Poverty rates in Europe have long remained a persistent challenge, even as employment levels have increased over recent decades.
A comprehensive study led by researchers at the University of Oxford proposes that changes in household structures and employment patterns may offer crucial insights into this paradox. This research suggests that a deeper understanding of these factors is essential for crafting effective poverty reduction strategies across both European and national levels.
The Changing Landscape of Poverty in Europe
Despite rising employment rates, poverty rates have remained relatively unchanged, raising questions about the effectiveness of current poverty reduction policies. The study, published in the Journal of European Social Policy, highlights how shifts in household compositions—particularly the rise of single-adult households and the increase of dual-income households—have had significant direct and indirect effects on poverty dynamics across Europe. These changes have implications for how poverty is measured and addressed, particularly when relying on relative income poverty thresholds.
The research draws on a detailed examination of European countries' experiences since the 1980s, showing that trends in household structure and employment patterns must be considered to accurately understand poverty. According to the study, relying solely on income-based measures may not fully capture the complexity of poverty, particularly when examining long-term trends and aggregate poverty levels.
Implications for European Policy
Leo Azzollini, lead author of the study and researcher at the Institute for New Economic Thinking and the Department for Social Policy Intervention, points out that there is a disconnect between increasing employment rates and the reduction of poverty. The European Union’s poverty reduction goals, particularly those set out in the Europe 2020 strategy, have not been achieved despite employment reaching record highs before the COVID-19 pandemic. Specifically, the EU-AROPE (At Risk of Poverty and Social Exclusion) target failed to be met by 2020, with income-based poverty rates either stagnating or rising in many member states since 2005.
Azzollini argues that boosting employment rates, though necessary, is insufficient on its own for reducing poverty. In particular, employed individuals in single-income households with children remain at a high risk of poverty. He suggests that a targeted approach is required, focusing on two main categories: the “working poor,” who are employed but still live in poverty, and the “non-working poor,” who are outside the labor market. Addressing the needs of both groups requires a dual focus on activating employment opportunities and providing adequate support for those already in the workforce, especially working parents.
Household Structure and Employment Patterns: A Holistic View
Co-author Richard Breen of Nuffield College, University of Oxford, emphasises the importance of understanding both household structure and employment patterns when analysing poverty trends. He explains that focusing on isolated factors—whether changes in household structure or the labor market alone—can obscure the broader implications of these shifts.
The study also underscores the need to consider the quality of jobs in terms of wages and benefits. Many jobs, while offering employment, may not provide adequate pay to lift individuals out of poverty. Similarly, the capacity of social protection systems to support those out of work plays a critical role in mitigating poverty. Breen suggests that policy-makers should prioritise strategies that target jobs for hard-to-reach groups, contributing significantly to more effective poverty reduction at both European and national levels.
Rethinking Poverty Measurement
The study also has significant implications for the way poverty is measured. Professor Emeritus Brian Nolan of the University of Oxford discusses the limitations of using relative income thresholds alone as a measure of poverty. While this approach is commonly used in both research and policy evaluation, Nolan highlights the growing recognition that relative income thresholds may not fully capture the scope of deprivation. This is reflected in the EU’s broader social inclusion framework, which includes complementary income poverty thresholds and non-monetary deprivation indicators.
Key Data Insights
The research utilised data from household surveys collected in the Luxembourg Income Study (LIS) from 1986 (or the closest available year) to 2019 (or the closest available year), allowing the research team to track the evolution of household structures and employment patterns over a significant time period. This comprehensive data set provides a deeper understanding of long-term trends, offering valuable insights that are often not captured by shorter-term datasets such as the EU-SILC.
Conclusion
The findings of this research present a clear message: poverty in Europe cannot be effectively addressed by employment policies alone. A nuanced approach, integrating both household structure and employment patterns, is essential for understanding the full scope of poverty and developing policies that address its root causes. The study’s implications extend beyond income thresholds, highlighting the importance of quality employment, adequate social protection, and targeted interventions for both the working and non-working poor. With these insights, European and national policies can be better aligned to reduce poverty and meet the EU’s ambitious social inclusion goals.
By focusing on these multifaceted aspects of poverty, Europe can enhance its poverty reduction strategies and work toward a more inclusive and equitable future.
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