The Case for an EU-wide Measure of Poverty

Abstract

Income poverty in the European Union (EU) is normally measured with reference to income thresholds defined at the level of each Member State, independently of any consideration of inequalities in income between Member States. This approach has come under strain as a consequence of the recent enlargement of the EU: income differences between Member States are now so wide that what is defined as the poverty threshold in the richer Member States would count as an above-average income in the poorer Member States. This article proposes that, in order to cope with empirical and policy issues arising in this new situation, measures of poverty based on EU-wide thresholds need to be utilized alongside existing measures. Indicators of objective living conditions and subjective feelings of deprivation are used to show that the very high poverty rates in poorer Member States that an EU-wide poverty measure would produce are empirically meaningful, in that they reflect the low living standards and a strong sense of deprivation experienced by large proportions of the population in those states. They are also relevant for policy, but in a context where EU anti-poverty policy is linked as much with the EU convergence project and the single EU labour market as of social policy in the usual sense.

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