Reducing AROPE in the EU: combining minimum income, minimum wages, and employment expansion

Nearly one in five people in the EU was at risk of poverty or social exclusion in 2024. The European Pillar of Social Rights (EPSR) set the target of lifting 15 million people out of poverty and social exclusion by 2030. In this analysis, prepared in support of the European Commission's Anti-Poverty Strategy, we use EUROMOD to simulate the individual and joint impact of minimum income reform, minimum wage increases, and employment expansion on poverty and social exclusion across all EU Member States. Using 2024 as a baseline, we construct counterfactual scenarios for 2030, and draw three main conclusions. First, a reform package combining the three instruments, the so-called implementation scenario, would surpass the EPSR target and lift 18.5 million people out of poverty and social exclusion. An acceleration scenario, extending minimum income coverage to all households in poverty, lifts 55 million and reduces income poverty to 1.5%. Second, policy interactions are sizable: the combined effect is roughly one-fourth smaller than the sum of individual instruments, primarily because employment and wage gains raise the at-risk-of-poverty threshold. Third, even after virtually eliminating income poverty, 37 million people (8.2%) remain at risk of social exclusion, driven by persistent material deprivation and low work intensity that income and employment instruments cannot fully address.