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Evolutions in Consumption Inequality and Poverty in Greece: The Impact of the Crisis and Austerity Policies

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  • Georgia Kaplanoglou
  • Vassilis T. Rapanos

Abstract

Greece is the country hit hardest by the crisis and subsequent fiscal consolidation strategies, suffering a cumulative output loss of about 30 percent since 2008. The present paper presents evidence that along with declining average living standards, consumption inequality has seriously grown, fueled primarily by a disproportionate drop in the consumption levels of what can be considered the middle class. Although poverty has not significantly risen in relative terms, it climbs to around 45 percent once the poverty threshold is anchored to pre‐crisis levels. Furthermore, significant indirect tax hikes have further increased inequality in consumption expenditure. The paper also shows that several reforms launched in the name of reducing labor costs, broadening the tax base or rationalizing the targeting of social benefits have had detrimental effects on one of the most vulnerable population groups, namely families with children, thus implying that the social consequences of the crisis will be long‐lasting.

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  • Georgia Kaplanoglou & Vassilis T. Rapanos, 2018. "Evolutions in Consumption Inequality and Poverty in Greece: The Impact of the Crisis and Austerity Policies," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 64(1), pages 105-126, March.
    • Handle: RePEc:bla:revinw:v:64:y:2018:i:1:p:105-126
    DOI: 10.1111/roiw.12287
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    Cited by:

    1. Eirini Andriopoulou & Eleni Kanavitsa & Panos Tsakloglou, 2019. "Decomposing Poverty in Hard Times: Greece 2007-2016," Revue d’économie du développement, De Boeck Université, vol. 27(2), pages 125-168.
    2. Anastasia PANORI & Yannis PSYCHARIS, 2018. "The impact of the economic crisis on poverty and welfare in Athens," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 48, pages 23-40.
    3. Canale, Rosaria Rita & Liotti, Giorgio & Marani, Ugo, 2019. "Structural public balance adjustment and poverty in Europe," Structural Change and Economic Dynamics, Elsevier, vol. 50(C), pages 227-236.
    4. Milanovic, Branko, 2020. "After the financial crisis: the evolution of the global income distribution between 2008 and 2013," MPRA Paper 101560, University Library of Munich, Germany.
    5. Klaus Gründler & Niklas Potrafke, 2019. "Ideologically-charged terminology: austerity, fiscal consolidation, and sustainable governance," CESifo Working Paper Series 7613, CESifo.
    6. Efi Drimili & Ζoi Gareiou & Efthimios Zervas, 2020. "Public perceptions of the concept of green growth: application in Athens, Greece, during a period of economic crisis," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 22(7), pages 6053-6076, October.

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