Moving in and out of poverty - The impact of welfare regimes on poverty dynamics in the EU

Although many of the debates around social exclusion and cumulative disadvantage relate to processes that occur across time, there has been relatively little research into poverty dynamics except in a few notable countries such as Britain, the USA and Germany. This neglect is almost entirely because of the absence of comparative longitudinal data on income for other countries, but it is regrettable given the central importance of this area. By studying poverty dynamics we not only get a better insight into the processes leading to patterns of disadvantage and inequality, but we can also understand better the influence of different welfare state regimes on the social risks experienced by different types of individuals and households. The extent to which different national contexts protect their citizens from poverty persistence, or vary in the factors leading to poverty persistence, tells us a great deal about the workings of their socioeconomic systems and welfare regimes.

In this article we use the recent availability of five waves of the European Community Household Panel Survey to outline the nature of poverty persistence and poverty dynamics across a large number of countries. In doing so we ask three important questions. First, is poverty a more common experience when viewed longitudinally rather than cross-sectionally, and how is this affected by the income poverty line used? Second, can we identify a tendency toward poverty persistence, and does this vary in its extent across countries? Third and lastly, what types of events are more likely to lead to entry into and exit from poverty, and does the importance of these events differ between countries? The article shows that the experience of poverty is far wider than is appreciated from cross-sectional data, and also tends to be more concentrated on a particular population than would be expected from cross-sectional rates. Moreover, the pattern of poverty persistence is congruent with welfare regime theory. The importance of country institutions and welfare regimes is also underlined by the finding that social welfare and market incomes play different roles in poverty transitions across countries, and that Southern European, or residualist, welfare regimes focus poverty risks on the experience of the household's primary earner to a far greater extent than Northern European welfare states do.

Social Class Variation in Risk: A Comparative Analysis of the Dynamics of Economic Vulnerability

A joint concern with multidimensionality and dynamics is a defining feature of the pervasive use of the terminology of social exclusion in the European Union. The notion of social exclusion focuses attention on economic vulnerability in the sense of exposure to risk and uncertainty. Sociological concern with these issues has been associated with the thesis that risk and uncertainty have become more pervasive and extend substantially beyond the working class. This paper combines features of recent approaches to statistical modelling of poverty dynamics and multidimensional deprivation in order to develop our understanding of the dynamics of economic vulnerability. An analysis involving nine countries and covering the first five waves of the European Community Household Panel shows that, across nations and time, it is possible to identify an economically vulnerable class. This class is characterized by heightened risk of falling below a critical resource level, exposure to material deprivation and experience of subjective economic stress. Cross-national differentials in persistence of vulnerability are wider than in the case of income poverty and less affected by measurement error. Economic vulnerability profiles vary across welfare regimes in a manner broadly consistent with our expectations. Variation in the impact of social class within and across countries provides no support for the argument that its role in structuring such risk has become much less important. Our findings suggest that it is possible to accept the importance of the emergence of new forms of social risk and acknowledge the significance of efforts to develop welfare states policies involving a shift of opportunities and decision making on to individuals without accepting the 'death of social class' thesis.

Understanding the mismatch between income poverty and deprivation: A dynamic comparative analysis

In this paper we seek to shed light on the mismatch between income poverty and deprivation through a comparative and dynamic analysis of both forms of disadvantage. By extending analysis over five waves of the ECHP we are able to take into account the key dimensions characterizing poverty profiles overtime. Our conclusions turn out to be remarkably stable across countries. While persistent income poverty measures are systematically related to both cross-sectional and longitudinal measures of deprivation, the scale of mismatch is no less at the latter than at the former level. There is some evidence that although rates of volatility for income and deprivation measures are roughly similar, the processes of change themselves are somewhat different. Further light is shed on the underlying processes by cross-classifying the forms of deprivation. Those exposed to both types of deprivation are differentiated from others in terms of need and resource variables. Conclusions relating to the socio-demographic influences on risk levels are influenced by choice and combination of indicators. The results of our analysis confirm the need to devote considerably more attention than heretofore to the analysis of multi-dimensional poverty dynamics.

Comparing poverty and deprivation dynamics:Issues of reliability and validity

In this paper we seek to establish if earlier findings relating to the relationship between income poverty persistence and deprivation persistence could be due to a failure to take measurement error into account. To address this question, we apply a model of dynamics incorporating structural and error components. Our analysis shows a general similarity between latent poverty and deprivation dynamics. In both cases we substantially over-estimate the probability of exiting from poverty or deprivation. We observe a striking similarity across dimensions for both observed and latent outcomes. In both cases levels of poverty and deprivation persistence are higher for the latent case. However, there is no evidence that earlier results relating to the differences in the determinants of poverty and deprivation persistence are a consequence of differential patterns of reliability. Taking measurement error into account seems more likely to accentuate rather than diminish the contrasts highlighted by earlier research. Since longitudinal differences relating to poverty and deprivation cannot be accounted for by measurement error, it seems that we must accept that we are confronted with issues relating to validity rather than reliability. Even where we measure these dimensions over reasonable periods of time and allow for measurement error, they continue to tap relatively distinct phenomenon. Thus, if measures of persistent poverty are to constitute an important component of EU social indicators, a strong case can be made for including parallel measures of deprivation persistence and continuing to explore the relationship between them. © Springer Science+Business Media, Inc. 2006.