Vulnerability and multiple deprivation perspectives on economic exclusion in Europe: A latent class analysis

<p>In this paper we address issues relating to vulnerability to economic exclusion and levels of economic exclusion in Europe. We do so by applying latent class models to data from the European Community Household Panel for thirteen countries. This approach allows us to distinguish between vulnerability to economic exclusion and exposure to multiple deprivation at a particular point in time. The results of our analysis confirm that in every country it is possible to distinguish between a vulnerable and a non-vulnerable class. Association between income poverty, life-style deprivation and subjective economic strain is accounted for by allocating individuals to the categories of this latent variable. The size of the vulnerable class varies across countries in line with expectations derived from welfare regime theory. Between class differentiation is weakest in social democratic regimes but otherwise the pattern of differentiation is remarkably similar. The key discriminatory factor is life-style deprivation, followed by income and economic strain. Social class and employment status are powerful predictors of latent class membership in all countries but the strength of these relationships varies across welfare regimes. Individual biography and life events are also related to vulnerability to economic exclusion. However, there is no evidence that they account for any significant part of the socio-economic structuring of vulnerability and no support is found for the hypothesis that social exclusion has come to transcend class boundaries and become a matter of individual biography. However, the extent of socio-economic structuring does vary substantially across welfare regimes. Levels of economic exclusion, in the sense of current exposure to multiple deprivation, also vary systematically by welfare regime and social class. Taking both vulnerability to economic exclusion and levels of exclusion into account suggests that care should be exercised in moving from evidence on the dynamic nature of poverty and economic exclusion to arguments relating to the superiority of selective over universal social policies.</p>