Absolute versus Relative Deprivation: An Analysis of Poverty among Older Europeans

• In Event: 127 - Section on Inequality, Poverty and Mobility Roundtable Session (one-hour).
  In Paper Session: Table 16. Poverty I

Abstract

Even in the richest countries in the world, poverty is still a relatively common situation, especially among certain subgroups of the population, like the children, young adults, and the elderly. In Europe the latter already represents a considerable part of the population, which is destined to increase even further during the next decades. This increase in longevity means more years of retirement and health care – a concrete challenge for the National welfare systems. For policy makers to have a clear understanding of the socio-economic well-being of the elderly population, research on individual households as well as aggregate statistics is necessary. Our project analyzes the economic well-being of Europeans aged 50 and older from eleven EU countries, using both absolute and relative definitions of poverty. Although related, these two measures captures different dimensions of deprivation. In fact, while the relative poverty rate is an indicator of within country income inequality, the absolute poverty rate is a measure that indicates how many people have a level of income below what it is considered to be the minimum acceptable standard of living, irrespective of the within country income distribution. Our analysis shows that the poverty rate of the Western European countries varies considerably if we tackle this issue with a relative rather than an absolute approach, and that these two measures might be considered complementary rather than alternative.

Authors

• Francesco Acciai, Pennsylvania State University

• Melissa Hardy, Pennsylvania State University