Fighting poverty and social exclusion in the European Union

1
Fighting poverty and social exclusion in the
European Union

• Isabelle Maquet Engsted European Commission
• DG Employment, Social Affairs and Equal
  Opportunities
• http//ec.europa.eu/employment_social/spsi/povert
  y_social_exclusion_en.htm

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Outline of the presentation

1. The EU Social inclusion strategy
2. The role of indicators
3. Building statistical and analytical capacity
4. Example of in-depth analysis child poverty an EU
   Benchmarking exercise

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I EU social inclusion strategy

• The fight against poverty and social exclusion at
  EU level a long-term commitment
• A shared sense of urgency, but a very sensitive
  issue
• It is still and will remain a Member States
  competence
• What is the role of the European Union?
• EU Social Agenda direct initiatives in limited
  areas
• EU social inclusion strategy facilitating
  cooperation between Member States
• Can the European Union make a difference?
• Child poverty a benchmarking exercise

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I - EU social inclusion strategy Policy
coordination between Member States

• 3 key ingredients of the Open Method of
  Coordination peer pressure, regular reporting,
  mutual learning
• Non-binding political agreement on common
  objectives
• Common indicators
• Translating the EU objectives into
  national/regional policies (National Reports on
  Strategies for Social Protection and Social
  Inclusion)
• Common analysis and assessment of the National
  Reports Joint Report supporting document
• PROGRESS financial support to promote policy
  cooperation and transnational exchange of
  learning and good practice.

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I - EU social inclusion strategy Streamlining

• In 2006 the three processes on
• social inclusion (2001),
• Pensions (2002) and
• Health care and Long-term care (2004)
• OMC on Social Protection and Social Inclusion
• Overarching objectives social cohesion,
  interaction with Lisbon (growth and jobs) and
  governance
• 3 sets of specific objectives on SI, P, and HC

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I - EU social inclusion strategy The reporting
process

• National Strategy Reports (September 2008)
• Every 3 years (2008) cover the full objectives
  in the 3 strands social situation, policies
  (focus on key priorities)
• Light years in between focus on a theme (Child
  Poverty in 2007, Homelessness and housing
  exclusion in 2009)
• Joint Report (February 2009)
• Joint analysis by the Commission and the Member
  States Indicators review, Analysis of policies,
  Country profile (identifying challenges), Good
  practices

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I - Common objectives combined with a thematic
approach

• Common social inclusion objectives
• Access to resources, rights and services needed
  for participation in society
• Inclusion through employment for those who can
  work, support for those who cant
• Policy coordination, participation, mainstreaming
• A thematic approach
• Active inclusion
• Adequate Income support
• Inclusive labour markets
• Access to quality services
• Child poverty (2007 focus year, report on child
  poverty and well-being)
• Housing exclusion and homelessness (2009)
• The social aspects of migration and ethnic
  minorities (2010)

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II - How are the common indicators used ?

• Where ?
• Publicly available on Eurostat web-site
• National Reports on Strategies for Social
  Protection and Social Inclusion
• Joint reports (Commission Council) Common
  analysis and assessment of the National Reports
• How ?
• using a common framework for diagnosis and
  setting priorities
• comparing best practice
• measuring progress and targeting

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II - How are the indicators developed ?

• In OMC context, indicators are developed
• Collectively
• Empirically
• On the basis of expertise (Indicators Sub-Group
  of SPC)
• A complex exercise measuring both
• Performance and outcomes
• Impact of policies that are supposed to influence
  social cohesion
• Structure provided by the agreed policy
  objectives (Atkinson, Marlier et al reports,
  2001 and 2005)
• Methodological framework
• Criteria for selecting indicators
• Typology of indicators

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II - Criteria for selecting indicators

• The portfolio should be
• comprehensive
• balanced across the different dimensions
• integrated and transparent
• Indicators should be
• Relevant, and have a clear and accepted normative
  interpretation
• Robust and statistically validated
• Comparable across countries
• Be built on available and timely data,
• Responsive to policy interventions but not
  subject to manipulation

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II - Typology EU and NAT commonly agreed
indicators

• Commonly agreed EU indicators
• comparative assessment of MS's progress towards
  the common objectives
• Social outcomes, intermediate social outcomes or
  outputs.
• Commonly agreed national indicators
• based on commonly agreed definitions and
  assumptions
• Reflecting a key dimension, but
• no direct cross-country comparison, or
• no clear normative interpretation.
• Suited for measuring the scale and nature of
  policy intervention.
• To be interpreted jointly with the relevant
  background information (exact definition,
  assumptions, representativeness).
• Context information
• National Indicators

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II - Overarching objectives

• The overarching objectives are to promote
• (a) social cohesion, equality between men and
  women and equal opportunities for all through
  adequate, accessible, financially sustainable,
  adaptable and efficient social protection systems
  and social inclusion policies
• (b) effective and mutual interaction between the
  Lisbon objectives of greater economic growth,
  more and better jobs and greater social cohesion,
  and with the EU's Sustainable Development
  Strategy
• (c) good governance, transparency and the
  involvement of stakeholders in the design,
  implementation and monitoring of policy. (not
  covered by indicators)

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II - Overarching list

• 14 indicators to monitor 2 overarching objectives
• Social cohesion and policies that contribute to
  it
• Interaction between growth and jobs and social
  cohesion

1. Risk and intensity of poverty
2. Income inequalities (S80/S20)
3. Healthy life expectancy
4. Early school leavers
5. Jobless households
6. Projected public social expenditure
7. Pension adequacy

1. Unmet need for health care
2. Anchored poverty rate
3. Employment rate of older workers
4. In-work poverty risk
5. Activity rates
6. Dispersion in regional employment rates
7. Health expenditure

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II Social inclusion objectives

• to make "a decisive impact on the eradication of
  poverty and social exclusion by ensuring
• (d) access for all to the resources, rights and
  services needed for participation in society,
  preventing and addressing exclusion, and fighting
  all forms of discrimination leading to exclusion
  
• (e) the active social inclusion of all, both by
  promoting participation in the labour market and
  by fighting poverty and exclusion
• (f) governance

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II The Social inclusion portfolio

1. At Risk of poverty rate (60 of median) poverty
   thresholds
2. Persistent at risk of poverty rate (2 out of 3
   years in poverty)
3. Relative median poverty risk gap Distance
   between median income of the poor and the poverty
   threshold
4. Long term unemployment rate
5. Population living in jobless households
6. Early school leavers
7. Employment gap of migrants
8. Material deprivation (Adopted 10-02-09)
9. Housing (to be developed)
10. Self-declared unmet need for care
11. Child well-being

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II - A common EU concept of poverty

• EU Council of ministers in 1975 defines the poor
  as "individuals or families whose resources are
  so small as to exclude them from the minimal
  acceptable way of life of the member state where
  they live".
• It is relative, graduated and multi-dimensional
  with an important temporal dimension.
• Responsive to a range of macro-economic policies
• The concept is challenged by strong differences
  in living standards across the EU
• Material deprivation, multidimensional aspects

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II- At-risk of poverty rates, EU, 2007
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II- At-risk of poverty thresholds, EU, 2007
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Material deprivation measuresvs. at-risk of
poverty rates
Highest deprivation rates in new Member States,
incl. where at-risk-of-poverty rates are low
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III Analysing the indicators

• Setting the context GDP growth, levels and
  changes in employment and unemployment (highlight
  the situation of women, youth and older
  workers)Level of social protection expenditure,
  structure of expenditureState of public finance,
  life expectancy, challenges of ageing population
• Poverty and social cohesionHow many are at risk
  of poverty? Living standards of the poor (poverty
  threshold) How poor are the poor? the poverty
  gapWhat is the general level of inequalities in
  the country? (S80/S20)Highlight trends if
  available, vulnerable groups

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II Analysing the indicators

• The interaction with Lisbon - What was the
  impact of economic growth on the poorest? Did
  their living standard increase? Did inequalities
  increase?gt Changes in anchored poverty and in
  poverty rates- What was the impact of more jobs
  on social cohesion?Did the jobs go to those who
  needed them most? levels and trends in jobless
  households, employment rate of migrants, etcDid
  the jobs created ensure decent standards of
  living? (levels and of in-work poverty)
• Other dimensions of social cohesion- Educational
  outcomes early school leavers, educational
  attainment- Health inequalities in health
  status and in access to health care unmet need
  for health care by income quintile

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II Analysing the indicators

• The role of the social protection system in
  reducing poverty (elderly poverty see pension
  training)- What is the impact of social
  transfers on the reduction of poverty? at-risk of
  poverty rates before and after transfers.-
  Adequacy of benefits level of social assistance
  benefits compared to poverty rates

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II Using the EU indicators

• Where can I find the definition of the
  indicators?
• Report on indicators (2008 update)http//ec.euro
  pa.eu/employment_social/spsi/docs/social_inclusion
  /2008/indicators_update2008_en.pdf
• Where can I find the data?
• Overarching portfolio http//ec.europa.eu/employm
  ent_social/spsi/docs/social_inclusion/data_overarc
  hing_en.xls
• Social inclusion portfoliohttp//ec.europa.eu/em
  ployment_social/spsi/docs/social_inclusion/data_in
  clusion_en.xls
• Where can I find a comprehensive analysis?
• http//ec.europa.eu/employment_social/spsi/docs/so
  cial_inclusion/2008/omc_monitoring_en.pdf

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III Knowledge building

• Enhancing statistical capacity
• Investing in EU harmonised surveys
• EU-SILC income and living condition,
• LFS Labour Force Survey
• Census, etc.
• Participate in other international data
  collection exercises PISA(OECD), TIMMS/PIRLS,
  HBSC, etc.
• Investing in long-term research programmes
• Investing in analytical tools at national or
  international level micro-simulation (EUROMOD),
  Tax-benefit model (EC-OECD)

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III Linking analysis and policy making

• Link between researchers, analysts and policy
  makers
• Policy recommendations emerging from research
  findings
• Reporting tools
• Link between policy measures and outcomes
• Hierarchy of indicators from outcomes to output
  to input
• Use of targets creates accountability
• need to be based on evidence based diagnosis and
  understanding
• Need to be backed by intermediate targets
• link to objectives at all levels of government
• Micro-simulation models and other analytical
  tools
• Good practice UK and child poverty

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2007 focus on child poverty

• Strong political commitment
• March 2006 Council conclusions asked Member
  States to take necessary measures to rapidly and
  significantly reduce child poverty, giving all
  children equal opportunities, regardless of their
  social background
• Already a priority for many EU countries in
  previous reporting exercise
• 2007 activities
• Report on Child Poverty and Well-Being.
• Specific reporting by Member States on strategies
  to fight child poverty
• Peer Review of the Social Protection Committee

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An EU benchmarking exercise on child poverty

• What we can do with the EU agreed indicators
• Child relative income poverty (60 of median
  disposable income of the country)
• 3 main factors how they impact on child poverty
• Socio-demographic characteristics of household
• Size and composition, focus on lone parents and
  large families
• Age and educational attainment of parents
• Breakdowns of at-risk of poverty rates
• Labour market situation of parents
• Employment rates of parents
• Children living in jobless households
• In-work poverty
• Governement intervention
• Tax-benefit system
• Child care
• Microsimulation (EUROMOD)

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At-risk-of poverty rate in the EU (), children
and total population, 2006
Source SILC(2006) - income year 2005 (income
year 2006 for IE and the UK) except for BG and
RO - estimates based on the national Household
Budget Survey
29
Children and adults living in jobless
households, 2007
Source Eurostat Labour Force Survey, spring
results, data missing for SE
30
In work poverty at-risk-of-poverty rate of
children and adults living in households at work,
2005
Source SILC(2005) - income year 2004 (income
year 2005 for IE and the UK) data missing for BG
and RO
31
Impact of social transfers (excl.pensions)
Reduction in at-risk-of-poverty rate in of
poverty rate before transfers, 2006
Source SILC(2006) - income year 2005 (income
year 2006 for IE and the UK) data missing for RO
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Diagnosis on child povertyfrom very bad (---) to
very good () performance
Child poverty risk outcomes Children in jobless households In-work poverty Impact of social transfers
GROUP A AT
GROUP A CY
GROUP A DK
GROUP A FI
GROUP A NL
GROUP A SE ()
GROUP A SI
GROUP B BE --
GROUP B CZ - --
GROUP B DE --
GROUP B EE -- -- -
GROUP B FR -
GROUP B IE - ---
GROUP B SK - ---
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Diagnosis on child poverty from very bad (---)
to very good () performance
Child poverty risk outcomes Children in jobless households In-work poverty Impact of social transfers
GROUP C HU --- --- -
GROUP C MT - -- -- -
GROUP C UK -- --- --
GROUP D EL -- -- ---
GROUP D ES --- --- ---
GROUP D IT --- --- --
GROUP D LT --- -- --
GROUP D LU -- --
GROUP D LV --- - -- --
GROUP D PL --- - -- --
GROUP D PT -- -- --
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4 Country clustersby main determinants of child
poverty

• Attention this is not a beauty context!
• Group A (AT, CY, DK, FI, NL, SE, SI) countries
  performing well on all fronts achieve lowest
  poverty rates. They need to continue monitoring
  child poverty, since in some of them it has
  recently increased.
• Group B (BE, CZ, DE, FR, EE, IE) countries with
  high numbers of children living in jobless
  households.Policies aimed at making work pay and
  at enhancing access to quality jobs for those
  parents furthest away from the labour market are
  needed.

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4 Country clustersby main determinants of child
poverty

• Group C (HU, MT, SK, UK) countries with high
  levels of joblessness and in-work poverty among
  parents. Child poverty partly alleviated through
  relatively efficient transfers, or because of
  strong family structures. Policy mixes needed to
  enhance labour market access for parents in
  jobless households' and second earners and to
  provide adequate in-work income support.
• Group D (EL, ES, IT, LV, LT, PL, PT) countries
  with high levels of child poverty, very high
  levels of in-work poverty and low impact of
  social transfers. They need to adopt
  comprehensive strategies to better support
  families income and enhance labour market
  situation of parents, especially for second
  earners.

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Key policy messages endorsed by all Member States

• Policies ensuring equal opportunities for all and
  improving educational outcomes for each child.
• Fighting child poverty requires a combination of
  adequate income support, quality jobs for
  parents and enabling services for children and
  their families.
• The best performers combine universal support
  towards all children with measures targeted at
  the most disadvantaged
• Efforts to tackle poverty will gain leverage from
  an evidence-based diagnosis of the main causes of
  poverty and exclusion in each Member State.
• Quantified objectives can be instrumental in
  making a decisive impact on the eradication of
  poverty

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The specific case of Estonia

• Estonia in group B main issue is children in
  Jobless Households (8 gt adult population)
• Nearly 60 of children in Jobless Household live
  with 1 adult only (lone parent, or even lone
  grand parent)
• Relatively high share (18) of children living
  with a lone parent (or grand-parent), esp. young
  lone mothers
• In-work poverty around EU average and mainly
  affects lone parents and single earner couples
• Impact of social transfers lt EU average and lt
  adult population (mostly through child benefits)
  should we take account of pensions?
• Large gap in employment rate of mothers 14pp
  (EU8pp)
• Child care utilisation appears low (especially
  under 2)

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The specific case of Estonia

• Policy conclusions must be drawn at national
  level, exploring further the issues highlighted
• Tentative policy conclusions active inclusion
  strategies for the parents and measures addressed
  directly at children
• Enhance labour market participation of lone
  parents (and second earners) through
• Enhancing quantity and quality of child care
  provision reconciliation policies
• Making work pay for parents (ALMP, in-work
  benefits, etc)
• Income adequacy for the parents who cannot work
• Address issue of children living with grand
  parents, in foster care or institutions
• Effectiveness of social transfers
  (micro-simulation models)
• impact on redistribution
• impact on incentives to work