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Mountains on the move: recent trends in national and EU-wide income dynamics in old and new EU Member States

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  • Tim Goedemé
  • Diego Collado
  • Leen Meeusen

Abstract

In European poverty research, poverty is usually measured with a poverty line defined as a percentage of the national median income. However, for grasping trends in social cohesion in the European Union (EU), and identifying options and pitfalls for social policy initiatives at the EU level, EU-wide income differences are at least as important as national income differences. Therefore, in this paper we document recent trends in national and EU-wide income poverty dynamics. We analyse to what extent household incomes have converged in the EU and how this has impacted upon poverty dynamics using both national and EU-wide poverty lines, before and during the current economic crisis. We pay particular attention to disentangling the contribution of both ‘old’ and ‘new’ EU Member States to EU-wide poverty dynamics. For doing so, we make use of four waves of EU-SILC data (2005-2011), the EU reference source for information on income and living conditions in Europe. We find that poverty dynamics using national and EU-wide poverty lines have evolved very differently in the period 2005-2011. Whereas national poverty stagnated during 2005-2009, mainly due to substantial increases in median incomes, EU-wide poverty substantially decreased in the same period. In contrast, although income poverty has increased between EU-SILC 2009 and EU-SILC 2011 when measured with national poverty lines, the crisis seems to have halted, but not (yet) substantially reversed the convergence trend of the lowest incomes in the EU towards the EU-wide median income. Finally, we find that when the new Member States joined the EU in 2004, poverty measured with a pan-European poverty threshold was predominantly a problem of the Eastern European EU Member States, whereas by the end of the period EU-wide poverty is at least as much a problem of low incomes of part of the population living in the EU15.

Suggested Citation

  • Tim Goedemé & Diego Collado & Leen Meeusen, 2014. "Mountains on the move: recent trends in national and EU-wide income dynamics in old and new EU Member States," ImPRovE Working Papers 14/05, Herman Deleeck Centre for Social Policy, University of Antwerp.
  • Handle: RePEc:hdl:improv:1405
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    References listed on IDEAS

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    1. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-766, May.
    2. Caroline Dewilde, 2004. "The Multidimensional Measurement of Poverty in Belgium and Britain: A Categorical Approach," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 68(3), pages 331-369, September.
    3. Caroline Dewilde, 2008. "Individual and institutional determinants of multidimensional poverty: A European comparison," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 86(2), pages 233-256, April.
    4. 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.
    5. Iacovou, Maria & Kaminska, Olena & Levy, Horacio, 2012. "Using EU-SILC data for cross-national analysis: strengths, problems and recommendations," ISER Working Paper Series 2012-03, Institute for Social and Economic Research.
    6. Andrea Brandolini, 2007. "Measurement of income distribution in supranational entities: the case of the European Union," Temi di discussione (Economic working papers) 623, Bank of Italy, Economic Research and International Relations Area.
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    Cited by:

    1. Tim Goedemé & Lorena Zardo Trindade & Frank Vandenbroucke, 2017. "A Pan-European Perspective on Low-Income Dynamics in the EU," Working Papers 1703, Herman Deleeck Centre for Social Policy, University of Antwerp.

    More about this item

    Keywords

    poverty; inequality; convergence; divergence; Europe; EU-SILC; social cohesion; EU;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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