WP 12 – Challenges of current tools

As has been already explained elsewhere, until today important questions of validity and robustness of the main Europe 2020 poverty reduction indicators remain unanswered (i.e. the at-risk-of-poverty indicator, the indicator severe material deprivation and the indicator of very low work intensity). Therefore, in this work package the strengths and weaknesses of the Europe 2020 poverty and social exclusion indicators will be assessed from a theoretical and empirical perspective. In addition, routes for further refining the indicators will be developed.

In order to do so, we will

• first construct an appropriate theoretical framework for operationalising and evaluating the relative character of poverty. Subsequently, we will evaluate how the Europe 2020 poverty indicators fit into this framework and we will investigate to what extent reference budgets could be expected to better grasp the minimum acceptable living standard in both richer and poorer EU member states. An empirical test of the relativity of poverty on the basis of reference budgets will be performed in WP 13.
• Second, we will test the empirical robustness and comparability across time, households and countries of the relatively new material deprivation and work intensity indicator. For the indicator of material deprivation we will use EU-SILC data and pay particular attention to the specific module on material deprivation of the 2009 wave, which provides an excellent opportunity to get more insight into deprivation in the EU in general, and to validate the existing deprivation indicator (against alternative constructs involving other deprivation items) in particular. In the case of the work intensity indicator we will – among others – compare results on the basis of EU-SILC with those on the basis of the Labour Force Survey (EU-LFS). As both data sets enable the construction of similar indicators, the results of EU-SILC can be compared to those obtained when using the larger EU-LFS dataset.
• Finally, we will assess to what extent the different indicators grasp different population groups in different countries and to what extent they do overlap. We will cover all EU member states which are available in the EU-SILC and EU-LFS User Databases for a selection of years between 2005 and 2011.

The results of this work package will deepen our understanding of the indicators used for assessing the evolution of poverty in the European Union, enriching the analyses performed especially in the work packages 1, 2, 5, 7 & 13 as well as 15. On the basis of the results of this work package and the input of the associated key-experts, we will develop a set of recommendations for improving the validity and comparability of the official EU poverty indicators. The results will be presented on a seminar targeted at members of the Indicators’ Subgroup (ISG) of the European Commission as well as researchers working with the Europe 2020 social inclusion indicators.

Each of the associates will contribute to the work package with a paper on one of the indicators: Eric Marlier with a paper on recent developments with regards to the Laeken indicators in general and the at-risk-of- poverty indicator in particular, Conchita D’Ambrosio with a paper on the indicator of material deprivation, and Terry Ward with a paper on the work intensity indicator.