A new poverty indicator for Europe: the extended headcount ratio
The methodology currently used to measure poverty in the European Union faces some important limitations. Importantly, capturing the major aspects of poverty is done using a dashboard of indicators, which often tell conflicting stories. We propose a new income-based measure of poverty for Europe that captures in a consistent way the level of relative poverty, the intensity of poverty, poverty with a threshold anchored in time and a pan-European perspective of poverty in a single indicator. To do so, we work with a recently developed poverty index, the Extended Headcount ratio (EHC), and derive the relevant poverty lines to apply the index to poverty in Europe. We show empirically that our measure consistently captures the aspects typically monitored using a variety of indicators, and yield rankings that seem more aligned with intuitions than those obtained by these individual indicators. According to our measure, Eastern Europe is much poorer than Southern Europe, which, in turn, is much poorer than North-Western Europe. The evolution of our measure over time correlates most strongly with the at-risk-of-poverty rate in North-Western Europe and correlates most strongly with at-risk-of-poverty with the threshold anchored in time in Southern and Eastern Europe.
Date: 11 February 2021, 11:00
Venue: Virtual Seminar via Zoom (please register to attend)
Speaker: Tim Goedemé (Employment, Equity & Growth Programme, INET Oxford)
Organising department: Institute for New Economic Thinking
Organiser: Susan Mousley (INET Oxford Admin Team)
Organiser contact email address: events@inet.ox.ac.uk
Part of: INET Oxford Researcher Seminars
Booking required?: Required
Booking url: https://us02web.zoom.us/meeting/register/tZwufu6qrjMjGdDLeDaiedxbOEH10jQPiE1p
Audience: Public
Editor: Susan Mousley