The Working Poor Facing the Great Recession in Southern Europe

• Main Author: Estelle Sommeiller
• Format: Article
• Language: English
• Published: Athens Institute for Education and Research 2020-10-01
• Series: Athens Journal of Business & Economics
• Subjects: measurement; poverty in earned income; standard employment; solo self-employment; part-time work; family net; labour-markets reforms
• Online Access: https://www.athensjournals.gr/business/2020-6-4-2-Sommeiller.pdf

The standard measure of poverty at work in Europe is the in-work at-risk-of poverty rate published by Eurostat. According to this indicator, the working poor in Southern Europe have somehow been affected by the financial crisis of 2008 and the Eurozone debt crisis that followed in 2010. Spain, Italy and Portugal display rates ranging between 9% and 10% in 2007 compared to 11% - 13% in 2017. In Greece, in-work poverty declined from 14% in 2007 to 11% ten years later. Such a result may be surprising in the context of the austerity policy measures that marked the decade in this area of Europe. Using EU-SILC 2005-2018 microdata, this article aims to extend Eurostat's rates of in-work at-risk-of poverty in several ways. First, poverty lines are computed so as to be anchored in time: each of the four national poverty thresholds is set at 2008. Second, the statistical population of workers is expanded to include the people displaying weak ties to the labour market but still in the exercise of remunerated activities at some point of the year. Third, the black box of the household approach is opened thanks to Ponthieux's concept of poverty in earned income. Fourth, the poverty headcount ratios are supplemented by the two other measures that Sen suggested to adopt on a regular basis: the poverty gap (the economic distance separating the income of the poor from the poverty line) and the Gini index measuring how unequal the income distribution of the poor may be. Once those technical details are fixed, the question of working poverty is addressed over time (before and after the Great Recession) under its three fundamental dimensions: the labour-market, the family net, and the state institutions