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GINI DP 15: Can higher employment levels bring down poverty in the EU?

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Author Info

  • Ive Marx

    ()
    (Centre for Social Policy, University of Antwerp)

  • Pieter Vandenbroucke

    ()
    (Centrum voor Sociaal Beleid, Herman Deleeck, Universiteit Antwerpen)

  • Verbist, G. (Gerlinde)
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Abstract

At the European level and in most EU member states, higher employment levels are seen as key to better poverty outcomes. But what can we expect the actual impact to be? Up until now shift-share analysis has been used to estimate the impact of rising employment on relative income poverty. This method has serious limitations. We propose a more sophisticated simulation model that builds on regression based estimates of employment probabilities and wages. We use this model to estimate the impact on relative income poverty of moving towards the Europe 2020 target of 75 percent of the working aged population in work. Two sensitivity checks are included: giving priority in job allocation to jobless households and imputing low instead of estimated wages. This article shows that employment growth does not necessarily result in lower relative poverty shares, a result that is largely consistent with observed outcomes over the past decade.

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Bibliographic Info

Paper provided by AIAS, Amsterdam Institute for Advanced Labour Studies in its series GINI Discussion Papers with number 15.

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Date of creation: Oct 2011
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Handle: RePEc:aia:ginidp:15

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  1. Marloes Graaf-zijl & Brian Nolan, 2011. "GINI DP 5: Household Joblessness and its Impacts on Poverty and Deprivation in Europe," GINI Discussion Papers, AIAS, Amsterdam Institute for Advanced Labour Studies 5, AIAS, Amsterdam Institute for Advanced Labour Studies.
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