Europe’s social polarisation and the generational struggle

This post, written by Bruegel's Olga Tschekassin, discusses the latest results on Europe's poverty rates, unemployment rates and income inequalities. The post is a part of the Wikiprogress Series on Jobs and Earnings.

According to the latest Eurobarometer survey on the social impact of the crisis, 80% of respondents believe that poverty has increased in their country over the past 12 months. Over 30% of respondents in Greece, Latvia, Lithuania, Bulgaria, Romania and Hungary reported that their household ran out of money to pay for ordinary bills, food and other daily consumer items at some point during the previous 12 months. These alarming numbers are reflecting the perception of European citizens. But what do indicators measuring different dimensions of poverty and inequality actually show?

The best publically available indicator to assess poverty is the ”Severe Material Deprivation Rate” (SMDR). It is an absolute measure of poverty and represents the proportion of people who cannot afford at least four out of nine basic needs, like utilities, regular hot meals or heating to keep the home adequately warm. As you can see in the interactive map below, there is a strong dispersion across Europe. While Bulgaria has the highest rate (44.1%), in Luxembourg only 1.3% of people are severely affected by a lack of resources. The average rate in EU27 countries increased from 9% percent in 2007 to 9.9% in 2012. Even though this increase does not seem to be as dramatic as the survey implies, it is worth highlighting that a share of almost 10% is unacceptable and against the objective of promoting the well-being of EU citizens.

(To view an interactive version of this map, see the original post here.)
 

There were opposite developments for young and old people in the EU: the SMDR stood at 11.7% for those under 18 at the end of 2012, while the rate for the elderly (over 65) reached 7.5%. The evolution of these rates since 2007 is divergent: Between 2007 and 2012, in 20 out of 28 EU countries the elderly SMDR declined on average by 4.5 percentage points (pp). At the same time, however, in 16 out of 28 countries the children SMDR has increased on average by 4.4 pp. Therefore, a generational divide is emerging: while the fall in severely materially deprived elderly people is a welcomed development, the adverse development for children is worrying.

Looking at the unemployment rate, we observe an increase in all EU countries in the period 2007–2012 with the exception of Germany, while the rate remained practically unchanged in Austria, Malta, Finland and Poland. The EU28 average unemployment rate stood at 7.2 % of active population in 2007. By the third quarter of 2013, this rate had increased to 10.9%. The countries with the lowest unemployment rates are Austria, Germany and Luxembourg, as opposed to Greece, Spain, Croatia, Cyprus and Portugal, where the rate is very high. Overall we note that there was an increase in the South-North divide in terms of unemployment, which has reached unacceptably high levels in several south European countries and leads to more polarisation across Europe.

Directly related to this indicator is the share of people living in jobless households, which has increased significantly throughout the crisis. The situation is especially alarming in Ireland, where every fifth child lived in 2012 in a household where no one worked. The share of such children was also higher than 15 % in Bulgaria, the UK and Hungary. Besides, the share of young people not in employment and not in any education and training (NEET) more than doubled in seven countries. The reality for young people aged between 15 and 24 years is worst in Greece, Spain and Croatia.

Using the Gini coefficient as an indicator for inequality, we observe the highest levels of inequality in 2012 in Latvia, Spain, Greece and Portugal, while the lowest rates are reported in Slovenia, Czech Republic and Sweden. As Zsolt Darvas and Guntram Wolff outline in their Policy Brief published on the 1st of April 2014, inequality in most advanced economies has been rising since about 1980 and could have been a reason for the pre-crisis increase in household debt and the consequent consumption squeeze during the crisis.

Therefore, developments of various social indicators show a gloomy picture. Social pain has already undermined the citizens’ trust in the EU and their own governments. This could devitalize the acceptability of painful structural reforms and fiscal consolidation measures and, in turn, diminish the reform momentum or even lead to political instability.

- Olga Tschekassin

This blog first appeared here at Bruegel.org on 1 April, 2014.
 

See Also:

European Network on Measuring Progress

Quality of life in Europe: Subjective well-being

Progress Initiatives in Europe

The European Centre for Social Welfare Policy and Research

 

What are the barriers for using Beyond-GDP indicators?

This blog, written by Dora Almassy, is about the current BRAINPOol project and the barriers the project has found in trying to establish alternative indicators beyond GDP. The post is a part of the Wikiprogress series on Data and Statistics.

The final conference of the BRAINPOol (Bringing Alternative Indicators into Policy) project takes place today, on 24th March 2014, in the premises of Organisation for Economic Co-operation and Development (OECD) Conference Centre in Paris. (Click here for the event programme.) Given the increasingly important role of Beyond GDP indicators in the economic policy debate, the event aimed to catalyse the adoption of new measures of progress, bringing together representatives from the spheres of politics, academics and civil society. During the conference, the project’s key findings and recommendations were also presented. 

The BRAINPOol project, funded by the European Commission’s 7th Framework Programme, aims to summarise existing knowledge of alternative indicators and to promote their use in policy-making processes. In the framework of the project, Beyond-GDP indicators were first reviewed and categorised, then characterised by demand for these indicators.

Most recently, the BRAINPOol project published a report on barriers to the use of alternative indicators in policy-making and discussed how these barriers can be overcome. The barriers were identified by studying seven case studies, carried out for Germany (German National Welfare Index), the UK (British Business Bank and Welsh Government Sustainable Indicator Set), Midi-Pyrenees in France, Rotterdam (Sustainability Profile), Chrudim in the Czech Republic (Healthy City Indicators) and at the OECD. 

Barriers

From the case studies, twelve different types of barriers were identified and grouped under five categories: resources; resistance; communication; complexity; organisation. 

Resource constraints

Under this category, two main barriers were identified. Firstly, many countries, regions and cities face budget limitations when it comes to statistics and introducing alternative indicators. Secondly, data is not available in many cases, or it is limited to a certain timeframe or geographical coverage. 

Resistance

The project found a passive resistance to the use of alternative indicators in many of the studied areas, due to perceived norms, habits and risk aversion. For example, many policy-makers, who in theory would support the use of alternative indicators, take a more conservative view. This is due to the fact that the existing traditional models are considered more robust and well-established. As a result, Beyond-GDP indicators are often considered redundant by politicians and business organisations. 

Communication

Since there is no agreed practical consensus on Beyond-GDP indicators, the variety of options results in divergence or sometimes even in contrasting ideas. Thus, there is confusion about the concepts and terminologies used among different stakeholders. Sometimes, this also means that incorrect assumptions are associated with alternative indicators, from either politicians or businesses. In addition, the project found that a strong narrative for engaging the public is also often missing.

Complexity

The lack of a single Beyond-GDP indicator not only results in communication barriers,but also makes it difficult to replicate the simple headlines, which are currently linked to GDP measures. Similarly, while GDP indicators can offer a simple narrative, the variety of Beyond-GDP measures makes it more complicated to describe and analyse progress towards well-being.

Organisation

Lastly, several constraints were identified by the project in terms of institutional take-up. The potential users of alternative indicators are reluctant and sceptical in many cases. Due to the complexities of the well-being topic, interlinkages must be considered, inducing the need for working across departments and organisations. A lack of inter-institutional human capacity was also identified as a potential barrier. 

Overcoming the barriers

In order to overcome some of the aforementioned barriers, the BRAINPOol project suggests: to demonstrate how Beyond-GDP indicators can result in more informed policy choices; to promote these indicators at different fora; to develop a database of such indicators; to identify potential users and tailor the indicators to their needs; to develop facilitation mechanisms for internal and inter-organisational co-operation; and lastly, to invest in human resources.

The project also suggests that, first, two key barriers should be tackled head-on: We need to create a strong narrative for alternative indicators and new techniques for integrated policy analysis.

The full report is available at the project website: Barriers to the use of alternative (‘beyond GDP’) indicators in policy making and how they are being overcome and can be overcome 

- Dora Almassy

See Also:

BRAINPOol

Beyond GDP

Characterizing Demand for 'Beyond GDP'

Review report on Beyond GDP indicators: categorisation, intentions and impacts

One day a year for happiness?

This blog, by Wikichild co-ordinator Melinda George, celebrates the second anniversary of the UN's International Day of Happiness. It provides background for the day as well as several initiatives to measure happiness and well-being in the UK and the EU. The post is a part of the Wikiprogress series on Happiness.

“When we contribute to the common good, we ourselves are enriched. Compassion promotes happiness and will help build the future we want.” – Ban Ki-moon, 1st annual International Day of Happiness 

The 20th March 2014, is the 2nd annual UN International Day of Happiness. This day was launched as a result of the UN resolution 65/309 which invites its member states “to pursue the elaboration of additional measures that better capture the importance of the pursuit of happiness and well-being in development with a view to guiding their public policies.” 

The focus on happiness is a result of a movement towards a more holistic approach to development and progress. This happiness and well-being approach looks further into various areas of life such as good governance, protection and preservation of the environment, the promotion of global cultures, and fair and equitable economic development. 

See this quote from the World Happiness Report: 

But it is not just wealth that makes people happy: Political freedom, strong social networks and an absence of corruption are together more important than income in explaining well-being differences between the top and bottom countries. At the individual level, good mental and physical health, someone to count on, job security and stable families are crucial.

In line with International Day of Happiness, the United Kingdom Office of National Statistics released a report on Tuesday entitled “Measuring National Well-being, Life in the UK, 2014”. This report provides a snapshot of well-being in the UK regarding 10 domains, along with European comparisons. These domains include both objective and subjective data. Overall, a large majority (77%) are satisfied with their life in the UK. Alongside the report, an interactive wheel and adjustable graphs by region are available to revel in the data a little longer.

The European Union’s Eurostat released a similar online report on Wednesday in light of this UN day. The report “Quality of life indicators” provides data about well-being using its “8+1” quality of indicators framework. Eight of these dimensions concern the functional capabilities citizens should have available to effectively pursue their self-defined well-being, according to their own values and priorities. The last dimension refers to the personal achievement of life satisfaction and well-being. The report discusses trends over time and differences between countries, demographic groups and age. 

Overall EU life Satisfaction, 2011

There are many ways in which you can become involved in this UN Day of Happiness. For instance, share a photo to your social media channel using the hashtag #happinessday, and it will be added to the happiness wall here. After all, we have so much to be happy about! 

- Melinda George

Wikichild co-ordinator

See also:

Gross National Happiness

World Happiness Report 2013

World Database of Happiness

World Happiness Index

The time is ripe for evidence

This blog, written by Rebecca Kilburn & Michael Frearson (RAND), is about the increasing commitment to use more child well-being evidence when making policy-related decisions. The post is a part of the Wikiprogress December Series on Governance.

Earlier this year, the European Commission renewed its commitment to promoting child well-being and made a recommendation entitled ‘Investing in children – breaking the cycle of disadvantage’ as part of the Social Investment Package to promote that goal. One of the guidelines was to strengthen the use of evidence-based policy. This particular recommendation is noteworthy, because it represents one of the first times that the European Commission has specifically advocated the use of evidence in policy making.
 
The field of education initiated several research synthesis projects early in the century, including the Best Evidence Encyclopedia and the What Works Clearinghouse in the US. More recently, the European Commission established the online European Platform for Investing in Children (EPIC), which screens and summarises evidence-based information related to children and their families across the EU and also provides a pan-European mechanism for individuals to share lessons learned in child policy and practice.

The demand for information about what works in the field of child and family services has grown due to the desire to ensure that tighter budgets are used effectively, coupled with the greater accountability that decision-makers face. In the early 1990s when the Cochrane Collaboration began gathering and pooling medical studies, an analogous project in the field of child and family policy would have been unthinkable due to a dearth of studies that would have met the criteria for high-quality evidence. But now there is a growing supply of research accumulating to inform child and family policy, and that research is increasingly meeting high standards of evidence. It employs rigorous methods, such as randomised trials, and there is now a sufficient quantity and quality of evidence to enable the aggregation of evidence-information in a systematic way.

As the supply of rigorous studies in the field of child and family policy has grown, so too have the resources that summarise evidence-based information for decision makers. In the United States, at least nine evidence-based practice platforms (EBPs) present information and EBP resources that include evidence that relates to child and family services there. In the EU, EPIC provides information on policies and practices which can help children and families cope with the current challenges which emerged due to the European economic climate. A central component of this project is an online repository of evidence-based practice. The ‘Practices that Work’ section of EPIC gathers, reviews and summarises evidence on effective strategies across the 28 member states.

Today’s austerity measures are unprecedented in the history of the EU. In 2013, EU leaders cut its seven-year budget for the first time ever. Additionally, major stakeholders such as Eurochild have noted that the well-being of children across the EU has deteriorated in the last year as result of the economic crisis. Recognition of the impact of the financial crisis on children, and the lingering austere economic climate, has led public and private supporters of child and family services to further scrutinise expenditures. Decision makers want to ensure that their limited funds are being used for policies and services that are effective. At the same time that funding for child and family services has come under strain, policymakers at all levels of government have also been subject to greater accountability than in the past.

Decision makers now have much easier access to a growing amount of evidence-based information related to children’s issues than in the past. A number of considerations can help put this information to best use:

First, even though the supply and quality of evidence-based information is greater now than ever before, it is not necessarily the case that evidence-based information should be given more weight than other factors that contribute to decision making. Evidence is an important piece of the policy making puzzle, but other factors, such as political considerations, values, funding and experience will necessarily also need to contribute to decision making. Innovation also matters greatly, as does facilitating the exchange of experience and practical lessons learned. Still, evidence has a place at the policy making table, and platforms such as EPIC are but one of the strategies for making evidence more useful for decision making.

Second, the supply and quality of information is highly variable across sub-fields of child policy. In an age of burgeoning availability of information, decision makers can take advantage of evidence platforms to help understand what is the ‘best available evidence’ that relates to children’s issues.

Third, decision makers will need to adapt evidence to meet local conditions, as evidence from around the EU is generated in differing contexts. The User Registry located within the ‘Practices that Work’ section of the EPIC website enables the capture of a number of practices and information on innovative practices to be shared with users and stakeholders. In doing so, it recognises that a variety of approaches may be chosen by stakeholders and practitioners.

Finally, decision makers can contribute to better policy making by sharing experiences and innovations in children’s policy, aggregating lessons learned in using evidence in the same way that the research evidence itself is aggregated. Evidence-based platforms (EBPs) such as EPIC recognise the importance of collective experience with features to capture and share this type of information in addition to aggregating the research evidence.

 A way forward may be for not-for-profit organisations and charities to encourage funders (be they government or alternative sources) to increase the share of funds available for evaluations. This approach would help meet requirements to provide evidence from evaluations where it is needed, and strengthen the evidence base. In countries such as the United States, approaches to evaluations have shifted from a pass/fail typology to a focus on Continuous Quality Improvement and program improvement. Evidence-based platforms favour such an approach, which can help individual programs and entire fields of intervention to become more effective through evaluation and evidence.

Dr Rebecca Kilburn is the co-Principal Investigator of the European Platform for Investing in Children project at RAND. She served as Director of the Promising Practices Network (PPN) on Children, Families and Communities for nearly 15 years. In this capacity, she helped develop the evidence criteria and processes used to conduct reviews, and she has overseen hundreds of systematic reviews of child and family programmes. During her 20 years at RAND, much of Dr Kilburn’s research has examined the effects of public and private investments in childhood. 

 Dr Michael Frearson is a Research Leader for education and skills at RAND Europe. He has more than 15 years’ experience working with schools, further and higher education and work-based learning. Michael has directed research on children, young people, employment and skills and conducted high-profile evaluations of flagship public policy interventions for children and young people, such as the Play Pathfinders and Play Builders programme and the Learner Home Access to Technology programme (for the UK Department for Education).   

This blog first appeared as on 2 December, 2013 on the Alliance for Useful Evidence website, as well as a RAND Europe technical note. 

Mind the gap: Well-being differences growing in several countries in the EU

This post, written by Saamah Abdallah of the new economics foundation (nef), is part of the Wikiprogress focus on How's Life? 2013 chapter on "Well-being and the global financial crisis" and or series on Subjective Well-being.

There is a strong perception that the economic crisis has ‘disproportionately hit those who are already vulnerable’ (European Commission) and has ‘deepened inequalities’. This month, the European Foundation for the Improvement of Working and Living Conditions has published a report showing that, in several countries in the EU, this growing inequality can be seen in well-being as well as more traditional metrics such as income inequality.

The report looks at how subjective well-being changed between 2007 and 2011 in the 27 countries of the EU over that time. As might be expected, average life satisfaction in several countries fell significantly, including in Greece and Estonia, as well as in some Nordic countries such as Sweden and Finland.  But it rose in several other countries, including the new accession countries (Romania and Bulgaria), Poland, Spain and Italy. Some countries presented mixed patterns, with some measures appearing to show increases in well-being, whilst others showed decreases (for example perceived social exclusion rose in Spain despite increases in life satisfaction). Overall, the pattern was one of declining well-being on the majority of measures.

What was more interesting, however, was the differences in trends when one looked at different population groups within countries. For example, whilst average life satisfaction did not change in the UK and Ireland, it fell significantly for those in the bottom income quartile, and rose significantly for those in the top income quartile.  Meanwhile in Spain, Italy and Portugal, the surprising increase in life satisfaction can only be seen for those in the top half of the income distribution – there was no increase in life satisfaction for people in the bottom half of the income distribution. Indeed, overall happiness fell significantly for those in the second income quartile and perceived social exclusion rose. Finally, in Greece, despite the brutal economic crisis, there has been no fall in life satisfaction for those in the top half of the income distribution.  In contrast, average life satisfaction fell by a whole 1.0 points (on a scale of 1-10) for those in the bottom income quartile.

In summary – the effects of the economic crisis are not being felt equally in many parts of Europe.  And whilst some people argue that high economic inequality is acceptable and even desirable because it stimulates effort, it is hard to see a positive side to growing well-being inequality. You can theoretically argue that people have chosen to forfeit income in exchange for more free time, for example, but you can’t argue that people have willingly chosen to have lower well-being.  And reducing the well-being of the poorest is hardly an effective way to increase their motivation, given that it is usually positive emotions that lead to people being able to improve their situation (according to broaden-and-build theory).  Growing well-being inequality is the clearest manifestation yet of the unfair impact of the economic crisis.

Saamah Abdallah

Read "Quality of life in Europe: Subjective well-being".