent. The figure for Italy, Austria and France is somewhat lower at around 10 percent. Finally, there is a group of countries that display extremely low levels of secondary deprivation with the rate never exceeding six percent. These comprise Denmark, the Netherlands and the UK.

In Figure 7.4 we look at the relationship between increasing exposure to the risk of income poverty and experiencing economic strain which is defined as being in a household that is having a great or a good deal of difficulty in making ends meet. Once again the number of times one has been exposed to the risk of income poverty proves to be a powerful predictor. France provides a very good example. Economic strain is at its lowest among those who have entirely avoided the risk of income poverty with a reported rate of 11 percent. This figure rises to 28 percent for those at risk of poverty on one occasion and to 34 percent for those at risk of poverty on two occasions. Finally it peaks at 41 percent for those in a state of persistent risk of poverty, i.e. on at least three out of four occasions. Among those who have avoided exposure to income poverty risk the highest rates of economic strain are found predictably in Greece, Portugal and Spain with rates respectively of 45, 31 and 24 percent. After these three countries, the next highest rate (15 percent) is found in Ireland. Among those in a state of persistent risk of poverty, those in Greece, Portugal and Spain again report the highest rates of strain ranging from 87 to 68 percent. The next highest rates are observed in Ireland, Italy and France, with rates of 58, 48 and 41 percent respectively. They are followed by a group of countries comprising Austria, the UK and Belgium, where the level of strain reported is around one in three. For Denmark and Luxembourg, it approximates one in four. Finally the lowest level of close to one in seven is found in Germany47

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Figure 7.3: Secondary deprivation (3+ items) by number of years at-risk-of poverty (60% line)

P EL E F IRL I UK B DK D L NL A 0 10 20 30 40 50 60 70 80 90 100

Never at risk 1 year 2/2+ years 3+ years

Figure 7.4: Economic strain by number of years at-risk-of poverty (60% line)

P EL E F IRL I UK B DK D L NL A 0 10 20 30 40 50 60 70 80 90 100

Never at risk 1 year 2/2+ years 3+ years

(47

) For further discussion, see Whelan, C.T. et al (forthcoming) ”Persistent Income Poverty and Deprivation in the European Union”, Journal of Social Policy, 32.1