- New research emphasises the importance of considering both household structure and employment patterns to understand poverty trends and policy challenges;
- Poverty in Europe cannot be effectively addressed by employment policies alone
- Targeting jobs towards hard-to-reach groups can significantly enhance poverty reduction strategies at both European and national levels;
- Relying solely on relative income poverty thresholds may not be sufficient for monitoring poverty.
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Persistent poverty has long puzzled Europe's policy-makers, who have been unable to explain why official poverty rates have remained 'stuck' over recent decades, even as employment participation has dramatically increased.
This reality has undermined the logic underpinning Europe's 2020 poverty policies: Namely, that there is an expectation that 'progress in increasing the employment rate helps to reduce poverty'.
A new comprehensive study published by researchers at the University of Oxford has provided a new perspective on this question, suggesting that changes in household structures and employment patterns may be key to understanding the phenomenon.
The research, published in the Journal of European Social Policy, examined the experience of a range of countries since the 1980s, drawing out several major implications for European policy.
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Lead author Leo Azzollini of the Institute for New Economic Thinking and Department for Social Policy Intervention, said that the findings had significant implications for social policy at the European level.
“At the European level, performance with respect to the central poverty and social exclusion target, framed in terms of the ‘at risk of poverty and social inclusion measure’ (AROPE), has not matched up to the success in increasing employment rates. This clashes with the stated goals of the Europe 2020 targets, based on the expectation that 'progress in increasing the employment rate helps to reduce poverty'
“Employment rates reached a peak before the outbreak of the Covid-19 pandemic, but the EU-AROPE 2020 target was not achieved, with the purely income-based at-risk-of-poverty rate stable or increasing in most member states from 2005. These poor results highlight how boosting employment rates is a necessary, but not sufficient, condition for mitigating poverty. Poverty has become more widespread even among the employed, especially for those households with only one salary and with children.
“Our findings suggest that the EU may get back on track to meeting its AROPE targets by focusing on two broad categories separately: On one hand, the working poor, or those who are considered poor even though there is at least one salary in the household. On the other hand, the non-working poor.
"While activating employment for the latter may be crucial on many levels, it may not be enough to lift them out of poverty, as demonstrated by the former. This may require ad-hoc policies to help workers and especially working parents.
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Explaining the results, co-author Richard Breen of Nuffield College, University of Oxford, said that the research helped disentangle and better understand household poverty.
“The research highlights importance of incorporating both household structure and employment patterns into analysis seeking to understand the forces driving trends in poverty and the challenges facing policy-makers.
“Focusing on specific negative features, or on changes in either structure or employment alone, may obscure the overall implications of long-term composition trends.
“Factors such as the quality of those jobs in pay terms and the capacity of the social protection system to reduce poverty among those out of work are also seen as important, but ways to target jobs more on these relatively hard-to-reach groups would contribute significantly to poverty reduction strategies at both European and national levels” he added.
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University of Oxford Professor Emeritus Brian Nolan, said that the findings had implications for Europe's reliance on purely relative income thresholds in monitoring poverty.
“Using relative income poverty thresholds is widely questioned in research and policy evaluation. This is reflected in widespread practice of also using complementary income poverty thresholds as ‘anchored’ at a point in time as well as non-monetary deprivation indicators, both included in the EU’s suite of social inclusion indicators."
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Data for this study was sourced from household surveys brought together in the Luxembourg Income Study (LIS) for the years 1986 (or closest available) and 2019 (or closest available) allowed the research team to cover the evolution of household structures and employment for a considerably longer time-span than would be permitted by other comparative micro datasets such as EU-SILC.
