Transcript Multiple deprivation across European countries

Cross-national differences in
determinants of multiple
deprivation in Europe
Francesco Figari
EPUNet Conference
May, 8th 2006
Research questions
• Which is the longitudinal relationship
between income (and other determinants)
and deprivation in the European
countries?
• Which are the reasons for the deprivation
differentials across Europe?
Multiple deprivation
• Multidimensional approach → outcome elements
(Townsend 1979)
• Concept and measurement → indirectly and
directly (Ringen 1987, 1988)
• Deprivation → Exclusion from minimum living
standards (Nolan and Whelan 1996)
• Social exclusion → Relationship between current
income and living conditions indicators
Motivations
• Policy → at the EU level necessity of
quantitative indicators to monitor the
Lisbon Strategy
• Conceptual → “poverty” ≠ “deprivation”
• Empirical→ mismatch “poverty” – “deprivation”
→ different determinants across
countries
Empirical literature review
 EU level
• Nolan and Whelan (1996, …)
–
–
–
–
Methodological measurement aspects
Identification of different dimensions of deprivation
Relationship between income poverty and deprivation
Determinants of “consistent poverty”
 UK
• Berthoud, Bryan and Bardasi (2004)
- Longitudinal relationship between income (and other
determinants) and deprivation
Data
• ECHP
• 1994 – 2001
• 11 countries
(excluded: Germany, UK, Luxembourg and Sweden)
Items and Dimensions
• 24 non-monetary indicators (Eurostat 2002)
• Factor analysis (Whelan et al. 2001)  5 dimensions + Overall
–
–
–
–
–
Basic  7 items: housing, social activities, diet, clothes
Secondary  6 items: durables
Housing facilities  3 items: services
Housing deterioration  3 items: structural parts
Environment  5 items: noise, pollution, crime, space, light
• Cronbach’s a for overall deprivation
AT
BE
DK
EL
ES
FI
FR
IE
IT
NL
PT
0.70
0.70
0.65
0.79
0.73
0.69
0.71
0.76
0.74
0.65
0.82
Average number of items lacking in the Overall Deprivation
8
DK
7
NL
6
B
5
F
4
Irl
I
3
EL
20 0
0
19 9
9
A
19 9
8
0
19 9
7
P
19 9
6
1
19 9
5
E
19 9
4
2
Fin
Deprivation index
Prevalence weighting procedure within each country and each wave
- Each item (j)  I
W
hjt
 I hjt p jt
tv
dishwasher
I
1
1
IW
p
99.35% 0.99
82.57% 0.83
J
W
- Each household (h)  Dht   I hjt
DW= 0.99+0.83 = 1.82
j 1
J
W
D

I
Normalisation  ht  hjt
j 1
J
p
j 1
jt
* 100  Dht  [0,100]
Deprivation index
Country-specific and time varying weights
 to compensate for variations in deprivation due to the trend of
possession over time and social and cultural differences across
countries
At household level and attributed to the individuals
 to follow them across waves
Just an indicator and not a direct measure of deprivation:
 weak set of assumptions
 questionable choice of the indicators
 formulation of questions in terms of non affordability or
unwillingness
 focus on some specific areas of consumption
The minimum value is not a censored point
 it cannot be considered as the direct realization of the true and
latent deprivation value
0
5
10
15
20
Overall deprivation index - 2000
DK
IE
NL
AT
BE
FI
FR
ES
Average overall deprivation score
IT
EL
PT
Poverty rate
AT
BE
DK
EL
ES
FI
FR
IE
IT
NL
PT
99th percentile
34.90
36.19
32.45
53.75
42.60
36.29
40.86
36.34
42.99
31.72
63.41
Average
6.12
6.49
5.07
17.2
10.13
7.05
8.05
5.13
10.64
5.62
18.23
% with zero
35.16
36.39
47.54
1.84
21.53
32.86
29.97
46.81
15.30
38.20
7.00
Coeff. of Variation
1.253
1.287
1.424
0.738
0.994
1.192
1.168
1.559
0.937
1.314
0.806
0
10
20
% 30
40
50
Overlap Income - deprivation
AT
DK
NL
FI
BE
IE
ES
FR
EL
IT
PT
Poor and deprived in 2000
Persistently poor and persistently deprived in 1998-2000
Persistently poor in 1998-2000 and deprived in 2000
Correlation between Overall Deprivation index and equivalent income
AT
BE
DK
EL
ES
FI
FR
IE
IT
NL
PT
-0.20
-0.22
-0.19
-0.41
-0.32
-0.26
-0.33
-0.28
-0.36
-0.24
-0.40
Low income - deprivation
France
15
10
5
6
8
8
10
10
10
12
20
Belgium
15
Netherlands
12
Denmark
10000
15000
4000 6000 8000 1000012000
15
10
10
8
6
4000 6000 8000 1000012000
15000
2000
Spain
4000
6000
8000
14
Finland
8
7
10
8
12
9
10
Austria
6
2000
4000
6000
5000
10000
4000 6000 8000 1000012000
Greece
2000 4000 6000 8000 10000
Portugal
20 22 24 26 28
10000
18 20 22 24 26
20
Italy
12
Ireland
5000
10 12 14 16 18
5000
15000
4000 6000 8000 1000012000
Equivalent income PPP
2000
4000
6000
8000
Econometric specification
D it  a  xit β   t  vi   it
• D it  Overall Deprivation Score
• x it
• t
•
vi
 Income (deflated at 2000 prices and exressed in PPS)
 Social transfers
 Education level
 Employment status (employed, unemployed, inactive)
 Health status
 Housing tenure (owner, mortgage, tenant, free)
 Number of adults, number of children, family type, proportion
of elderly
 Time-specific effect: dummy variable for each year
 Individual-specific unobserved effect
Random and Fixed effects models
Decomposition of deprivation gap
Average predicted
deprivation score

c
cˆc
ˆ
D a x β
c
B
A
B
A ˆA
B ˆB
ˆ A )  (aˆ B  aˆ A )
D

D

(
x

x
)
β

x
(
β

β

 
 
 
 
 
GAP
Characteristics
Averaging approach:
contribution of each variable 
Returns
Constant
A
B ˆB
A
ˆ
ˆ
(x  x )β1  x1 (β1  β1 )

 
 
 

B
1
A
1
Characteristics
Returns
Results: Fixed Effects
Hausman specification tests suggest a preference for the FE specifications
General robustness of the results across countries according to the expectations
Income  negatively associated
 the impact of the first lag is stronger than of the current income
 the second lag are still statistically significant in most of the countries
Employment status
 moving into and out of the labour market is as
important as being in or out of it
Education level  Difficulties to capture the impact of the achievement of a new
education level.
Housing tenure  penalty of moving in rented houses
-5
0
5
10
15
Decomposition of deprivation gap
NL
AT
FI
IE
Characteristics
BE
FR
IT
Returns
ES
EL
Constant
PT
Decomposition of deprivation gap
Income
Characteristics
Returns
NL
NL
AT
AT
FI
FI
IE
IE
BE
BE
FR
FR
IT
IT
ES
ES
EL
EL
PT
PT
-5
0
5
Current income
-5
1st lagged income
Income
0
2nd lagged income
5
Decomposition of deprivation gap
Employment status HH head
Characteristics
Returns
NL
NL
AT
AT
FI
FI
IE
IE
BE
BE
FR
FR
IT
IT
ES
ES
EL
EL
PT
PT
-.6
-.4
-.2
0
.2
workingref
.4
-.6
unemployref
-.4
-.2
0
.2
.4
inactref
Employment status of household head
Decomposition of deprivation gap
House tenure status
Characteristics
Returns
NL
NL
AT
AT
FI
FI
IE
IE
BE
BE
FR
FR
IT
IT
ES
ES
EL
EL
PT
PT
-1
-.5
0
Own house
.5
1
Outstanding mortgage
-1
-.5
Rented
Housing tenure
0
.5
Free-rent
1
Decomposition of deprivation gap
Family composition and lone parent
Characteristics
Returns
NL
NL
AT
AT
FI
FI
IE
IE
BE
BE
FR
FR
IT
IT
ES
ES
EL
EL
PT
PT
-1
0
1
2
3
Family composition
-1
0
Lone parent
Family structure
1
2
3
Decomposition of deprivation gap
Constant
Returns
NL
AT
FI
IE
BE
FR
IT
ES
EL
PT
0
5
10
Constant
15
20
Cross-country conclusions
High deprivation countries
Contribution to a reduction of the gap:
- increase in income
- home ownership
- job market participation of household
members
Contribution to an increase of the gap:
- family composition
- (fixed country effect)
Policy implications
• More comprehensive policies in addition to
income policies
• Primary attention to long term poverty
status
• Definition of the eligibility criteria of the
beneficiaries of public policies
Further developments
• Dynamic analysis
• short and long term effects of the socio-economic
determinants
• persistence of deprivation over time
• impact of the determinants given the initial
deprivation conditions.
Average number of items lacking in the Basic Deprivation
4.5
DK
4
NL
3.5
B
3
F
2.5
Irl
2
I
1.5
EL
20 0
0
19 9
9
A
19 9
8
0
19 9
7
P
19 9
6
0.5
19 9
5
E
19 9
4
1
Fin
Average number of items lacking in the Secondary Deprivation
2
1.8
DK
1.6
NL
1.4
B
1.2
F
1
Irl
P
0
A
20 0
0
0.2
19 9
9
E
19 9
8
0.4
19 9
7
EL
19 9
6
0.6
19 9
5
I
19 9
4
0.8
Fin
• BASIC DIMENSION
Can the household afford…
...keeping its home adequately warm?
...paying for a week's annual holiday away from home?
… replacing any worn-out furniture?
… buying new, rather than second-hand, clothes?
… eating meat, chicken or fish every second day?
… having friends or family for a drink or meal at least once month?
… paying scheduled rent/mortgage and utility bills of the house?
• SECONDARY DIMENSION
Affordability of…
… car
… tv
… video recorder
… micro wave
… dishwasher
… telephone
• HOUSING FACILITIES DIMENSION
Does the dwelling have…
… bath or shower?
… indoor flushing toilet?
… hot running water?
•
HOUSING DETERIORATION DIMENSION
Does the accommodation have…
… leaky roof?
… damp walls, floors, foundations…?
… rot in window frames or floors?
• ENVIRONMENT DIMENSION
Does the accommodation have…
… noise from neighbours?
… shortage of space?
Is there any pollution, grime, or other environmental problem…?
Is the accommodation too dark / not enough light?
Is there crime or vandalism in the area?
Variables
•Dependent variable  Overall Deprivation Score
• HH head and HH members
– Income (deflated at 2000 prices and in PPS): current and lagged
– Social transfers
– Education level (less secondary school, secondary school or +)
– Employment status (employed, unemployed, inactive)
– Health status
– Housing tenure (owner, mortgage, tenant, free)
– Number of adults, number of children, family type (single, couple
with kids, couple without kids, lone parent), proportion of elderly
– Dummy variable for each year
Econometric model
D it  a  xit β   t  vi   it
• Random Effects
( Dit   Di )  (1   )a  ( x it   x i )β  {(1   )vi  ( it    i )}
• Fixed Effects
( Dit  Di  D )  a  ( x it  x i  x )β  ( it   i   )
Results: Fixed Effects
Hausman specification tests suggest a preference for the FE specifications
Income  negatively associated
 the impact of the first lag is stronger than of the current income
 the second lag are still statistically significant in most of the countries
Employment status
 moving into and out of the labour market is as
important as being in or out of it
 becoming inactive has a significant and positive
impact in DK, FR, EL, NL, PT and FI.
 if the proportion of person employed increases in
the household the impact is statistically significant that
in DK, FR, EL, ES, PT and FI.
Education level  negatively associated (RE) but difficulties to capture the
impact of the achievement of a new education level.
Results: Fixed Effects
Health status
 negatively associated
 an improvement in the health status is important in terms of
deprivation reduction.
Housing tenure  penalty of moving in rented houses rather than in an own
house
 presence of outstanding mortgage has a negative effect on
deprivation score in BE, DK, NL, PT.
 the coefficients associated to a free-rented house are
always positive (no AT, IE, NL) reflecting the generally poor
nature of these houses.
Family structure  positive effect of becoming lone parent in BE, DK, FR, ES, NL
 positively associated with number of adults and children