Material deprivation and household income levels within countries

Just as the rate of material deprivation tends to vary across countries in line with household income levels, so too does it vary between households with different income levels within a country. In all Member States, therefore, the proportion of people who are materially deprived declines as household income rises, albeit at varying rates - markedly in Cyprus and Portugal, less so in Spain and the Netherlands (Table 1).

Whereas in most countries, the proportion of people who are materially deprived declines to well below 10% in the fourth income quintile, in Hungary it is around 30% and in Latvia it is 25%. In Bulgaria and Romania, more than a third of the population in the fourth income quintile are materially deprived (35% and 39%, respectively). Moreover, in Latvia, Hungary and Romania, even among the top 20% of income earners, some 12-15% are materially deprived.

Nevertheless, the tendency for material deprivation to vary with income is less apparent at the bottom end of the income scale. Indeed, in many countries, as the income of households declines, so the rate of deprivation also tends to decline. In several countries, therefore, the proportion of people who are measured as being materially deprived is smaller among those with income below 40% of the median than it is among those with income below 50% (Table 2).

In the EU as a whole, therefore, the rate of material deprivation is only marginally higher among those with income below 40% of the median than it is among those with income below 50%. In 11 of the 27 countries, the rate is lower - much lower in Ireland and the Netherlands (where the rate among those with income below 50% of the median is, in turn, less than among those with income below 60%). In many of the other countries, moreover, the increase is relatively small.

This reflects the failure of income, as defined in EU-SILC, to measure purchasing power in many cases, as indicated above. Those living in households with the lowest levels of annual disposable income, therefore, are not necessarily the people who are least well-off in the country in question. Accordingly, the indicator of material deprivation once again highlights its value as a complement to the income measure of relative poverty, compensating for deficiencies in the latter. It indicates, for example, that in three countries - Denmark, the Netherlands and Sweden - only around 20% or less of people with income below 40% of the median are materially deprived according to the indicator.

It also indicates, on the other hand, that the proportion of such people identified as being deprived in Bulgaria is 96%, is just below 80% in Romania and is around three-quarters in Latvia and Hungary. In these cases, in consequence, low income levels are associated in most cases with deprivation.

See Tables