Monetary poverty and income inequality indicators (EU-SILC survey)
Monetary poverty and income inequality indicators were accepted by the Laeken European Council on December 2001, with an aim to evaluate and observe EU Member state progress in decreasing social exclusion. These indicators are relative and they are derived from average income level. The indicators characterise relative instead of absolute at-risk-of poverty among population.
Terms and definitions
Monetary poverty and income inequality indicators
Disposable (net) income
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 for tax adjustments from State Revenue Service (for business activities, eligible costs–education, medical treatment etc.).
From this total amount of income the following are deducted: real estate tax, amount of money regularly given to other households, amount paid to State Revenue Service due to unpaid or insufficiently paid income tax.
Equivalised disposable income
Household disposable income divided by its "equivalent size", which is calculated with the help of the so-called "modified OECD" equivalence scale.
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.
Relative median at-risk-of-poverty gap
At-risk-of-poverty or social exclusion risk
Persons with disposable income below at-risk-of-poverty threshold or persons subjected to severe material deprivation or employed in low intensity work.
It is considered that person is subjected to severe material deprivation is it is lacking at least 4 items among the 9 following:
- to pay rent or utility bills;
- keep home adequately warm;
- face unexpected expenses;
- eat meat, fish or equivalent vegetarian meal every second day;
- a week holiday away from home, or could not afford (even if wanted to);
- a car;
- a washing machine;
- a colour TV;
- a telephone.
The work intensity of the household refers to the number of months that all working age household members have been working during the income reference year as a proportion of the total number of months that could theoretically be worked within the household. Individuals are classified into five work intensity categories that range from WI=0 (jobless household), 0<WI<1, 0<WI<0.5 and 0.5≤WI<1 to WI=1 (full work intensity). It is considered that person is living in household with low work intensity if WI≤0.2.
Share of persons with an equivalised disposable income below 60% of the national median equivalised disposable income.
At-risk-of-poverty rate by work intensity of the household
The work intensity of the household refers to the number of months that all working age household members have been working during the income reference year as a proportion of the total number of months that could theoretically be worked within the household.
Individuals are classified into five work intensity categories that range from WI=0 (jobless household), 0<WI<1, 0<WI<0.5 and 0.5≤WI<1 to WI=1 (full work intensity).
S80/S20 quintile share ratio index
One fifth (20%) of the number of surveyed households grouped in increasing sequence according to the disposable income per one household member.
Private household (household)
Several persons living in one dwelling and sharing expenditures or one person having separate housekeeping.
Number of equivalent consumers in household
Households of various types have different consumption needs and not always they are directly proportional to the number of persons in household.
Three persons do not need three times wider useful floor space and three times more consumer durables. Consumption differs also between children and adults.
This phenomenon hampers comparison of the data among households of various types; therefore equivalence scales are used, as a result data are calculated per number of equivalent consumers in household, and that ensures comparability of the data among various households.
European Statistical System is using so-called "modified OECD* equivalence scale" – it gives 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. The number of equivalent consumers in household is acquired by summing the weights given to each household member.
*OECD – Organisation for Economic Co-operation and Development.
Data collection and statistical processing
Survey method and data source
Monetary poverty and income inequality indicators are acquired with the help of Community Statistics on Income and Living Conditions (EU-SILC). One of the main study objects of the EU-SILC is annual income of a household – their composition and level.
In order to acquire information four questionnaires were developed: Household Register, Household Questionnaire Form and Individual Questionnaire Form. Each questionnaire has its own aim and information in each questionnaire does not overlap with information in other forms. Fourth form is a module questionnaire that each year aims at researching different theme.
Household Register is questionnaire, which includes general information on each household member. It is mainly demographic information on persons living in the household, as well as on those persons, who have left the household.
Household Questionnaire Form includes questions concerning the household generally. It includes following questions: housing and housing conditions, housing costs, economic situation of the household, total household income, inter-household transfers and agricultural production in household.
Individual Questionnaire Form is filled in on each household member aged 16 and over. It includes questions on employment, income, education and health.
Survey is based also on data of the State Revenue Service on natural persons/taxpayers and State Social Insurance Agency data on state pensions and benefits.
The basic unit of EU-SILC survey is persons living in private households. Survey does not include collective households (old peoples’ homes, boarding schools for disabled children, student hostels, hotels, barracks, hospitals, sanatoriums, prisons, etc.).
During the survey information was obtained on whole household as well as on each household member aged 16 and over. Households belonging to longitudinal section are surveyed for several years (maximum 4 years). In Latvia four-year rotation panel is used and all household members, who in the first survey year were at age of at least 14, are sample respondents.
|Year||Sample size of EU-SILC||Completed questionnaire sets||Individual interviews (persons)||Non-response rate|
|2018||7 972||5 833||10 785||26.8%|
|2017||8 087||6 014||11 304||25.6%|
|2016||8 022||6 042||11 637||24.7%|
|2015||8 008||6 113||11 726||23.7%|
|2014||8 209||6 125||11 929||25.4%|
|2013||8 510||6 309||12 442||25.9%|
|2012||8 572||6 499||12 964||24.2%|
|2011||8 463||6 599||13 503||22.0%|
|2010||8 151||6 255||12 999||23.3%|
|2009||7 610||5 797||12 207||23.8%|
|2008||7 042||5 196||10 910||26.2%|
|2007||6 717||4 471||9 270||33.4%|
|2006||6 018||4 315||9 071||28.3%|
|2005||5 813||3 843||7 913||33.9%|
EU-SILC data are extrapolated on all private household and household members living in these households. Weighting process includes application of design weights, which are corrected by actual response rate. Additional data are calibrated by population sex and age.
In the survey Community Statistics on Income and Living Conditions (EU-SILC) following classifications are used:
- International Standard Classification of Occupations (ISCO-08);
- Statistical Classification of Economic Activities (NACE Rev. 2);
- International Standard Classification of Education (ISCED).
Contact person on methodology
Central Statistical Bureau Social Statistics Department