Downward trend in the share of persons at risk of poverty or social exclusion in the EU

Downward trend in the share of persons at risk of poverty or social exclusion in the EU

Downward trend in the share of persons at risk of poverty or social exclusion in the EU

The FINANCIAL -- In 2016, 117.5 million people, or 23.4% of the population, in the European Union (EU) were at risk of poverty or social exclusion.

This means that they were in at least one of the following three conditions: at-risk-of-poverty after social transfers (income poverty), severely materially deprived or living in households with very low work intensity. After three consecutive increases between 2009 and 2012 to reach almost 25%, the proportion of persons at risk of poverty or social exclusion in the EU has since continuously decreased to 23.4% last year, only 0.1 percentage points above its 2009 low-point. The reduction of the number of persons at risk of poverty or social exclusion in the EU is one of the key targets of the Europe 2020 strategy.

Highest at risk of poverty or social exclusion rate in Bulgaria, lowest in the Czech Republic

In 2016, more than a third of the population was at risk of poverty or social exclusion in three Member States: Bulgaria (40.4%), Romania (38.8%) and Greece (35.6%). At the opposite end of the scale, the lowest shares of persons being at risk of poverty or social exclusion were recorded in the Czech Republic (13.3%), Finland (16.6%), Denmark (16.7%) and the Netherlands (16.8%).

Largest decrease in the at-risk-of-poverty or social exclusion rate in Poland, highest increase in Greece

Among Member States for which data are available, the at-risk-of-poverty or social exclusion rate has grown from 2008 in ten Member States, with the highest increases being recorded in Greece (from 28.1% in 2008 to 35.6% in 2016, or +7.5 percentage points), Cyprus (+4.4 pp), Spain (+4.1 pp) and Sweden (+3.4 pp). In contrast, the largest decrease was observed in Poland (from 30.5% to 21.9%, or -8.6 pp), followed by Latvia (-5.7 pp) and Romania (-5.4 pp). At EU level, the proportion of the total population being at risk of poverty or social exclusion in 2016 (23.4%) decreased by 0.3 percentage points from 2008.

About 1 in 6 persons in the EU at risk of income poverty…

Looking at each of the three elements contributing to being at risk of poverty or social exclusion, 17.2% of the EU population in 2016 were at risk of poverty after social transfers, meaning that their disposable income was below their national at-risk-of-poverty threshold (see the corresponding table). This proportion of persons at risk of income poverty in the EU has slightly decreased compared with 2015 (17.3%) but is still higher than in 2008 (16.5%). As the thresholds reflect actual income distribution in the countries, they vary greatly between Member States and also over time. Across the EU Member States, 1 in 4 persons was at risk of income poverty in Romania (25.3%) and about 1 in 5 in Bulgaria (22.9%), Spain (22.3%), Lithuania (21.9%), Latvia (21.8%), Estonia (21.7%), Greece (21.2%) and Italy (19.9% in 2015). In contrast, the lowest rates were observed in the Czech Republic (9.7%), Finland (11.6%), Denmark (11.9%), Slovakia (12.7%) and the Netherlands (12.8%). Compared with 2008, the proportion of persons at risk of income poverty has increased in twenty-one Member States for which data are available, and has decreased in four.

… 1 in 13 severely materially deprived…

In the EU in 2016, 7.5% of the population were severely materially deprived, meaning that they had living conditions constrained by a lack of resources such as not being able to afford to pay their bills, keep their home adequately warm, or take a one week holiday away from home. This proportion of persons severely materially deprived in the EU has decreased compared with both 2015 (8.1%) and 2008 (8.5%). The share of those severely materially deprived in 2016 varied significantly among Member States, ranging from more than 20% of the total population in Bulgaria (31.9%), Romania (23.8%) and Greece (22.4%), to less than 4% in Sweden (0.8%), Luxembourg (1.6%), Finland (2.2%), Denmark and the Netherlands (both 2.6%), Austria (3.0%) and Germany (3.7%). Compared with 2008, the proportion of persons severely materially deprived has increased in ten Member States for which data are available, and decreased in fifteen.

…and 1 in 10 living in households with very low work intensity

Looking at low work intensity, 10.4% of the population aged 0-59 in the EU lived in households where the adults worked less than 20% of their total work potential during the past year. It is the second year in a row since 2008 that this proportion decreased in the EU. Ireland (19.2% in 2015), Greece (17.2%), Spain (14.9%), Belgium (14.6%) and Croatia (13.6%) had the highest proportions of those living in very low work intensity households, while Estonia (5.8%), Poland (6.4%) and Slovakia (6.5%) had the lowest. Compared with 2008, the share of persons aged 0-59 living in households with very low work intensity has increased in a majority of Member States (eighteen), while it decreased in seven.

The at-risk-of-poverty rate is the share of people whose total household income that is available (after social transfers, tax and other deductions) for spending or saving is below the at-risk-of-poverty threshold, which is set at 60% of the national median equivalised disposable income after social transfers.

This indicator does not measure wealth or absolute poverty, but low income in comparison to other residents in that country.

The threshold depends on the income distribution in a country for a given year and varies with the composition of a household. It is therefore important to note that the at-risk-of-income-poverty rate is a relative measure of poverty and that the threshold varies greatly between Member States. It also varies over time as it follows the evolution of the national median disposable income: in a number of Member States the threshold has fallen over the period 2008-2016 (Greece, Cyprus and Ireland) or stayed nearly stable (Spain, Italy and Portugal) due to the economic crisis.