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Subjective poverty and social capital: a comparison among European countries*

Giuseppina Guagnano§, Elisabetta Santarelli§


Extended abstract

Measuring poverty and understanding why it occurs represent, nowadays, a core task for both researchers and policy-makers in advancing towards the eradication of poverty.

An increasing interest has recently been shown in literature towards subjective poverty arguing that it depends on people’s perceptions and not exclusively on the income needed to satisfy household needs.

In particular, several empirical studies have shown how and to what extent in Europe self-perceived poverty is associated with household size and type, with available household resources (Van Praag and Van der Sar, 1988; Ravaillon and Lokshin, 2002; Castilla, 2010), with individual and household socioeconomic characteristics (i.e. gender, age, employment status, education, tenure status, the area of residence) (Ravaillon and Lokshin, 2002; Stanovnik and Verbic, 2004; Istat, 2008; Isae, 2009).

Limited attention has been, instead, devoted to the analysis of the relationships with household and community social capital endowment despite its growing importance as a major determinant of economic well-being at micro and macro level that has increased its implications in social policy as a tool to achieve better outcomes of traditional public policies for poverty reduction.

The EU-SILC survey and the Eurostat database offer a new opportunity for research in this field in a comparative perspective, because they provide comparable and high quality cross-sectional indicators for EU member and non-member countries.

In a previous multiple correspondence analysis conducted on the 2008 EU-SILC survey and Eurostat database (Guagnano, Santarelli, Santini, 2013), the authors found that a proxy of subjective poverty (“Ability to make ends meet”, which has the following response categories: with great difficulty; with difficulty; with some difficulty; fairly easily; easily; very easily) is associated with two sets of variables describing, respectively, the household socioeconomic characteristics (age, gender, marital status, education, employment status, work intensity status, branch of activity, at risk of poverty and social exclusion, general health, house/flat size, tenure status, dwelling type, household type, equivalised disposable income, poverty and deprivation indicator, financial burden of housing cost, debts, family/children social exclusion, housing, cash and alimonies received) and the household/community social capital endowment. As to this latter, the proxy variables selected are indicators of the level of: social behaviour (SB), population socioeconomic characteristics that facilitate/hinder the development of social and economic cooperative behaviour; social relationships (SR), measures of the potential and actual degree of social relationships; some specific territorial and environmental characteristics which are significant determinants of social capital formation. A complete list of all variables is provided in the Appendix (Table1A and 2A).

Moreover, the analysis highlights the existence of four groups of countries, partially overlapping the traditional welfare state classification (see Esping Andersen, 1990): Lithuania, Bulgaria, Romania, Estonia, Poland, Latvia, Hungary and Slovakia show low levels of economic well-being and high levels social capital endowment; countries such as Italy, Portugal, Greece, Cyprus, Slovenia and Czech Republic are characterized by poor household economic well-being but also by low social capital endowment; in Sweden, Finland, Denmark, Great Britain and Ireland there are high levels of both economic well-being and social capital endowment; finally, the remaining countries are characterized by high household economic well-being and low social capital endowment.

In the light of these results, the present work aims to highlight: a) to what extent perception of poverty in Europe is affected by the respondent/household socioeconomic characteristics and household/community social capital endowment; b) which of the social capital components have a higher impact on subjective poverty and can be regarded as primary risk factors in household poverty status; c) if and to what extent perception of poverty is affected by the typology of the country where families live.

In order to pursue this aim, we estimate a generalized ordered logit model (Williams, 2006), in which the dependent variable is “Ability to make ends meet”.

As to the predictors referring to household/community social capital endowment, we consider the following five social capital indicators (taking into account Table 2A):

i) two simple indicators of social behaviour;

ii) one composite index of social relationships (computed as the arithmetic mean of variables on possession of pc, number of hours of childcare, number of family workers in family business);

iii) two territorial context composite indicators: the first one at household level (it is the arithmetic mean of EU-SILC variables on overcrowding, housing and environmental conditions - leaking roof, darkness, noise, pollution) and the second one at community level (it is the arithmetic mean of Eurostat indices on housing deprivation rate, different aspects of environmental pollution, grime or other environmental problems).

A confirmation of the results obtained by multiple correspondence analysis would reinforces the idea that in many countries poverty reduction policies should enhance household economic well-being not only through traditional income support measures, but also facilitating the development of desirable forms of social capital which strengthen mutual trust and foster model behavior (i.e. reducing criminality and improving housing and environmental conditions).

Key words: subjective poverty, social capital, EU-SILC.

References

Castilla C. (2010). Subjective Poverty and Reference-Dependence: income over time, Aspirations and Reference Groups. Chronic Poverty Research Centre 2010 Conference ‘‘Ten Years of War Against Poverty what we have learned since 2000 and what should we do 2010- 2020?’’ Manchester, UK. September.


Esping-Andersen, G. (1990). The three polical economies of the welfare state. In G. Esping-Andersen (Ed.), The three worlds of welfare capitalism, Chapter 1, pp. 9–34. Princeton University Press.


Guagnano, G., Santarelli E., Santini, I. (2013). The determinants of subjective poverty in Europe: the role of household socioeconomic characteristics and social capital and the implications for public policies. Paper presented to the 4th annual IIPPE Conference, The Hague, July, 9-11.


Isae. (2009). La povertà soggettiva in Italia, Nota mensile, luglio, Roma.


Istat. (2008). Distribuzione del reddito e condizioni di vita in Italia – Anni 2006 e 2007, Statistiche in breve, Roma.


Ravaillon M., Lokshin M. (2002). Self-rated economic welfare in Russia. European Economic Review, 46: 1453-1473.


Stanovnik T., Verbic M. (2004). Perception of Income Satisfaction. An Analysis of Slovenian Households. EconPapers.


Van Praag B.M.S., Van der Sar N. (1988). Empirical Uses of Subjective Measures of Well-Being: Household Cost Functions and Equivalence Scales. The Journal of Human Resources, 23(2): 193-210.


 APPENDIX


Table 1A - Respondent and household socioeconomic characteristics (Source: EU-SILC 2008)


Label

Variable name

Categories

AGE

Age

< 24

25-29

30-34

35-39

40-44

45-49

50-54

55-59

60-64

65-79

80+


GEN

Gender

1 Male

2 Female


MST


Marital status

1 Never married

2 Married

3 Separated or divorced

4 Widowed


EDU


Educational qualification

1 Low

2 Medium

3 High


EMP


Employment status

1 Working

2 Unemployed

3 Retired

4 inactive


LWI

Low work intensity status

0 No LWI

1 LWI



HTH

General health

1 Very good

2 Good

3 Fair

4 Bad

5 Very bad


RISK

At risk of poverty or social exclusion

1 Not at risk

2 At risk of poverty

3 At risk of poverty , sev materially deprived , LWI


ROO



House/flat: number of rooms



1 1 room

2 2 rooms

3 3 rooms

4 4 rooms

5 5 rooms

6 6+ rooms


TST


Tenure status

1 Owner

2 Tenant or subtenant paying rent at prevailing / market rate

3 Accommodation is rented at a reduced rate  or provided free



1 Detached house


2 Semi-detached house

DTY

Dwelling type

3 Flat in building < 10 dwellings


4 Flat in building >= 10 dwellings



TYPE



Household type


1 One person household

2 2 adults both adults < 65 years

3 2 adults , at least one adult ≥65 years

4 Other without dependent children

5 Single parent and ≥ 1 dependent children

6 2 adults, one dependent child

7 2 adults, two dependent children

8 2 adults and ≥ 3 dependent children

9 Other households with dependent children

10 Other type


HDI


Equivalised disposable income


1 1st quintile

2 2nd quintile

3 3rd quintile

4 4th quintile

5 5th quintile


POI

Poverty indicator

0  Not at risk of poverty

1  At risk of poverty


SMD


Severely materially deprived household

0 Not severely deprived

1 Severely deprived

HCO

Financial burden of the total housing cost

1 A heavy burden

2 Somewhat a burden

3 Not burden at all


DEB


Debts for hire purchases or loans

0 Non Debts

1 Debts

WIS


Work intensity status


1 WI = 0

2 0 < WI< 0.5

3 0.5 ≤ WI < 1

4 WI = 1

FAL

Family/children related allowances


0 No

1 Yes

AAL


Social exclusion not elsewhere classified – Allowances


0 No

1 Yes

HAL


Housing allowances


0 No

1 Yes


ICT

Regular inter-household cash received

0 No

1 Yes

ALI

Alimonies received (compulsory, voluntary)


0 No

1 Yes

I16


Income received by people aged under 16



0 No

1 Yes


Table 2A – Social capital indicators


N°        Label

Variablename

Categories

Source

Social behaviour (SB)



1

CRH

In your local area are there any problems of crime, violence or vandalism?

0  No

1  Yes

EU-SILC




2

CRC

Crime recorded by the police: total crime [Number of crimes per 100 inhabitants]

1 Low

2 Medium

3 High

Eurostat




Social relationships (SR)



3

PHO

Do you have a phone? (including mobile)

0  No

1  Yes

EU-SILC




4

TVC

Do you have a colourtv?


0  No

1  Yes

EU-SILC




5

PC

Do you have a computer?

0  No

1  Yes

EU-SILC




6

CHI

Number of hours of child care by grandparents, others household members (outside parents), other relatives, friends or neighbors (free of charge) (per household member if less than 12 years old).


1 None

2 Low

3 Medium

4 High


EU-SILC

7

FAW

Are there “family workers” in your family business? (number)

None

1 FAW

2 FAW

3 FAW

4 + FAW

EU-SILC








Territorialcontext (TC)



10

OCH

Overcrowded household


0 No

1 Yes


EU-SILC

OCC

Overcrowding rate


1 Low

2 Medium

3 High


Eurostat

H1C

Housing deprivation rate: % of total population living in a dwelling with a leaking roof, damp walls, floors or foundation, or rot in window frames of floor.

1 Low

2 Medium

3 High

Eurostat




12

H2H

Is your dwelling too dark, meaning is there not enough day-light coming through the windows?

0 No

1 Yes


EU-SILC







13

H3H

Do you have too much noise in your dwelling from neighbors or from outside (traffic, business, factory)?

0  No

1  Yes


EU-SILC




H3C

Environment of the dwelling: % of total  population suffering noise from neighbors or from the street.


1Low

2Medium

3High

Eurostat

14

H4H

Pollution, grime or other environmental problems in the local area such as smoke, dust, unpleasant smells or polluted water

0 No

1 Yes


EU-SILC




H4C

Environment of the dwelling: % of total population suffering from pollution, grime or other environmental problems.


1Low

2Medium

3High

Eurostat

15

AP1

Greenhouse gas emission (in CO2 equivalent).


1Low

2Medium

3High

Eurostat




17

AP3

Urban population exposure to air pollution by particulate matter (micrograms per cubic meter).


1Low

2Medium

3High

Eurostat




*The present work has been developed within the research “Perception of poverty. Individual, household and social environmental determinants” led by Isabella Santini at SAPIENZA University of Rome, partially supported by 2010 Italian M.I.U.R. grants (prot.C26A10WW49).

  • § Department of Methods and Models for Economics, Territory and Finance, SAPIENZA University of Rome, Via del Castro Laurenziano, 9 00161 Rome, Italy ( e-mail: Questo indirizzo e-mail è protetto dallo spam bot. Abilita Javascript per vederlo. ).

Ultimo aggiornamento Sabato 24 Agosto 2013 15:02
 

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