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Title:Can higher employment levels bring lower poverty in the EU? Regression based simulations of the Europe 2020 target PDF Logo
Authors:Marx, Ive
Vandenbroucke, Pieter
Verbist, Gerlinde
Issue Date:2011
Series/Report no.:Discussion Paper series, Forschungsinstitut zur Zukunft der Arbeit 6068
Abstract:At the European level and in most EU member states, higher employment levels are seen as key to better poverty outcomes. But what can we expect the actual impact to be? Up until now shift-share analysis has been used to estimate the impact of rising employment on relative income poverty. This method has serious limitations. We propose a more sophisticated simulation model that builds on regression based estimates of employment probabilities and wages. We use this model to estimate the impact on relative income poverty of moving towards the Europe 2020 target of 75 percent of the working aged population in work. Two sensitivity checks are included: giving priority in job allocation to jobless households and imputing low instead of estimated wages. This paper shows that employment growth does not necessarily result in lower relative poverty shares, a result that is largely consistent with observed outcomes over the past decade.
Subjects:employment growth
poverty
Europe 2020
household work intensity
low pay
JEL:I32
J21
R28
J68
Persistent Identifier of the first edition:urn:nbn:de:101:1-201111072823
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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