Abstract

The relative poverty line, defined as 60% of the median disposable income, is one of the leading social indicators for policy within the European Union. In the EU's growth strategy Europe 2020 one of the headline targets refers to the reduction of poverty, measured by the national relative poverty line: “The number of Europeans living below the national poverty lines should be reduced by 25%, lifting over 20 million people out of poverty.” Several studies and official statistics show that poverty rates, i.e. the share of the population who live below the relative poverty line, vary distinctly among EU-countries.  However, in almost all countries unemployed persons have a very high risk of relative poverty. This is especially true for Germany, where almost 68 percent of the unemployed were below the poverty threshold in 2014, according to the EU-SILC Survey.

In this project, we investigate in a comparative perspective to what extent the poverty risk of the unemployed is mitigated by the tax-and-benefit system in EU countries. We also take into account the role of other confounding factors such as gross-income inequality, the composition of the households the unemployed live in, and individual characteristics. The empirical analysis will be based on the latest available data of the EU-SILC survey.