European Approaches to Poverty and Social Exclusion

1
European Approaches to Poverty and Social
Exclusion

• Anne Bakilana
• World Bank

2
Social Exclusion and the EUs Social Inclusion
Agenda

• The European Union embraced the social inclusion
  concept in the mid 1990s as a way of tackling
  poverty and other social challenges facing its
  member states.
• The EU agenda has resulted in common objectives
  to respond to social exclusion as described in
  National Action Plans against poverty and social
  exclusion.
• Other countries and international organizations
  have also adopted the concepts of social
  exclusion and inclusion.
  

3
What is social exclusion?The EUs Definition

• a process whereby certain individuals are pushed
  to the edge of society and prevented from
  participating fully by virtue of their poverty,
  or lack of basic competencies and life long
  learning opportunities, or as a result of
  discrimination. This distances them from job,
  income and education and training opportunities,
  as well as social and community networks and
  activities. They have little access to power and
  decision making bodies and thus feel powerless
  and unable to take control over the decisions
  that affect their day to day lives (European
  Commission 2004).

4
UK governments definition of social exclusion

• social exclusion happens when people or places
  suffer from a series of problems such as
  unemployment, discrimination, poor skills, low
  incomes, poor housing, high crime, ill health and
  family breakdown. When such problems combine they
  can create a vicious cycle. Social exclusion can
  happen as a result of problems that face one
  person in their life. But it can also start from
  birth. Being born into poverty or to parents with
  low skills has a major influence on future life
  chances.

5
UKs Department for International Development
(DFID) s definition

• a process by which certain groups are
  systematically disadvantaged because they are
  discriminated against on the basis of their
  ethnicity, race, religion, sexual orientation,
  caste, descent, gender, age, disability, HIV
  status, migrant status or where they live.
  Discrimination occurs in public institutions,
  such as the legal system or education and health
  services, as well as social institutions like the
  household. People are excluded by institutions
  and behavior that reflect, enforce and reproduce
  prevailing social attitudes and values,
  particularly those of powerful groups in society.

6
Main features of the various definitions of
social exclusion

• the various concepts of exclusion imply a
  process,
  
• individuals are excluded from what other members
  of a society are participating in,
  
• there is no clear definition or defined measures
  of social exclusion,
  
• social exclusion is still a contested term and
  despite its wide use in European research,
  debates and policies, its definition and usage
  varies significantly from person to person and
  has continually evolved over time.

7
From Poverty to Poverty and Social Exclusion

• The social exclusion concept originated in France
  about 30 years ago
  
• The term was mostly used to describe individuals
  who were not covered by the social security
  systems of the time (these included single
  mothers, substance abusers and drug addicts and
  people with physical and mental disabilities)
• Over time this grew to also include the
  unemployed, the homeless, dissatisfied youth, the
  old, immigrants, etc.
  
• In the late 1990s, the UKs Labor government put
  a spotlight on the terms social exclusion and
  social inclusion.
  
• UK Govt established a Social Exclusion Unit whose
  main task is to implement government policies on
  inclusion and regeneration activities.
  

8
The UK Governments Social Exclusion Unit

• Initially set up in 1997 first under the Cabinet
  Unit and then later moved to the Office of the
  Deputy Prime Minister in 2002.
  
• There is a Minister for Social Exclusion who is a
  Minister under the Cabinet Office.
  
• Consultations between the Prime Minister, Deputy
  Prime Minister, various government departments
  and other stakeholders decide on work program.
  The Units work includes
• i) Policy Reports Based on consultations with
  people who have the experience of being excluded
  and also includes wide participation beyond
  government departments including local
  authorities, business representatives and the NGO
  sector
• ii) Research and Strategy To understand drivers
  of social exclusion so that policies can not only
  tackle the problems but also prevent future
  exclusion and
• iii) Implementing Policy and Supporting Best
  Practices promotes best practices from
  undertaken projects.

9
Why deal with social exclusion?Social exclusion
experts argue that

• social exclusion is wider than the traditional
  concept of poverty
  
• it is about processes that lead to
  non-participation in societies activities
  
• it is multidimensional
• it embraces concepts of vulnerability to
  poverty
  
• one does not have to be poor to be socially
  excluded
  
• non participation in societies activities is as
  critical as poverty.

10
Who are the socially excluded?Examples from new
EU states analyses

• Those on low incomes
• The unemployed
• Individuals with disability
• Non citizens ethnicity minorities immigrants
• Families with many children
• The homeless and those in poor housing
• The young the old children
• Women.

11
Examples of socially excluded groups
12
Manifesto to eradicate poverty and to fight
social exclusion in member states by 2010. (The
European Council of Lisbon, March 2000)

• A consensus to eradicate poverty and to fight
  social exclusion in member states by 2010
  
• The following policy objectives were adopted
• 1) To facilitate participation in employment and
  access by all to the resources, rights, goods and
  services
  
• 2) To prevent the risks of exclusion
• 3) To help the most vulnerable
• 4) To mobilize all relevant bodies.

13
What is Social Inclusion?

• the process that will enable every person in
  society to participate in normal activities of
  societies they live in.

14
National Action Plans for Social Inclusion

• individual countrys analyses of what groups were
  socially excluded
  
• describe specific actions to be taken in order to
  become more inclusive.

15
Counting the Socially Excluded The Laeken
European Council (December 2001) endorsed common
statistical indicators of social exclusion and
poverty that will serve as key elements in
monitoring progress in the fight against poverty
and social exclusion (Laeken Indicators)

• At-risk-of-poverty rate by gender and various age
  groups
  
• At-risk-of-poverty rate by most frequent activity
  and by gender and selected age groups 
  
• At-risk-of-poverty rate by household type 
• At-risk-of-poverty rate by accommodation tenure
  status and by gender and selected age groups 
  
• At-risk-of-poverty rate by work intensity of the
  household 
  
• At-risk-of-poverty threshold illustrative
  values 
  
• Inequality of income distribution s80/s20 income
  quintile share ratio
  
• Persistent at-risk-of-poverty rate by gender and
  selected age groups 
  
• Relative median at-risk-of-poverty gap by gender
  and selected age groups
  
• Regional cohesion by gender (variation in
  regional employment rates)
  
• Long term unemployment rate by gender and
  selected age groups 
  
• Persons living in jobless households by gender
  and selected age groups 
  
• Early school leavers not in education or training
  by gender 
  
• Life expectancy at birth by gender 
• Self defined health status by income level by
  gender and age 
  
• Dispersion around the at-risk-of-poverty
  threshold by gender and selected age groups 
  
• At-risk-of-poverty rate anchored at one moment in
  time by gender and selected age groups 
  
• At-risk-of-poverty rate before cash social
  transfers by gender and selected age groups 
  
• Inequality of income distribution Gini
  coefficient 
  

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From counting the excluded to measuring
exclusion If social exclusion is a process, can
we measure it?

• How can we capture the processes that leads to
  exclusion?
  
• Given its multidimensional focus, can this be
  done in one discipline of study?
  
• Given the very generous definition of exclusion,
  what should we focus on?
  
• Given the lack of a single definition of
  exclusion, what should we be analyzing?
  

17
The EU Social Inclusion StudyAn attempt to
measure determinants of social exclusion

• extending the debate outside discussions about
  monetary deprivation and poverty
  
• adopted the capability deprivation which says
  that due to social and economic factors certain
  individuals in society may never reach their full
  potential
• individuals who are deprived of certain
  capabilities could be excluded from participating
  in the labor force, consumption, wealth
  accumulation and from social functions

18
Recognize that jobs and income education and
training opportunities social, community
networks and activities are central to the
process of inclusion. Go beyond quantifying the
percent of people that lack financial means (or
that do not consume enough) as a proportion of
the total population.Social exclusion
encompasses more than poverty, but, poverty is a
component of Social exclusion

• Profile the proportion of the population that is
  not included in societys production,
  consumption, political engagement and social
  interaction.

• Excluded from Financial Capital
• Those who are excluded from access to earnings
  and wealth
  

Excluded from Social Capital Those with limite
d friends, family, community interactions and
little political empowerment

• Excluded from Human Capital
• Those with no or very limited Education, skills

• Excluded from Physical Capital
• Do not own any Housing or Land

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Three Forms of Capital

• Financial Capital
• For this exercise, all those with the means to
  earn financial capital through employment, farms,
  rental income were grouped as having financial
  capital.
• Physical Capital
• An individual was defined as having physical
  capital if they privately own land or property.
  
• Human Capital
• An individual has human capital from their
  education and years of schooling and training.
  For this exercise, those lacking education
  capital were defined as those who did not reach
  the compulsory level of education in their
  country.

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What data did we have?
21
What data was used to compile capitals?
22
What did we find?

• The percent of the population that lacked
  financial capital was at least 20, rising to as
  high as 42 in Poland.
  
• in Poland where those who had not worked in the
  last seven days formed 70 of those excluded from
  financial capital.
  
• Youth aged 15-24 formed the largest proportion of
  those excluded from financial capital, for e.g.
  in Hungary 70 of those excluded from financial
  capital are from this age group.
• In all countries, the larger proportion of those
  excluded from financial capital were women 58
  in Latvia and Lithuania.
  
• Quite large proportions of those excluded from
  financial capital were those with secondary
  levels of education.
  
• Urban residents formed the largest proportion of
  those excluded from financial capital.

23
What did we find?

• The largest proportion of those that lacked human
  capital was of individuals in the 40-64 age
  groups.
  
• Without exception, the largest proportion of
  those that lacked human capital was of
  individuals in the 40-64 age groups.
  
• Women formed the largest proportion of those that
  lacked human capital in Poland, Hungary and
  Lithuania.
  
• The majority of those who lacked human capital
  did have some years of education.
  
• Except for Hungary, the largest proportion of
  those lacking human capital were rural residents
  in Estonia the distribution is close 49 vs.
  51.
• Unlike what was the case for exclusion from
  financial capital, a larger proportion of those
  that lacked human capital were individuals with
  disabilities, around a quarter of those with no
  human capital were disabled in Poland Estonia and
  Hungary and a third in Lithuania.

24
Poverty and social exclusion

• Results show that not all those who are excluded
  from the various forms of capitals are poor in
  fact the majority of those who are excluded from
  the various forms of capital were not in the
  bottom consumption quintile.

25
Lessons for methodology and data requirements

• The data available were all from cross sectional
  surveys making it impossible to analyze the
  dynamics of exclusion
  
• Since the data come from household surveys, by
  definition, those who do not live in households
  are not included
  
• Because of a limited number of variables
  available in such household budget surveys, it
  was not possible to quantify ownership of social
  capital

26
Lessons for methodology and data requirements

• Analyses focused on the 15-64 age groups because
  available variables were more relevant for
  working adults and not for children or the
  elderly (even Eurostat has no indicators for
  childrens exclusion)
• It was not possible to assess the contribution of
  community and national level capitals that do
  contribute to individuals possession of the
  various forms of capitals. Community and national
  capitals could include social infrastructure such
  as schools, hospitals, roads, and other forms of
  collective physical capital.
• Country data are not directly comparable because
  variables used to compile the various forms of
  capitals are not identical across countries.
  

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Lessons for methodology and data requirements

• It is not possible to assess or compare how lack
  of access to a form of capital is associated with
  a level of deprivation. That is, is someone who
  lacks financial capital as worse off as someone
  who lacks human capital? Does an individual who
  lacks human and financial capital worse off than
  the individual that lacks just one of these?
• Bivariate rather than multivariate analysis for
  the probability of being both poor and lacking in
  capitals might not be sufficient to explain the
  very complex interaction between socio-economic
  characteristics on one hand and lack of capitals
  and poverty on the other.