ANALYSING INTERGENERATIONAL INFLUENCES ON INCOME POVERTY AND ECONOMIC VULNERABILITY WITH EU-SILC

ABSTRACT

The European Union Statistics of Income and Living Conditions (EU-SILC) 2005 wave includes a special module on inter-generational transmission of poverty. In addition to the standard data relating to income and material deprivation, information relating to parental background and childhood circumstances was collected for all household members aged over 24 and less than 66 at the end of the income reference period. In principle, the module provides an unprecedented opportunity to apply a welfare regime perspective to a comparative European analysis of the relationship between poverty and social exclusion and parental characteristics and childhood economic circumstances. In this paper, we seek to exploit such potential. In pursuing this objective, it is necessary to take into account some of the limitations of the data. We do by restricting our attention to a set of countries where data issues seem less extreme. Finally, we compare findings from one dimensional and multidimensional approaches to poverty and social exclusion in order to provide an assessment of the extent to which our analysis of welfare regime variation provides a coherent account of the intergenerational transmission of disadvantage.

Keywords:

• poverty
• intergenerational transmission
• welfare regimes
• economic vulnerability
• EU-SILC
• social class

Acknowledgements

The authors would like to acknowledge the comments of two anonymous referees. They would also like to acknowledge funding from funding under the Economic Change, Quality of Life Social Cohesion (EQUALSOC) Network and the Growing Inequalities Impacts (GINI) projects funded by the European Commission(DG Research) as part of the Sixth and Seventh Framework programmes.

Notes

¹In register countries (DK, FI, IS, NL, NO, SE, SI), a sample of persons (called selected respondent) are drawn first before selecting their corresponding household. Only the selected respondent is interviewed while household and income variables are collected either through register or through the selected respondent.

²We have explored the use of alternative class schemas in order to ensure that our conclusions are not dependent on the particular categorisation we have employed.

³Issues of reliability rise in relation to recollection of such information. Random errors will lead our estimates of the impact of this variable to be biased downwards. We have no reason to believe that such error will have a systematic effect on our estimates of differences between welfare regimes.

⁴Although the latter is less true of Ireland.

⁵This threshold comes very close to that which would identify the same number of people as are located with an EU-wide ‘at risk of poverty’ measure set at 60% of median income. In that sense it can be setting an EU deprivation threshold. This approach differs from some earlier attempts to measure economic vulnerability that have employed an entirely relative measure of deprivation.

⁶See Whelan and Maître (2008a).

⁷Earlier implementations of this approach include Whelan and Maître (2005a, b). The current approach adds these early efforts in terms of the choice of indicators and in taking advantage of the opportunities offered by EU-SILC to develop a European wide analysis based on adequate national samples.

⁸This threshold comes very close to that which would identify the same number of people as are located with an EU-wide ‘at risk of poverty’ measure set at 60% of median income. In that sense it can be setting an EU deprivation threshold. This approach differs from some earlier attempts to measure economic vulnerability that have employed an entirely relative measure of deprivation.

⁹For a more detailed discussion of the procedure see McCutcheon and Mills (1998).

¹⁰Standards have been calculated to take into account the clustering of individuals within households.