In this study, we measure the area-specific poverty in the European Union (EU). To this end, we measure poverty at the sub-national level in two ways: (i) using the EU nomenclature of territorial units (NUTS 1 mostly); (ii) using different with respect to the degree of urbanisation areas within countries. The measurement of poverty is based on the Multidimensional Poverty Index (UN MPI) by Alkire and Santos (2010, 2013). With the data from the European Union Survey on Income and Living Conditions (EU SILC), we formulate the Index of Multidimensional Poverty at the regional level, namely the Multidimensional Poverty Index (MPI-reg). The MPI-reg framework comprises three dimensions — health, education, and standard of living — quantified by three sub-indexes: Multidimensional Poverty in Health Index (MPI–H), Poverty in Education Index (MPI–E) and Multidimensional Poverty in Living Standards Index (MPI–L), respectively.
The MPI-reg was computed for 23 EU countries in 2010, 24 EU countries in 2007 and 2011, and 25 countries in 2008 and 2009. Our results show that the level of poverty in the EU ranges from 2–3 % to 15–25 %, with Denmark and Sweden being unequivocally the least poor countries and Latvia, Bulgaria and Romania, the poorest countries. We also indicate that there is a positive relationship between the stratification level and all adjusted headcount ratios, headcount ratios and intensity of poverty scores. This positive relationship implies that there are countries where there is no stratification with respect to poverty (e.g. Sweden, Denmark, the Czech Republic, and Finland) and countries, usually poor ones, such as Romania, Bulgaria and Lithuania, but also Belgium and Italy, where considerable stratification with respect to poverty occurs. In general, in poor and moderately poor countries, the worst situation with respect to poverty is observed in sparsely populated areas, and the best situation occurs in densely populated areas. On the other hand, in the best scoring countries, poverty is relatively higher in the densely populated areas compared to the less well-populated areas. Additionally, our analysis showed that between 2005–07 and 2009–11, changes in inequality with respect to poverty occurred. We demonstrated that a decrease in inequality most often occurred in Poland and Spain, whereas Belgium and Italy we most often spotted as countries with growing regional differences.
The results indicated that the European Union regions are strongly diversified with respect to poverty. This implies that regardless of the spatial location of the region and the definition of the region, considerable within-country differences are indicated if only sub-national levels are available. Therefore, relying only on countrywide estimates may be misleading when properly assessing the relative standing of a region with respect to poverty.JRC.DDG.01-Econometrics and applied statistic
