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Christoph Schröder IW-Trends No. 1 1. March 2017 Poverty in Europe: A Multi-dimensional Approach

When discussed in public, poverty is often equated with relative income poverty. However, to define poverty exclusively in terms of low income is to see it too narrowly.

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A Multi-dimensional Approach
Christoph Schröder IW-Trends No. 1 1. March 2017

Poverty in Europe: A Multi-dimensional Approach

IW-Trends

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When discussed in public, poverty is often equated with relative income poverty. However, to define poverty exclusively in terms of low income is to see it too narrowly.

The at-risk-of-poverty rate, the proportion of the population earning less than 60 per cent of the median household income, is actually a very specific measure of income inequality. The Czech Republic fares best on this indicator, while with rates between 21 and 25 per cent the Baltic states, Greece, Spain, Romania and Bulgaria come out worst. Germany has a slightly below-average at-risk-of-poverty rate, putting it in the middle of the ranking. The EU defines as poor anyone forced by lack of resources to accept a lower standard of living. So-called consistent poverty is calculated as a combination of relative income poverty and material deprivation and therefore meets the EU definition. Alternatively, poverty can be measured as a lack of capabilities and opportunity for self-fulfilment. In the present study, the factors considered are income, material deprivation, education, gainful employment, housing and housing environment, and health, with the indicators for these factors being summarized in a multi-dimensional poverty index. The index ranks Norway, Sweden and Switzerland highest, with Bulgaria, Romania and Greece bring up the rear, a result similar to that for consistent poverty. In Germany, the poverty rate based on the two measures is considerably lower than the EU average. Subjective income poverty also correlates closely with the two multidimensional poverty measures. This makes the latter more suitable for depicting reduced circumstances and also more appropriate for setting policy goals in the fight against poverty.

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A Multi-dimensional Approach
Christoph Schröder IW-Trends No. 1 1. March 2017

Christoph Schröder: Armut in Europa – Eine multidimensionale Betrachtung

IW-Trends

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Acceptance of Parliamentary Procedures in the Light of Individual Problem Perception
Matthias Diermeier / Judith Niehues IW-Trends No. 3 15. September 2021

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Maximilian Stockhausen in Journal of Economic Inequality External Publication 17. August 2021

Like father, like son?: A comparison of absolute and relative intergenerational labour income mobility in Germany and the US

Are children better off than their parents? This highly debated question in politics and economics is investigated by analysing the trends in absolute and relative intergenerational labour income mobility for Germany and the US.

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