Poverty in Europe: the Current Situation

16.4 % of the European population is poor. According to country, age, gender or origin, the poverty rates are varying considerably.

The situation in 2010

16.4 % of the population, 80 million people, live below the poverty threshold in the European Union, if fixing the threshold at 60 % of national median income, on the basis of 2010 data (see box). The Czech Republic (9 % of the population), the Netherlands (10 %), Austria and Hungary (12 %) are the countries where poverty is lowest. With a rate of 13.5% the poverty rate of France is also among the lowest in Europe, just after the Nordic countries (around 13 %). The highest rates, superior to 20 %, are observed in eastern Europe, in Romania and Bulgaria. Spain and Greece have similar poverty levels of about 20 %: these two countries are seriously affected by the economic crisis and have seen their unemployment rate rise considerably, especially among the youngest.
Caution must however be paid, since the poverty thresholds could differ from country to country (see below).

Considering the thresholds at 40 and 50 % of national median income, the hierarchies and disparities between the countries are somewhat overthrown. At the 40 % -threshold, the poverty rate of Denmark corresponds to the one of the United Kingdom (5.5 %): thus, in proportion, a similar “great poverty” exists in both countries. This means that the disparity between the two countries is most apparent, not at the bottom of the poverty scale, but when considering poor families in general. Spain shows the highest rates in Europe (9.8 %), while the French rate is identical to the rate in Sweden (3.7 %), one of the lowest on the continent. At the threshold of 50 %, Spain is still one of the countries, together with Bulgaria and Romania, where poverty remains highest (around 15 %). The poverty rate of the United Kingdom (9.8 %) comes up to the European average (10 %), while the French rate (7.4 %) is a little above the Swedish one (7 %). The lowest level can be observed in the Netherlands (4.9 %), before the Czech Republic (5.2 %) and Finland (5.5 %).

Poverty thresholds in Europe

Poverty is measured in relation to the median living standard of each country. Thus, the living standards of poor people in rich countries can not be compared to the poor in poor countries. The United Kingdom for example counts 17 % of poverty, but the poverty threshold at 60 % is 853 Euro per month and per person, against 176 Euro for Romania, which counts 21 % of poor people. The British poverty threshold is 2.8 times higher than the Romanian median income. These different thresholds are usually calculated with the purchasing power: thus they consider the differences of living standards between countries. The 10 % richest living in Romania would be among the 10 % poorest in the United Kingdom…

The highest threshold for the 60 % poverty rate is the Austrian one (958 Euro per month), ahead of the Netherlands and Sweden (thresholds above 900 Euro). The French poverty threshold is among the highest (877 Euro) while the Romanian threshold (176 Euro) is the lowest in Europe.

Which poverty threshold to chose?

The poverty rate corresponds to a part of the population which lives with a disposable income below the poverty line. This corresponds to a percentage of the national median income, which divides the population into two groups, those receiving less that that income, and others more.

The threshold most commonly used is 60 % of the median income. This is a convention. Some estimate that the use of the 50 % -threshold is more representative and that the one at 40 % allows focusing on the “great poverty”. For others, the 60 % -threshold constitutes a more large definition which allows including the poor population with no access to basic needs.

Poverty according to gender

Across the European Union, the poverty rate of women is higher than of men: it is at 17.1 % against 15.7 % for men (data from 2010). The gaps of poverty levels to the detriment of women are highest in Romania, Sweden, Austria and Italy (about 3 percentage points). Conversely, only Hungary shows a higher poverty rate for men with a rather small gap (+0.6 percentage points). Denmark and Poland are the most egalitarian countries (0.3 percentage points of difference).
With a gap in the poverty level of 1.3 percentage points to the detriment of women, France is situated at the level of the European average.

Poverty according to age

1- Children under 16 years

20.2 % of children under 16 years of age are poor in Europe. The northern countries show a lower rate, from 10 % for Denmark to 12.4 % for Sweden. In return, the highest rates are observed in Romania (31.3 %) and in Bulgaria (26.4 %) or even in Spain (25.3 %). The poverty rate of young people under 16 years in France is below the European average (18.4 %).

Children are only poor because they live in a poor family. Either the family income is to low (low salaries, unemployment, job instability, part-time…), or there are too many family members sharing one (in the case of a single parent) or two incomes. Countries offering a higher level of social protection reduce partially the dependence of poverty on the family situation.

2- Young adults

The poverty rate of persons aged between 16 and 24 years is in average 21.6 % in Europe, still with the threshold at 60 %. The lowest rates are observed in the Czech Republic (12.6 %) or in Austria (13.1 %). The French poverty rate is above the European average (23.1 %). Only due to methodological reasons are the northern countries at the bottom of the ranking (see box). In turn, the situation of young people in Greece (27.8 %) is more distressing.

These rates are largely above the poverty rate for all age groups in most European countries. This can mainly be explained by the difficulty of finding an employment that in addition is stable: young people have a higher risk of holding precarious jobs, with a fixed-time contract or at part-time, and are also more exposed to unemployment. However precarious jobs have increased significantly in the last years and unemployment is soaring in some countries (the unemployment rate of young Spaniards approaches almost 50 % for example…).

Caution however: this data is highly controversial, especially due to methodological differences. Some countries do not count students, others do. In addition, countries with a high proportion of students (as in the case of northern countries) and which add them to their calculation, show mathematically higher rates of poverty: Students often live alone and it is difficult to measure the help they receive from their parents.

3- Working-age adults

14.8 % of European aged between 25 and 49 years and 13.5 % of those aged 50 to 64 years are poor. The lowest rates are observed in the Czech Republic, the Netherlands and northern countries. In return, the highest rates can be found in Romania (20.3 %), in Spain (18.6 %) or in Greece (18.1 %). With rates of 13.3 % and 8.4 % France perform better than the European average in both age groups.

For all countries, these poverty rates are equivalent to the average rate including all age groups. The data on poverty in this age group reflect without doubt most appropriately the situation in Europe, for they are less sensitive to methodological differences. Its is noteworthy that especially in Bulgaria the poverty rate is lower than in countries like Greece and Spain, which have been strongly affected by the crisis, or even Italy, although the poverty thresholds are very different.

4- The elderly

15.9 % of Europeans aged 65 years or more are poor. In Hungary the rate is lowest (4.1 %), ahead of the Netherlands (5.9 %) and the Czech Republic (6.8 %). Also the French poverty rate is among the lowest in Europe (9.7 %). Conversely, the highest rate can be observed in Bulgaria (32.2 %), so 10 percentage points more than the average poverty rate of this country. Northern Europe and Austria also have great gaps between their general poverty rate and the rate for the elderly. It is at 21. 7 % in Spain and 21.4 % in the United Kingdom.

The living standard of the retired depends on the pensions they receive…The amount depends on their former professions and their income level: Those who held a low-skilled employment or who worked part-time, or those with incomplete careers (especially women), often receive lower pensions. The countries do not offer the same level of pensions for their pensioners and especially not the same minimum benefits.

Poverty according to origin

The poverty rate of immigrants born outside the European Union is at 26.9 %, at 22.8 % for all immigrants, against 14.8 % for those Europeans living in their country of origin. The disparities according to origin are highest in Greece, Belgium and Finland: the gap between the poverty rate of immigrants and the others oscillates around 20 percentage points and between 25 and 28 percentage points between persons born outside the European Union and those born in the country where they live. In both cases, the disparity in France is higher than the European average: 26.8 % of the immigrants born outside a member state of the European Union are poor, against 10.8 % for persons born in France.

These differences are due to many different factors. In certain countries, some jobs are forbidden for foreigners, who are mostly immigrants (except those who have been naturalized). Migrants from different countries do not have the same social origin or the same age average: thus, the immigrants living in France are in general less qualified for example. In addition, the conditions for social protection benefits according to nationality differ in the countries.

Poverty according to households

The households most affected by poverty in Europe are those of single-parent families. 36.9 % of these households were affected by poverty in 2010. 26 % of households consisting of two parents and three or more dependant children are poor, just as are 25 % of persons living alone and 14.9 % of the households consisting of two parents and two dependant children, and at last 11.3 % for households of two adults without children.

The lowest poverty rates of single-parents families are in Denmark (20 %) and Finland (22 %). With an estimated rate of 35.7 % France is just below the European average. Bulgaria (42.3 %), Germany (43 %) and Spain (45.5 %) bring up the rear. According the type of household studied, the disparities between countries can be very significant: the poverty rate of households consisting of two adults and three or more dependant children reaches 65.2 % in Bulgaria and 60.4 % in Romania. This same rate is hardly higher than 11 % in Denmark and Finland.

The high extent of poverty of single-parent families is due to the fact that their resources are based only on one income, which is shared by all family members. But here also, depending on the level of social protection, countries balance partially the situation.

The reliability of the European data in question

The here presented data is based on Eurostat, the official European statistics organism. In order to compare countries, a common tool for statistical surveys has been set up, called EU-SILC (European Union Statistics on Income and Living Conditions).

However this tool is still far from perfection, making these sorts of comparisons questionable. The main problem for this is that for collecting information two different methodologies are applied. A first group of countries (especially northern Europe) collects information using administrative registers, while a second group (among which is France) collects information with surveys and interviews, either by post or telephone. In all cases, the countries are relying on representative samples of the population. But even there, the means to determine theses samples vary.

Other difficulties, which are specific for some section of the population, add up to this.
This is for example the case for young people aged from 16 to 24 years. Transfers within families are very difficult to measure, meaning financial help given by parents to their children for completing their studies or finding their first employment. Certain countries do not take students into account while others do. This is the reason why Denmark shows the highest poverty rate in Europe for this age group (32.2 %): students are taken into account with however no possibility of determining the family-internal transfers…

These methodological differences reduce the viability of comparisons between the countries in Europe. The low gaps between countries are thus not representative. But the comparisons are still useful, since they offer a global view of inequalities between the European populations, especially between the new member states (eastern Europe) and the others.

Photo : Benedetta Alosi


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26 January 2012

Themes : • Living condition • Poverty • Living condition • Living condition


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