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Income, Deprivation and Economic Strain in the Enlarged European Union

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Author Info

  • Christopher T. Whelan

    (Economic and Social Research Institute (ESRI))

  • Bertrand Maître

    (Economic and Social Research Institute (ESRI))

Abstract

At risk of poverty indicators based on relative income measures suggest within the enlarged EU that societies located at quite different points on a continuum of affluence have similar levels of poverty. Substantial differences in levels of income between societies do not in themselves invalidate this approach. However, the relative income approach fails to capture the fact that between economic cluster differences in life-style deprivation are sharper at lower income levels. Support for the argument relating to restricted reference groups is found in relation to the contrast between the twelve most affluent EU countries and all others. The limitations of relative income poverty lines have little to do with the process of enlargement as such. Instead the major problem involves the weak association between income and deprivation in the more affluent countries. However, as a consequence of such difficulties, such indicators do not provide entirely meaningful comparisons of levels of disadvantage across economic clusters. The current analysis, rather than supporting the alternative of a focus on absolute income or an EU wide poverty line, suggests that we should take the argument for adopting a multidimensional approach to the measurement of poverty more seriously.

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File URL: http://www.esri.ie/UserFiles/publications/20070109172722/WP164.pdf
File Function: First version, 2005
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Bibliographic Info

Paper provided by Economic and Social Research Institute (ESRI) in its series Papers with number WP164.

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Length: 31 pages
Date of creation: Nov 2005
Date of revision:
Handle: RePEc:esr:wpaper:wp164

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Related research

Keywords: Relative income; deprivation; economic strain; reference groups;

References

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  1. Jesus Perez-Mayo, 2005. "Identifying deprivation profiles in Spain: a new approach," Applied Economics, Taylor & Francis Journals, vol. 37(8), pages 943-955.
  2. Caroline Dewilde, 2004. "The Multidimensional Measurement of Poverty in Belgium and Britain: A Categorical Approach," Social Indicators Research, Springer, vol. 68(3), pages 331-369, September.
  3. Pasi Moisio, 2004. "A Latent Class Application to the Multidimensional Measurement of Poverty," Quality & Quantity: International Journal of Methodology, Springer, vol. 38(6), pages 703-717, December.
  4. Nolan, Brian & Whelan, Christopher T., 1996. "Resources, Deprivation, and Poverty," OUP Catalogue, Oxford University Press, number 9780198287858.
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Cited by:
  1. Christopher T. Whelan, 2007. "Understanding the Implications of Choice of Deprivation Index for Measuring Consistent Poverty in Ireland," Papers WP181, Economic and Social Research Institute (ESRI).

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