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The proportion of people at risk of poverty on an EU-wide measure
Interpretation of an EU-wide measure of the risk of poverty
The risk of poverty can also be calculated on an EU-wide basis in relation to median income at the aggregate level. The poverty threshold can be defined as 60% of EU median income (EUR 8,624 in 2008), 50% (EUR 7,187) and 40% (EUR 5,750).
It is important to be clear about the meaning and implications of such an EU-wide measure. The risk of poverty is still being defined in relative rather than absolute terms, but calculating the income of each household in the EU relative to the EU median level of income means that, in countries with the lowest income levels, the majority of the population may have an income below an EU poverty threshold, but most of those people are clearly not socially excluded in national terms. Nevertheless, in EU terms they might well be, and from a policy perspective, reducing the proportion of the EU’s population with income below the threshold (at whatever level it is set) might be just as important for social cohesion across the Union as reducing the proportion falling below the national thresholds.
If the threshold is set at 60% of EU median income, some 23% of people in the EU fall below this level. If set at 40%, 12% fall below (Figure 4). Regardless of which threshold is chosen, the proportion falling below it is largest in Romania and Bulgaria – in the former, 80% of the population (Table 1)
Figure 4: Proportion of people at risk of poverty defined relative to EU median income, 2008 income year
At an EU-wide risk-of-poverty threshold of 60% of median income, around 20% of the people with income below this level live in Poland and around 17% in Romania (Figure 5). More surprisingly, perhaps, the three countries with the next largest proportions are all EU15 countries: Italy, Spain and the UK. Setting the threshold at 40% of EU median income, however, changes the picture markedly. Poland still accounts for around 20% of the total with income below this level, but Romania accounts for 30% and Bulgaria, which makes up well below 2% of total population in the EU, accounts for 7% of those with income this low.
Figure 5: Countries’ share of total EU population with income below 40%, 50% and 60% of the EU median, 2008 income year
