Large share of population is still at risk of poverty

03.02.2015

Data of the Central Statistical Bureau (CSB) show that in 2013, 645 thousand persons or 32.7% of the population in Latvia were at risk of poverty or social exclusion1. It is 2.4 percentage points less than in 2012. The number of persons facing severe material deprivation1 also decreased significantly, from 24% in 2013 to 19.2% in 2014.

Due to the growth in the average income of population in 20132, at-risk-of-poverty threshold1 also increased, reaching EUR 260 per month (in 2012 - EUR 233). In 2013, 21.2% of the Latvian population were subjected to the risk of poverty, which is 1.8 percentage points more than in 2012.  Growth in the share of population at risk of poverty was most significantly affected by the fact that growth in income from labour was more rapid than growth in income from pensions, allowance and other payments from the budget3. The average monthly wages and salaries increased by EUR 28 or 5.7%, while monthly old-age pension grew on average by only EUR 2.67 or 1%.

The share of people aged 65 and over subjected to the risk of poverty increased significantly in 2013 (from 17.6% in 2012 to 27.6% in 2013). In turn, the share of children at risk of poverty compared to 2012 grew by 0.9 percentage points, reaching 24.3%.

Share of population at risk of poverty, by age group
2008 – 2013 (in per cent)

 

2008

2009

2010

2011

2012

2013

Total

26.4

20.9

19.0

19.2

19.4

21.2

of which in age group (years):

 

 

 

 

 

 

0-17

26.3

26.3

24.7

24.4

23.4

24.3

18-64

20.5

20.4

20.2

19.3

18.8

18.4

65+

47.6

17.2

9.1

13.9

17.6

27.6

The risk of poverty is still high among households with dependent children and a single parent. In 2013 at-risk-of-poverty rate in these households increased by 2.8 percentage points, reaching 41.1%. In turn, in households with three or more children and two adults the risk of poverty declined significantly - from 32.6% in 2012 to 27.7% in 2013. It can be explained with increase in state funding for state aid programmes such as childcare benefit, parent allowance, maternity and paternity benefit, and allowance for child care for twins or more children born in one delivery.

In 2013 at-risk-of-poverty rate among employed persons reached its lowest level since 2004 - 8.1% (in 2012 = 8.9%).  

At-risk-of-poverty rate among retired persons has grown rapidly, reaching 29.4% in 2013 compared to 18.8% in 2012. If a person aged 65 and over lives alone, the risk of poverty in this type of household grew even more significantly from 29.2% in 2012 to 51.1% in 2013.

At-risk-of-poverty rate4 in various socio-economic groups of population
2004 – 2013 (in per cent)

Data source: Central Statistical Bureau of Latvia

Data on relative poverty and social exclusion indicators have been obtained from "European Union Statistics on Income and Living Conditions (EU-SILC)" survey. EU-SILC 2014 surveyed 6.1 thousand households interviewing 12 thousand respondents aged 16 years and over.

For the at-risk-of-poverty calculations data on population income in 2013 were used. Data on household income in 2014 will be compiled in a similar survey conducted from March till the end of June 2015.

Unlike the CSB, Eurostat (Statistical Office of the European Communities) publishes monetary data on poverty and social exclusion with reference to the year when the survey was carried out, while population income data included in the indicator are compiled on the previous calendar year.   On 4 November 2014 Eurostat published EU-SILC 2013 survey data on poverty and social exclusion, presenting data on income in Latvia in 2012.

More information on the results and methodology of EU-SILC survey is available in the CSB database section "Monetary poverty and income inequality indicators”.

 

More information:
Viktors Veretjanovs
Income and Living Conditions Statistics Section
Tel. +371 67366609

 

Methodological explanations

1 Persons with income less than at-risk-of-poverty threshold; or severely materially deprived; or employed at work with low intensity are subjected to risk of poverty or social exclusion.
  At-risk-of poverty thresholdis 60% of the national median equivalent disposable income. Median is statistical indicator characterising central value (midpoint of the breakdown) of the observations grouped from the lowest value to the highest.
  Severe material deprivation- it is considered that a person is subjected to severe material deprivation if he/she cannot afford at least 4 of the 9 following items:
  1) to pay for rent and public utilities,
  2) to keep home adequately warm,
  3) to face unexpected expenses,
  4) to have a meal with meat, fish or products with equivalent protein content every second day,
  5) to spend one week annual holiday away from home,
  6) a personal car,
  7) a washing machine,
  8) a colour TV,
  9) a telephone.
  Work intensity is determined by the share of months in a year that working-age household members have been working during the income reference year. Individuals are classified by work intensity categories that range from WI=0 (jobless household) to WI=1 (full work intensity).  It is assumed that a person lives in a household with low work intensity if WI ≤ 0.2.

Disposable income is cash income from labour, employee income in kind received by using company car for private needs estimated in cash, income or losses received from self-employment, received pensions and benefits, regular material assistance from other households, profit from interests of deposits, dividends, shares, income received by children aged under 16, income from property rental, receipts from tax adjustments from the State Revenue Service (for business activities, eligible costs – education, medical treatment etc.).

Social transfers are pensions and benefits paid by the state or municipality, child maintenance payments, scholarships, social insurance benefits and compensations, including the ones paid by other countries.

At-risk-of-poverty rate – share of persons (in per cent) with an equivalised disposable income below the at-risk-of-poverty threshold.
  Equivalent disposable income is household disposable income calculated per equivalent consumer. It is obtained by dividing household income by equivalised household size which is made using the modified OECD equivalence scale (1.0; 0.5; 0.3). This scale gives a weight of 1.0 to the first adult, 0.5 to any other household member aged 14 and over, and 0.3 to each child aged less than 14.