Policy cycle in poverty

The experience of the UK’s Women’s Budget Group, is a paper that starts by defining what a gender budget is, outlines the imperatives to conduct a gender budget and then proceeds to detail how such a budget may be constructed. This methodology was applied to UK budgets, also covering policies tackling poverty and social exclusion.

At risk of poverty or social exclusion rate

• At risk of poverty or social exclusion rate: This indicator corresponds to the sum of persons who are at risk of poverty, or severely materially deprived, or living in households with very low work intensity as a share of the total population, expressed in numbers or shares of the population. Components:
• At risk of poverty rate: Share of persons aged 0+ with an equivalised disposable income below 60% of the national equivalised median income. Equivalised median income is defined as the household's total disposable income divided by its ‘equivalent size’, to take account of the size and composition of the household, and is attributed to each household member. Equivalization is made on the basis of the OECD modified scale.
• Population living in very low intensity (quasi-jobless) households: People aged 0 – 59, living in households, where working age adults (18 – 59) work less than 20% of their total work potential during the past year.
• Severe material deprivation rate: Share of population living in households lacking at least 4 out of the following 9 items: i) to pay rent or utility bills, ii) keep home adequately warm, iii) face unexpected expenses, iv) eat meat, fish or a protein equivalent every second day, v) a week holiday away from home, or could not afford (even if wanted to) vi) a car, vii) a washing machine, viii) a colour TV, or ix) a telephone.

The indicator is one of the most relevant indicators at the EU-28 level for measuring the at-risk-of-poverty situation, although not disaggregated by sex. Nevertheless, disaggregation by sex and age is available.

Currently 16.6% of the EU-28 citizens are at risk of poverty and all over Europe women are at higher risk of falling into poverty than men (17.2% and 16.1% respectively in 2013). The indicator is included in the set of indictors for monitoring Area A – women and poverty, in the BPfA. The indicator is available from the European Union Living Conditions Survey (EU-SILC), included in the Eurostat income and living conditions data (online data code: ilc_li02).

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A3a. Inactivity by age and sex; share of women and men who are inactive by age

A3b. Inactivity by age and sex; share of inactive women and men who are not looking for a job for family care reasons.

This second indicator is a factor (i.e. causal) indicator of poverty. Employment is perceived by many Member States as a key factor of social inclusion and offers the most important means of escaping the poverty cycle. Being employed and earning wages is crucial for the economic independence of women and men; therefore, those events that may lead women and men of working age to interrupt their working lives or not to participate in the labour market can generate a potential risk of poverty. The responsibility for family care still falls mainly on women, in part due to social stereotypes regarding women’s and men’s roles in the family and society. Due to gender imbalances, the interruption of working life or inactivity for family care reasons can act as women-specific factors that may generate a loss of economic independence and, later in the life cycle, a lower level of social protection (lower pensions).

Inactivity has been defined as the percentage of persons, who are classified neither as employed nor as unemployed in the labour market. Employed persons are all persons who worked at least one hour for pay or profit during the reference week or were temporarily absent from such work. Unemployed persons are all persons who were not employed during the reference week and had actively sought work during the past 4 weeks and were ready to begin working immediately within 2 weeks. Inactivity does not, however, mean that persons who are in this category are inactive in general. They can, for example, be taking care of children or incapacitated adults, doing domestic work or studying.

Not looking for a job for family care or personal reasons is the share of persons who are outside the labour market and not looking for work due to family or personal reasons and caring for children or incapacitated adults.

The reason for inactivity captured by this variable deals with the main reason why somebody is not seeking employment. It has to be noted that in some cases, the main reason may not be the only reason for not looking for a job. In addition, the reasons for not looking for a job for family care and personal reasons are presented separately.

The indicator is included in the set of indicators for monitoring area A – women and poverty in the BPfA, as employment is considered a key factor of social inclusion and offers the most important means of escaping the poverty cycle. Being employed and earning wages is crucial for the economic independence of women and men. Therefore certain events that may lead women and men of working age to interrupt their working lives or not to participate in the labour market can generate a potential risk of poverty. In 2014, the inactivity rate in the EU-28 was 27.7%. Women are however, particularly affected, with an inactivity rate of 33.5% compared to 21.9% for men.

The indicator is available from Eurostat EU-LFS Survey, included in the Eurostat Labour Market database (online data code: lfsa_ipga).

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This indicator is a ‘classical’ poverty measure defined as the percentage of people living below the monetary poverty line but it emphasises household attributes that have a particular impact on poverty among women, such as lone parenthood and household size. The number of lone parents has been increasing across the EU and the data shows they face a particular risk of poverty. Many lone parents are the sole carers of their children and are restricted to jobs with hours that enable them to spend as much time with their children as possible. The gap between the income of lone-parent families headed by women (25.1%) and men (24.6%) is low but can highlight the vulnerability to poverty of lone parents, on the one hand, and of women on the other.

The indicator is included in the set of indictors for monitoring the area A – women and poverty by the BpfA ([9]). The indicator is available from the European Union living conditions survey (EU-SILC), included in the Eurostat income and living conditions data (online data code: ilc_li03).

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The indicators are calculated as the share of people aged 18 or over with an equalised disposable income below the risk of poverty threshold, which is set at 60% of the national median equalised disposable income (after social transfers) over the total population. The indicator is strictly related to in-work poverty and is sensitive to the interconnection between low pay and low work intensity at the household level. The indicator is a relevant indicator for monitoring the risk of poverty of people and families with low work intensity, and it is already included among the social inclusion and social policy indicators used at the EU-28 level.

Disaggregation by sex and age is available. The in-work-at-risk-of-poverty rate indicates to what extent employment helps people to overcome the risk of poverty. In general, men were more affected by in-work poverty than women (9.3% compared with 8.4% in 2013). The situation is the opposite for young workers aged 18 to 24 years. In this case, women were more affected (12.5% compared with 10.7%).

The indicator is available from the European Union living conditions survey (EU-SILC), included in the Eurostat income and living conditions data (online data code: ilc_iw01).

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Mean monthly earnings represent the earnings of an employed person, before any tax deductions and social security contributions, payable by wage earners and retained by the employer. These are restricted to gross earnings which are paid in each pay period during the reference month. It is also considered in the calculation of the EIGE gender equality index under the money domain. With a gender gap in earnings of 510 pp, gender differ­ences in mean monthly earnings on average were small for the EU-27 in 2012.

It is a calculation based on the structure of earnings survey (SES) (online data code: earn_ses10_20). Access the data here.

This is the ratio of total income received by 20% of the population with the highest income (top quintile) to that received by 20% of the population with the lowest income (lowest quintile). Income is defined as equalised disposable income. The income quintile share ratio (also called the S80/S20 ratio) is a measure of the inequality of income distribution. It is disaggregated by women and men and is also considered in the calculation of the EIGE gender equality index under the money domain. In 2012, gender differences in income distribution were small, reflected in a gender gap of 0.8 pp.

The indicator is available from the European Union living conditions survey (EU-SILC), included in the Eurostat income and living conditions data (online data code: ilc_di11).

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The unadjusted gender pay gap (GPG) represents the difference between average gross hourly earnings of male paid employees and female paid employees as a percentage of average gross hourly earnings of male paid employees. The population consists of all paid employees in enterprises with 10 employees or more in NACE Rev. 2 aggregate B to S (excluding O). The GPG is an important indicator used within the European employment strategy (EES) to monitor imbalances in wages between women and men. It gives an overall picture of gender inequalities in terms of pay and measures a concept that is broader than the concept underlying the principle of equal pay for equal work. Unequal pay persists as a major problem: women earned 16.4% less on average for equal work than men in the EU-28 in 2013. Eurostat collects the structural indicator gender pay gap (GPG) in unadjusted form on an annual basis. From reference year 2006 onwards, the new GPG data is based on the methodology of the structure of earnings survey (SES) carried out with a four-yearly periodicity. It is included in the Eurostat earnings data (online data code: earn_gr_gpgr2).

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The gender gap in pensions can be identified as the sum of gender inequalities over a lifetime, including differences in the life course (motherhood penalty ([12])), segregated labour market and gendered social norms and stereotypes. The gender gap in pensions is defined as a percentage by which women’s average pension is lower than men’s. It is computed in the following way: one minus women’s average income divided by men’s average income and multiplied by 100 to express the ratio as a percentage. The methodology for calculating the gender gap in pensions is based on the methodology used and described in the report ‘The gender gap in pensions in the EU’ ([13]). The gender gap in pensions throughout the European Union (EU) is considerable. In 2012, the gender gap in pensions amounted to 38% in the EU on average ([14]). The major source of statistics on income that can be used to calculate gender gap in pensions is the European Union living conditions survey (EU-SILC).