At Risk of Poverty or Social Exclusion (AROPE)

AROPE refers to the situation of being either in an AROP or SMD or LWI household. It brings together three dimensions of poverty: mone-tary poverty measured by relative national thresholds, material deprivation measured as the lack of certain resources in the household and exclusion from the labour market.

As mentioned before one of the key objectives of the Europe 2020 Strategy is to lift at least 20 million people out of poverty and social ex-clusion by 2020. National targets were set for each country considering the high heterogeneity across Europe. We can see in Table 3.2 that while Nordic countries have relatively lower percentages of their populations in AROPE households, some Eastern European countries have very high

centages. Iceland and Norway are the two countries with the lowest per-centages of their populations in AROPE households (14 and 15 per cent respectively). Czech Republic with only around 16 per cent of its popu-lation in AROPE households is the only Eastern European country doing almost as good as the Scandinavian countries, owing mostly to its very low income poverty rates. Netherlands, Finland, Sweden and Switzerland also have relatively low percentages in AROPE households. On the other hand, Bulgaria, Serbia and Romania are the worst performers with over 40 per cent of their populations in AROPE households, followed by Greece, Latvia and Hungary with over 35 per cent.

While some of these individuals in AROPE households are suffering only from one dimension of poverty, some are suffering from two dimen-sions and some from all three dimendimen-sions at the same time. Therefore, a high AROPE rate can be due to high AROP, high SMD, high LWI or various combinations of these three components.

Specifically, person in AROPE can be in one of the following 7 possible scenarios:

(1) only in AROP (neither in SMD nor LWI) households (2) only in SMD (neither in AROP nor LWI) households (3) only in LWI (neither in AROP nor SMD) households (4) in AROP and SMD at the same time (but not in LWI) (5) in AROP and LWI at the same time (but not in SMD) (6) in SMD and LWI at the same time (but not in AROP) (7) in AROP, SMD and LWI all at the same time

We present our results in four country groups: North-Western, South-ern, Nordic and Eastern European. The North-Western group is comprised of Austria, Belgium, Germany, Switzerland, France, Ireland, Luxembourg, Netherlands and United Kingdom; The Southern Group is made up of

Greece, Spain, Portugal, Italy, Malta and Cyprus; The Nordic Group includes Norway, Sweden, Denmark, Finland and Iceland; while The Eastern Group contains Bulgaria, Czech Republic, Hungary, Lithuania, Latvia, Poland, Romania, Serbia, Slovenia, Slovakia, Croatia and Estonia.

Throughout the chapter, we follow this country grouping borrowing from Iacovou and Skew (2010) whose starting point is the typological grouping proposed by Esping-Andersen (1990) which was later extended by Ferrera (1996) to include the Southern European countries and which groups together the Eastern European countries that joined the EU after 2005. In this paper, we chose to group all new member states of the EU as Eastern Europe as well³¹.

Figure 3.5 demonstrates the percentages of the AROPE populations in each 7 possible decompositions of AROPE. It shows what percentage of the populations in AROPE households are considered to be in AROPE due to suffering from only one, two or all three forms of poverty. To put more emphasis on these three dimensions of poverty, we grouped these 7 decompositions of AROPE into 3 categories. The first category is com-posed of those individuals who suffer only from one form of poverty: who are either only in AROP (1), only in SMD (2) and only in LWI (3) house-holds, the second category are those individuals who suffer from two forms of poverty at the same time: in AROP and SMD at the same time (4), in AROP and LWI at the same time (5) and in SMD and LWI at the same time (6) and the third category is composed of individuals who are in households

31Iacovou and Skew (2010) present a very detailed analysis of the prevailing household structures in the old and new member states of the EU. They present the big heterogene-ity among the new EU member countries: while Bulgaria, Romania, Slovakia, Slovenia and Poland having the largest household sizes and high prevalence of extended families with rare occurrence of lone parent families, stand closer to the Southern Europe; Czech Republic and Hungary with smaller household sizes and less common extended fami-lies are considered to be closer to the North-Western cluster and the Baltic countries lie somewhere in between, combining characteristics of the two clusters.

which are AROP, SMD and LWI all at the same time (7).

Nevertheless, we are aware of the fact that it is difficult to draw con-clusions regarding the severity of poverty depending only on the number of dimensions affecting the household. It is not easy to compare an indi-vidual who is just below the poverty threshold of its country and therefore categorized as income poor and also considered as in SMD for lacking 4 out of 9 SMD items with another individual who is just above the poverty threshold of the same country, therefore categorized as not income poor but lacking 7 out of 9 SMD items and therefore considered as SMD. It is not possible to conclude that the second individual who is not in income poverty but in SMD is doing better that the first individual who is both in income poverty and SMD. However, it would still be safe to say that those individuals who are in AROP, SMD and LWI households all at the same time (7) are the ones who are worse off in the sense that they are affected by all dimensions of poverty at the same time.

In all country groups, but Eastern Europe, income poverty is the most common form of poverty. Indeed, more than 50 per cent of the Nordic pop-ulations are categorized to be in AROPE households because they are only suffering from income poverty. Percentage suffering from only income poverty is also high in North-Western Europe, around 45 per cent. Per-centages of AROPE populations suffering from a form of income poverty is around 75 per cent in Nordic Europe and 70 per cent in North-Western Europe. Percentages of AROPE populations suffering only from income poverty are relatively lower in Southern Europe (33 per cent) and the low-est in Eastern Europe (24 per cent).

As discussed in the previous sections, in Eastern Europe SMD is the most common form of poverty. Around 30 per cent of the Eastern Euro-pean populations in AROPE households are suffering only from SMD. On

the other hand, SMD is as low as 4 per cent in Nordic Europe, 10 per cent in North-Western Europe and 14 per cent in Southern Europe. In Eastern Europe, around 60 per cent of the populations in AROPE households are suffering from a form of SMD. On the other extreme, in Nordic Europe only 13 per cent of the populations in AROPE are suffering from a form of SMD.

LWI seems to be a significant form of poverty in Nordic, North-Western and Southern Europe. More than 15 per cent of the populations in AROPE households in these countries are considered to be in AROPE households only due to LWI, while it is the lowest in Eastern Europe, with around 10 per cent.

In Eastern Europe, 9 per cent of the populations in AROPE households are suffering from all three types poverty at the same time. Eastern Europe is followed by Southern Europe (8 per cent), North-Western Europe (6 per cent) and Nordic Europe (4 per cent).

Figure 3.5: Decomposition of North-Western, Southern, Nordic and East-ern European Populations in AROPE Households, EU-SILC, 2013

Only 1 2 Together Altogether

AROP SMD LWI AROPSMD AROPLWI SMDLWI AROPSMDLWI 0

Only 1 2 Together Altogether

AROP SMD LWI AROPSMD AROPLWI SMDLWI AROPSMDLWI 0

Only 1 2 Together Altogether

AROP SMD LWI AROPSMD AROPLWI SMDLWI AROPSMDLWI 0

Only 1 2 Together Altogether

AROP SMD LWI AROPSMD AROPLWI SMDLWI AROPSMDLWI 0