Poor Children in Europe.Poor Children in Europe.An Analytical Approach to the An Analytical Approach to the Study of Child Poverty, in the Study of Child Poverty, in the European Union, Between 1994 European Union, Between 1994 and 2000and 2000

Supervisors

Gian Lorenzo Venturini

Prof. Jos Berghman

Katholieke Universiteit Leuven

PhD program in Social Sciences

Prof. Chiara Saraceno

Università degli studi di Torino

PhD program in Comparative Social Research

Structure of the Presentation

I. The need for an analytical approach

II. The general features of the research design

III. Accounting for the situational mechanism

IV. Accounting for the action-formation mechanism

V. Summary of the findings

1. The cognitive question

Mt+

1

Mt

Child poverty at time t

Child poverty at time t+1

Intensity

Incidence

presistence

Child poverty in Europe between 1994 and 2000

2. An Epistemological and Empirical Empasse

When we deal with such issues we have to fight against two When we deal with such issues we have to fight against two ISMsISMs

Micro-riductionism

Structuralism

Micro

Macro

«Paradigm of structure»

Micro

Macro

«Paradigm of action»

Mac

ro

an empasse…

Mac

ro &

micr

o

Analytical level

The level of the issue that I aim to explain

Theoretical level

The heuristic potential of the theoretical system I aim to apply

Wippler and Lindenberg (1987)

We need multilevel theories of child povertyWe need multilevel theories of child poverty

3. Multilevel theories of child poverty

4. A Solution to the Dilemma: The Coleman’s Boat

mm

tt

mmt+t+

11

MMtt MMt+1t+1

The situational mechanism

The transformational

mechanism

The action-formation

mechanism

The situational mechanismThe situational mechanismIt refers to the fact that actors live in a specific social situation that, to some extent, affects them and the environment in which they live

The transformational mechanismThe transformational mechanismIt depicts how the actions of different actors collide with one another and generate collective macro outcomes

The action–formation mechanismThe action–formation mechanism It considers the way in which individuals’ actions take a form

5. Coleman’s Boat Implementation

Cognitive aims Implementation strategies

Description of the macro environment in which individuals live (the situational mechanism)

Analysis of theories on welfare regimes Reconstruction of the main social policy schemes Estimation of macro indicator national wealth,

income inequalities, social protection expenditures and income poverty and material deprivation

A micro model to account for poverty risks at a micro level

Operazionalization of the concept of poverty and endowment

Estimation of the impact of parents/households’ endowment on the probability for a child to be poor, via a random-effect logistic model

Merging the micro and the macro findings Discussion of the main findings

6. The General Features of the Research Design

Germany

Denmark

Belgium

France

UK

Italy

Spain

«Data»

The first ECHP seven waves (1994-2000)

Literature

EUROSTAT

Cross-country comparison

Multiple case study based on holistic cases (Yin, 2003)

«Replication logic» as opposed to the «sampling logic» (see Yin, 2003, p.45)

7. Other Theoretical and Methodological Issues

1. The operazionalization of the concept of poverty (see Ravallion, 1992)

i) How do we assess individual well-being? Household’s equivalized disposable income

ii) At what level of well-being we can say that a person is not poor?60% of the median of the equivalized income distribution

iii) How do we aggregate individual indicators of well-being into a measure of poverty?Headcount ratio (poverty incidence)

Average poverty gap ratio (poverty intensity)

2. A model of the social actor

The D-B-O model (see Elster 1993)

Contributions to describe the «situational mechanism»

Theories

Policy analysis

Data

Structure of intra-household care giving obligations and family policies

Pathways of interaction among Family-State-Market

Policy strengthening prevention and children’s well-being

Policy Reducing households’ expenses

Bring people into work that pays;Improving living standard through direct cash transfer.

Policy increasing households’ resources

8. The Description of the Situational Mechanism (MACRO)

Trends in national wealth, income inequalities and social protection

expenditure

Trends in child poverty

Trends in household poverty

Household poverty

incidence

Household poverty rates

Household poverty intensity

Average household

poverty gap ratio

Child poverty duration

Child poverty incidence

Data

Child poverty rates

Child poverty incidence reduction after social transfers

Child poverty intensity

Average child poverty gap ratio

Child poverty intensity reduction after transfers

First child poverty spell duration (Survival Analysis)

Proportion of children experiencing a second poverty spell

Child deprivation

Incidence of deprivation

First deprivation spell duration (Survival analysis)

GDP per capita, in PPSIncome share of the 10th decileSocial protection expenditure as a proportion of GDPSocial protection expenditure, per capita, in PPSDetailed social protection expenditure, per capita, in PPSSocial benefits expenditures by type, per capita, in PPSSocial benefits expenditures by function, per capita, in PPSDegree of heterogeneity of the pattern of social protection expenditure

0%

5%

10%

15%

20%

25%

30%

35%

1994 1995 1996 1997 1998 1999 2000

De Dk Be Fr UK It Es

Continental cluster: is split up into two parts

Dk, It: stableBe, De: decreasingUK: steepest reductionFr, Es: increasing

9. The Macro data: Child Poverty Incidence

•De, Be are sliding north and coming closer to Denmark;

•Fr is sliding south and moving nearer to Spain, Italy and the UK

0

2

4

6

8

10

12

1994 1995 1996 1997 1998 1999 2000

De Dk Be Fr UK It Es

9. The Macro Data: Child Poverty Intensity

Dk, Fr, It, Es: stable

Be, De, UK: decreasing

00 ,10 ,20 ,30 ,40 ,5

0 ,60 ,70 ,80 ,9

1

0 1 2 3 4 5 6 7

D e D k B e F r U K I t E s

D k D e B e F r U K I t E s 2 5 t h p e r c e n t i l e 1 1 1 1 1 1 1

M e d ia n 1 2 2 3 3 3 3

χ 2 = 3 3 .0 0 ( 6 d e g r e e s o f f r e e d o m ) L o g - r a n k te s t

P > χ 2 = 0 .0 0 0 0

9. The macro data: child poverty presistence

Dk: low

Be, De: medium

Fr, It, Es, UK: high

0

0,1

0,2

0,3

0,4

0,5

0,6

0,7

1 2 3 4 5 6 7

Dk Be Fr It Es

Dk Be Fr It Es 25 th percentile 1 1 1 1 1 M edian 2 1 2 2 2 75 th percentile - 4 5 6 4

χ2= 23.98 (4 degrees of freedom) Log-rank test

P> χ2= 0.000

See: current life-style deprivation (Whelan and Maître 2004)

9. The macro data: child presistence in deprivation

Dk: low

Be, Es: medium

Fr, It: high

SR Oi's endowment

SR OBlack-box

The individuals’ endowment

Set of material and immaterial resources transmitted by the macro environment in which i lives (see the situational mechanism), accumulated or wasted by i in the past (see i’s foregoing actions), made available as well as unavailable by other individuals’ action (see j…n’s actions) and mediated by the individual’s desires and beliefs.

The parents’ endowment

Set of material and immaterial resources parents can resort to, to prevent the risk of poverty for their dependent children

The Concept of Endowment

10. A Micro Model to Account for the Action-Formation Mechanism

Parents’ endowmentParents’ endowmentmicromicro

Child poverty risksChild poverty risks

Child poverty outcomesChild poverty outcomes

Ex-post intervention

«Re-equalizing»

Situational mechanismSituational mechanismMacroMacro

Family and MarketFamily and Market

Situational mechanismSituational mechanismMacroMacro

State, welfare regimeState, welfare regime

Ex-ante intervention

«Empowering»

The higher the «correlation» between parents endowment The higher the «correlation» between parents endowment and child poverty outcomes, the higher the level of and child poverty outcomes, the higher the level of

inequalitiesinequalities

Status on poverty at time t

Mother’s highest level of education completed

Father’s highest level of

education completed

Household’s educational endowment

Mother’s position of the labour

market

Father’s position of the labour

market

Household’s occupational endowment

Household’s

demographic

endowment

Number of dependent children

Parents’ citizenship

Parents’ age

Household’s

health endowme

nt

Mother’s

health status

Father’s health status

Children’ age

Children’ sex

Household’s economic endowment

Mother’s main source of income

Father’s main source of income

11. The Operationalization of the Concept of Endowment

Number of dependent children Three or more Two One

Father’s/mother’s citizenship Non-national National

Father’s and mother’s age Child’s age

Socio-demographic endowment

Child’s sex Father’s/mother’s occupational status

Not working Working part-time

Occupational endowment

Working full-time Father’s/mother’s main source of income

Social transfers or private income Economic endowment Income from work

Father’s/mother’s level of education Recognised third level education (ISCED 5-7) Second stage of secondary level education (ISCED 3)

Educational endowment

Less than second stage of secondary education Father/mother health status

Individual has a chronic physical or mental health problem Health endowment Individual has no chronic physical or mental health problem

12. The Micro Model: general features

3. Modelling Panel Data

Random-effect logistic model

4. Unit of AnalysisChildren, younger than 15 y.o., living with a parental couple

Since the explanandum is operationalized as a dummy variable, I opted for the logistic regression

1. The statistical tool

2. Modelling Cross-country Comparison

Country is treated as a stratification variable. Therefore the same model has been estimated over 7 different samples (one for each country) and odds-ratio are compared.

5. Controlling factorsFather’s and mother’s age

Child’s age and sex

Father’s and mother’s citizenship (national/non national)

Father’s and mother’s health status

Unobserved heterogeneity (see random-effect model)

13. The Micro Model: Controlling factors and reference categories

Let us define this as the baseline - the theoretically most protective endowment

Reference categories in the random-effect logistic regression

Household’s demographic endowment One dependent child

Household’s economic endowment Father’s main source of income: income from

workMother’s main source of income: income from work

Household’s occupational endowment

Father: full-time workerMother: full-time worker

Household’s educational endowmentFather’s highest level of education completed: high (recognised III level education)Mother’s level of education: high (recognised III level education)

Let us observe the odds ratios

Are child poverty risks endowment-dependent?Are child poverty risks endowment-dependent?

14. Testing the hypothesis: endowment dependency of child poverty risks

A. Significantly higher than 1Child poverty risks are endowment dependent:the weaker the endowment the higher the risks

B. No significant differences Child poverty risks are not endowment dependent

Dk Be De Fr UK Es It

Three or more dependent children 1,96* 1,12 3,59** 1,49* 10,70** 5,38** 3,55*

Two dependent children 1,25 1,95* 1,55* 1,27 1,45 1,75** 1,45*

Father’s main source of income: social transfers or private income

12,67** 39,77** 23,51** 11,98** 8,25** 14,28** 4,97*

Mother’s main source of income: social transfers or private income

5,58** 3,02** 3,72** 5,78** 4,48** 3,99** 3,48*

Father not working 0,56 1,27 3,20** 2,11** 12,38** 2,53** 2,62**

Father working part-time 0,32 0,22 1,41 3,58 10,40** 4,02** 4,85**

Mother not working 0,58 3,27** 1,33 2,64** 5,55** 1,26 2,53**

Mother working part-time 0,77 2,62* 2,35** 7,54** 2,08* 2,54** 0,27**

Mother’s level of education: low 1,51 1,33 2,20* 3,70** 1,70* 4,27** 7,19**

Father’s level of education: medium

1,73 2,14** 4,75** 4,37** 0,97 2,00** 2,96**

Mother’s level of education: medium

1,35 1,58 2,17** 2,93** 0,99 1,24 2,08*

Father’s level of education: low 1,04 2,91** 8,33** 10,25** 4,17** 6,71** 8,70**

Random-effect logistic regression, odds ratios

* Significant for p<0,05** Significant for p<0,01

LowLow MediumMedium HighHigh

Predicted probability to be a

poor child (Average values)

Dk 21,2% Be 79,7%

De, It, Fr 87,5% - 89,1%

UK, Es 99,8% - 96,6%

Children with at least two siblings, whose parents:

•are not working•have social transfers or private income as their main

source of income •have low educative credentials•suffer of a physical or mental disability

LowLow

MediumMedium

HighHigh

15. Summary of the Findings: Denmark, the Benchmark

• The lowest levels of child poverty incidence, intensity and presistence

• The lowest level of child deprivation incidence and presistence

• Child poverty risks depend on parents’ endowment to a very low extent

• The highest per capita GDP

• One of the highest per capita GDP growth rate (in PPS)

• The highest level of social protection expenditure (as a proportion of GDP and in PPS per capita)

At the micro level

At the macro level

• The lowest level of income inequalities

Re-equalizing effectRe-equalizing effect

A comparatively higher capacity of the macro A comparatively higher capacity of the macro welfare-triangle to counteract endowment welfare-triangle to counteract endowment

inequalities causes child poverty risks to be lowinequalities causes child poverty risks to be low

At the macro level

16. Summary of the Findings: Germany, Belgium and France, the Halfway Position with a Northern/Southern Shift

• The overall economic wealth appears to be more equally distributed among the population than in Italy and Spain

• Income inequalities faced a small decline in France and they kept stable in Germany

• Higher levels of social protection expenditure than in Italy and Spain, that succeeded in alleviating child poverty incidence and intensity to a progressively higher extent

• Child poverty incidence has been generally stable or decreasing in Belgium and Germany, but increasing in France

• Level of per capita GDP in PPS and GDP average growth rate lower than in Denmark and similar to Italy and Spain.

• Child poverty presistence is higher in France than in Belgium and Germany

• Child deprivation is higher in France than in Belgium

At the micro level• Child poverty risks are less dependent on parents’ endowment in Belgium

than in Germany and France

Halfway position. Yet the cluster is splitting up: Halfway position. Yet the cluster is splitting up: Belgium, and to some extent Germany, Belgium, and to some extent Germany, sliding sliding

north,north, while France while France sliding southsliding south

17. Summary of the Findings: The UK, a country in transition

Issue Changes between 1998 and 2003 Child benefit Benefit increased twice as much as the inflation rate

Complement for first child increased by 40% Complement for lone parent families is eliminated

Family credit Eliminated Income support/ JSA Child complement eliminated Child tax credit Means-tested benefit for families with children

Amount is the sum of a fixed rate per family (family element) and a fixed rate per child (child element) Each element is tapered at different income thresholds and with different withdrawal rates

Working tax credit Means-tested in-work benefit Hours condition for parents is lower The basic amount is higher for lone parents and couples with or without children Families with children where all parents work are entitled to a refund for childcare costs

Housing benefit and Council tax benefit

Updated above the inflation rate The complement is the same for all children’s ages Complement for lone parents is eliminated

Additions to some insurance benefits

Child additions eliminated

Changes at the policy level, during the 1998-2003 period (See Levy, Lietz, Sutherland, 2005)

• The second higher average annual increase of per capita GDP in PPS

• Small increase of income inequalities

• UK shares the features of the southern European countries: high levels of child poverty incidence and intensity; one of the highest degrees of child poverty presistence (both in terms of the first observed child poverty spell duration and chances for the children to fall back into poverty)

At the macro level

At the micro level

•Child poverty risks are still endowment dependent

• Low level of social protection expenditures (as a % of GDP and in PPS per capita), but the highest average annual increase of per capita expenditure in PPS

•Yet: child poverty incidence and intensity has been clearly declining

Such transformations are likely not to be fully Such transformations are likely not to be fully reflected in the micro data at our disposal. A time reflected in the micro data at our disposal. A time

lag is likely to exist between the point in time when lag is likely to exist between the point in time when a change at the macro level takes place and the a change at the macro level takes place and the moment when it is perceived at the micro levelmoment when it is perceived at the micro level

Mismatch between changes at the policy level, Mismatch between changes at the policy level, poverty outcomes and endowment effect estimated poverty outcomes and endowment effect estimated

on the ECHP (1994-2000)on the ECHP (1994-2000)

18. Summary of the Findings: Italy and Spain, the intergenerational transmission of poverty

•The lowest per capita GDPItaly: the lowest average annual GDP growth rateSpain: the highest average annual GDP growth rate

•By far, the lowest level of social protection expenditure Decreasing, in terms of GDP Increasing, but less than in the other countries, in term of PPP

per capita. •The most polarized pattern of social transfer provision (the

overwhelming majority going to pensions and public health care)

•Low levels of employment rates, especially among females

At the macro level

•Higher rates of long-term unemployment

•Lower effectiveness of the social transfer in reducing moderate and extreme child poverty, both in terms of incidence and intensity

•The highest level of income inequalities

At the micro level

• Poverty risks for households with very weak endowments are far higher than in the other countries

• Child poverty risks strongly depend on the configuration of the parents endowment

Deprivation experienced Deprivation experienced during childhood interferes during childhood interferes with the process of with the process of construction of protective construction of protective endowmentsendowments

Child poverty incidence, Child poverty incidence, intensity and presistence is intensity and presistence is much higher in Italy and much higher in Italy and SpainSpain

In Italy and Spain, child In Italy and Spain, child poverty risks are strongly poverty risks are strongly endowment-dependentendowment-dependent

Intergenerational Intergenerational transmission of transmission of

povertypoverty

19. Limits of the study

Difficulties in investigating both the macro and the micro Difficulties in investigating both the macro and the micro level deeplylevel deeply

Difficulties in merging the macro and micro findings into a Difficulties in merging the macro and micro findings into a multilevel theorymultilevel theory

I disregarded the transformational mechanismI disregarded the transformational mechanism

A great deal of attention to A great deal of attention to describingdescribing; far less attention to ; far less attention to explainingexplaining