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Intra-household inequality and adult material deprivation in Europe

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  • Karagiannaki, Eleni
  • Burchardt, Tania

Abstract

In most research on living standards, material deprivation is measured using household-level material deprivation indicators. However, if resources are not shared equally within households, conventional material deprivation indicators may mask important variations in individual living standards. In this paper we make use of individual adult-level deprivation data included in the 2014 European Union Statistics on Incomes and Living Conditions (EU-SILC) ad-hoc material deprivation module to examine the implications of intra-household inequality for material deprivation measurement. Results from a series of regression models which examine how adult deprivation indicators vary by various household and individual characteristics suggest that the share of total household income brought in by an individual (our proxy of individuals’ bargaining power within households) has a significant negative effect on the individual’s deprivation risk in most countries, pointing to the incomplete sharing of household resources. This is especially so in complex households (i.e. households containing adults other than a single person and any partner). Analysis of the distribution of adult deprivation outcomes within households shows that around 14 percent of all adults live in households where there is some inequality in the deprivation outcomes among their adult household members and this percentage is even higher in complex households (around 22 percent). The degree of within household deprivation inequality has a substantial effect on the overall level of deprivation in all countries: eliminating it and assuming that all adults in households where there is inequality in deprivation outcomes among their adult members are not deprived reduces the deprivation risk overall in all countries by 6 percentage points (which represents a more than 25 percent decrease). Using the Alkire-Foster adjusted headcount methodology we construct an index of multi-dimensional deprivation by treating household- and individual- level deprivation indicators as two separate dimensions of one overall measure. Decomposition of the index suggests that in the majority of countries the individual-level deprivation dimension contributes over 50 percent of the overall multi-dimensional deprivation index. This suggests that individual-level deprivation indicators can provide additional information about deprivation risk over and above household-level deprivation indicators and should be used as a separate dimension in the overall assessment of living standards.

Suggested Citation

  • Karagiannaki, Eleni & Burchardt, Tania, 2020. "Intra-household inequality and adult material deprivation in Europe," LSE Research Online Documents on Economics 121524, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:121524
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    File URL: https://researchonline.lse.ac.uk/id/eprint/121524/
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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