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Household Work Intensity and the Adequacy of Social Protection in the EU

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  • Bea Cantillon
  • Natascha Van Mechelen
  • Olivier Pintelon
  • Aaron Van den Heede
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    Abstract

    This working paper explores how the poverty reduction capacity of social security evolved in the ‘booming’ years leading up to the current economic crisis. The question to arise is whether and, if so, why social protection provides an explanation for, on the one hand, disappointing poverty trends in many of the EU15 and, on the other, declining poverty risks in Ireland and most of the new Member States. To what extent are these trends connected with expanding labour markets and evolutions in pre-transfer poverty on the one hand and the volume and efficiency of cash benefits deployed on the other? Relying on ECHP, SILC and SOEP data, the paper presents and discusses empirical indications of shifts in the pro-poorness and in the adequacy of cash benefits and the mechanisms underlying such trends. We find that in the nineties the adequacy of social transfers declined significantly in the traditional strongest welfare states in the Nordic countries. Conversely, the clusters of the Southern States in the nineties and of the new Member States in the 2000s displayed a significant increase of poverty reduction by social transfers. During the first years of the crisis the poverty reducing impact of social transfer systems in Europe seems to have been on the decline in the Nordic Countries, on the Continent as well as in the East. The most important conclusion to be drawn is the striking – and in many countries rising – inadequacy of social protection for individuals living in households with a low work intensity. This points at the tension between the adequacy of income protection and activation lending credence to the notion that policies have sought to raise employment at least partially by reducing reservation wages.

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    Bibliographic Info

    Paper provided by Herman Deleeck Centre for Social Policy, University of Antwerp in its series Working Papers with number 1204.

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    Date of creation: Apr 2012
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    Handle: RePEc:hdl:wpaper:1204

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    Web page: http://www.centreforsocialpolicy.eu
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    Keywords: at-risk-of-poverty rate; cash benefits; ECHP; EU-SILC; in-work poverty; poverty reduction; SOEP; work poor households;

    This paper has been announced in the following NEP Reports:

    References

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    1. Joachim R. Frick & Kristina Krell, 2010. "Measuring Income in Household Panel Surveys for Germany: A Comparison of EU-SILC and SOEP," SOEPpapers on Multidisciplinary Panel Data Research 265, DIW Berlin, The German Socio-Economic Panel (SOEP).
    2. Atkinson, Anthony B & Micklewright, John, 1991. "Unemployment Compensation and Labor Market Transitions: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 29(4), pages 1679-1727, December.
    3. Kenworthy, Lane, 2008. "Jobs with Equality," OUP Catalogue, Oxford University Press, number 9780199550609.
    4. Heady, Christopher & Mitrakos, Theodore & Tsakloglou, Panos, 2001. "The Distributional Impact of Social Transfers in the European Union: Evidence from the ECHP," IZA Discussion Papers 356, Institute for the Study of Labor (IZA).
    5. Koen Caminada & Kees Goudswaard & Olaf Van Vliet, 2010. "Patterns of Welfare State Indicators in the EU: Is there Convergence?," Journal of Common Market Studies, Wiley Blackwell, vol. 48, pages 529-556, 06.
    6. Natascha Van Mechelen & Sarah Marchal & Tim Goedemé & Ive Marx & Bea Cantillon, 2011. "The CSB-Minimum Income Protection Indicators dataset (CSB-MIPI)," Working Papers 1105, Herman Deleeck Centre for Social Policy, University of Antwerp.
    7. Kenworthy, Lane, 2011. "Progress for the Poor," OUP Catalogue, Oxford University Press, number 9780199591527.
    8. Michael Förster & Peter Whiteford, 2009. "How much Redistribution do Welfare States Achieve? The Role of Cash Transfers and Household Taxes," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, vol. 7(3), pages 34-41, October.
    9. Barr, Nicholas, 1992. "Economic Theory and the Welfare State: A Survey and Interpretation," Journal of Economic Literature, American Economic Association, vol. 30(2), pages 741-803, June.
    10. Frank Vandenbroucke & Bea Cantillon & Natascha Van Mechelen & Tim Goedemé & Anne Van Lancker, 2012. "The EU and Minimum Income Protection: Clarifying the Policy Conundrum," Working Papers 1205, Herman Deleeck Centre for Social Policy, University of Antwerp.
    11. Marx, Ive & Marchal, Sarah & Nolan, Brian, 2012. "Mind the Gap: Net Incomes of Minimum Wage Workers in the EU and the US," IZA Discussion Papers 6510, Institute for the Study of Labor (IZA).
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    Cited by:
    1. Bea Cantillon & Natascha Van Mechelen, 2013. "Poverty reduction and social security: Cracks in a policy paradigm," Working Papers 1304, Herman Deleeck Centre for Social Policy, University of Antwerp.

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