IPSWICH Follow-up committee: Incidence, composition and drivers of - PowerPoint PPT Presentation

IPSWICH – Follow-up committee: Incidence, composition and drivers of in-work poverty Jeroen Horemans Herman Deleeck - Centre for Social Policy 19/06/2017

Overview of the presentation The context • A story of a steady river and shifting undercurrents • Can the specific profile of non-standard workers explain - their increased poverty risk? Single parents as a particular risk-group - Mapping the rough and isolated landscape of the living • Standards and Poverty among the Self-employed Clarifying the policy conundrum •

The context 3

Employment and poverty: a macro perspective (1) Figure 1 Employment rate and at-risk-of poverty rate Europe, 2015 30 At-risk-of-poverty rate total population RO 25 LV BG EL LT ES EE IT PT 20 PL HR EU-28 UK DE CY MT IE SE HU 15 LU BE AT CH SL DK FR FI NO SK NL 10 CZ IS 5 45 50 55 60 65 70 75 80 85 90 Employment rate population age 20-64 Source: Eurostat: EU-LFS (lfsi_emp) and EU-SILC database (ilc_li) Note: for CH, HR, and IE the at-risk of poverty rate refers to the year 2014. 4

Employment and poverty: a macro perspective (2) Figure 2 Evolution employment rate and AROP rate, Europe, 2005-2015 Change at-risk-of-poverty rate total 6 EE population, 2005-2015 4 RO HU 2 LT SE ES NL EL IT LV SL PT BG CY NO LU CZ DE MT FR BE IE SK 0 PL FI IS HR DK UK AT CH -2 -4 -6 -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 Change employment rate population age 20-64, 2005-2015 Source: Eurostat: EU-LFS (lfsi_emp) and EU-SILC database (ilc_li) Note: ‘2005-2015’: CH: 2010-2014, BG:2006-2015, HR: 2010-2014, RO: 2007-2015, IE: 2005-2014, and for ‘2010-2015’: CH: 2010-2014, HR: 2010-2014, IE: 2010-2014 5

Employment and poverty: a macro perspective (3) Figure 3 Evolution employment rate and AROP rate, Europe, 2005-2015 20 18 16 14 12 10 8 6 4 2 0 EU-28 EU-15 FI CZ BE DK MT IE NL HR NO SK CH SL IS SE FR BG AT UK CY HU LV DE LT EE PT PL IT LU ES EL RO Source: Eurostat EU-SILC database (ilc_iw) Note: 2014 for EU-15, IE, HR, and CH 6

Employment and poverty: a macro perspective (4) Figure 4 In-work poverty employed persons aged 18-64, 2004-2015 11 10 9 8 7 6 5 4 3 2 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 BE NL DE EU-15 Source: Eurostat EU-SILC database (ilc_iw) 7

In-work poverty in Belgium the past decade A story of a steady river and shifting undercurrents 8

2005 2014 Share Share Poverty among Poverty among workers workers Total 4.3 5.0 INDIVIDUAL LEVEL CHARACTERISTICS Sex men 4.6 56.0 4.7 53.3 3.2 women 44.0 5.3 46.7 Education low 7.2 15.9 9.3 13.7 3.8 middle 35.8 6.2 34.1 3.7 high 48.4 3.1 52.2 Age 18_29 4.9 20.0 5.5 17.1 4.4 30_49 59.9 5.5 54.4 3.4 50_64 20.1 3.6 28.5 Born in Belgium 3.0 89.3 3.3 86.1 EU 4.8 5.8 8.9 6.8 Not EU 20.5 4.9 18.2 7.1 Region Flanders 3.5 61.5 3.7 61.7 Brussels 10.2 8.3 11.4 9.4 Wallonia 4.2 30.2 5.5 28.9 9

2005 2014 Share Share Poverty among Poverty among workers workers HOUSEHOLD LEVEL CHARACTERISTICS Children 0 2.6 46.0 3.3 46.7 1 4.6 22.3 4.6 21.2 2 5.2 20.0 6.1 22.3 >2 8.9 11.7 11.0 9.9 Family type Single adult 7.2 19.3 9.4 18.3 Couple 3.4 61.0 3.7 60.7 Other 4.1 19.8 4.8 21.0 Household ]0;0,5[ 14.9 16.4 21.3 7.2 Work intensity [0,5;0,8[ 3.3 19.2 9.4 20.3 [0,8;1[ 1.6 18.0 2.4 23.4 1 2.0 46.4 2.0 49.1 The basic story… For some groups the poverty risk increased, but their share decreased 10

2005 2014 Share Share Poverty among Poverty among workers workers JOB CHARACTERISTICS Full year No 10.7 3.8 13.5 6.3 Yes 3.7 96.3 4.2 93.7 Low market income No 1.5 82.5 1.5 82.2 Yes 13.4 17.5 15.1 17.8 Temporary No 2.4 91.2 2.5 91.5 Yes 5.9 8.8 14.9 8.5 Part-time No 3.3 79.9 3.9 75.2 Yes 4.8 20.1 6.1 24.8 Self-employed No 2.7 88.1 3.7 89.4 Yes 12.8 11.9 14.5 8.5 11

Non-standard workers Can the specific profile of non-standard workers explain their increased poverty risk? 12

Non-standard workers Difference in poverty rate 0.140 0.120 0.100 0.080 0.060 0.040 0.020 0.000 Part-time temporary self-employed Difference in poverty rate 13

Non-standard workers 0.140 0.120 0.100 0.080 0.060 0.040 0.020 0.000 Part-time temporary self-employed wage Difference in poverty rate 14

Non-standard workers 0.140 0.120 0.100 0.080 0.060 0.040 0.020 0.000 -0.020 -0.040 Part-time temporary self-employed individual controls famtype (ref.: single) wihhO child_D (ref.: no) wage occup (ref.: ISCO 1 + 2) benefitself (ref.: no) Difference in poverty rate 15

Non-standard workers 0.140 0.120 0.100 0.080 0.060 0.040 0.020 0.000 -0.020 -0.040 Part-time temporary self-employed individual controls famtype (ref.: single) wihhO child_D (ref.: no) wage occup (ref.: ISCO 1 + 2) benefitself (ref.: no) Total explained Difference in poverty rate 16

Non-standard workers Earnings differences explain a substantial share of the difference in the AROP rate between standard and non- standard workers. However ... Low earnings are not the key explenation for in-work poverty in general ! 17

Non-standard workers

Belgium in comparison to the “Dutch miracle” 19

Belgium compared to the Netherlands NL: higer employment rate, also for the low skilled • NL: more non-standard and low paid jobs • NL: less poverty in general • NL: In-work poverty slightly higher • NL: lower relative poverty risk for non-standard and low • paid workers

Temporary workers 14 eq_disp HH income active age (18-64). relative to poverty line 12 10 8 6 4 2 0 0 1 2 3 4 5 6 7 8 9 10 NL total workers BE total workers NL temporary workers BE temporary workers Source: EU-SILC 2014. own calculations

Part-time workers 16 eq_disp HH income active age (18-64). relative to poverty line 14 12 10 8 6 4 2 0 0 1 2 3 4 5 6 7 8 9 10 NL total workers BE total workers NL strictly PT employee BE strictly PT employee Source: EU-SILC 2014. own calculations

Low paid (part-time and full-time) workers 14 eq_disp HH income active age (18-64). relative to poverty line 12 10 8 6 4 2 0 0 1 2 3 4 5 6 7 8 9 10 BE total workers BE FYPT low paid BE FYFT low paid BE all FY workers NL total workers NL FYPT low paid NL FYFT low paid NL all FY workers Source: EU-SILC 2014. own calculations

Composition active age population (18-64). by household work-intensity 100% 90% 80% 70% HH_WI = 1 60% HH_WI = ]0.8, 1[ 50% HH_WI = ]0.5, 0.8] 40% HH_WI = ]0,0.5] HH_WI = 0 30% 20% 10% 0% BE NL Source: EU-SILC 2014. own calculations

Composition active age population (18-64). by personal income source(s) 100% 90% 80% 70% 60% only earnings both benefits and earnings 50% only benefit income 40% no income 30% 20% 10% 0% BE NL Source: EU-SILC 2014. own calculations; Note: earnings = income as an employee or income from self-employment

Mapping Living Standards and Poverty among the Self-employed An Exploration of a Rough and Isolated Landscape 26

Self-employment and poverty At-risk of poverty rate ‘self-employed’ and the difference with the poverty risk of employees, 2015 80 60 40 20 0 -20 -40 -60 EU-28 CZ HU CY MT AT FI HR BG BE NL SE UK IS NO FR DK IT LT DE LU SK LV SL EL ES PL PT EE RO difference employees and self-employed self-employed Source: Eurostat: EU-SILC_[ilc_li04] Note : self-employed include self-employed with or without employees and family workers. 27

Self-employment and poverty 2 issues 1) Different results when looking at AROP (income poverty) and MD (material deprivation) 2) Limited overlap between AROP (income poverty) and MD (material deprivation) among self-employed in particular 28

Self-employment and poverty The story … - Self-employed: increased income poverty risk, but not lower living standard - The situation is most problematic for self-employed without employees ~ Australia (Bradbury, 1997), the UK (Hick, 2015), and Sweden (Sevä & Larsson, 2015). 29

Self-employment and poverty Two individuals with the same income can have very • different living standards if their income does not measure adequately all the resources available to them (Fusco et al., 2011: 139). Unobserved (and unobservable) for self-employed: • tax-benefit regulations allowing wealth accumulation through their • businesses Life-time wealth accumulation • income volatility, and/or other problems with income data from • self-employment 30

Self-employment and poverty Figure xx Correlation at-risk of poverty rate and material deprivation among employees (only income as employee), individuals aged 18-64, 2014 (r=0,367) 40 MD rate employees 35 HU BG RO CY 30 EL HR LV 25 PT 20 PL IT SK LT 15 MT IE SI ES CZ EE UK 10 FR BE DE NL AT 5 DK LU FI IS NO SE 0 0 2 4 6 8 10 12 at-risk of poverty rate employees Source: EU-SILC 2014, own calculations