Working group on Living Conditions May 2006 Proposed indicators of non monetary deprivation : Update on the basis of EU-SILC 2004 and proposals of EU indicators Item 7.7 of the agenda Doc.IPSE/77/06

Recent context n 2005 ISG Activity report “ISG delegates agreed to the transitional arrangements of using material deprivation statistics and indicators aggregated by dimension in the forthcoming reports on social inclusion of the Commission.” n 2005 Luxembourg’s presidency conference n 2006 ISG work program n Indicators presented so far in Joint reports, Estat ‘Statistics in Focus’ and web site

Purposes n Update results on the basis on new EU-SILC 2004 data, available for 12 EU15 MS + Estonia + Norway and compare results with previous analysis (ECHP, SILC 2003) n Built on previous discussions (selection of items, aggregation by dimension,...) n Make proposals of Indicators to be used in the streamlined social inclusion portfolio

National and EU arguments in favour of such indicators n To offer a complementary picture of the situation in new Member States and Candidate countries n Interest in multiplying approaches of poverty measurements at national level n Because resources and income are not necessarily the same thing n To take into account Poor housing

Factor analysis n Check consistency of the dimension structure between ECHP and EU-SILC

Factor analysis n Confirmatory factor analysis -Good FIT »Three-factors solution »Two-factors solution: offers the advantage of presenting only 2 indicators (material deprivation – poor housing), based on a larger set of items. -Being deprived in one dimension is correlated with deprivation in other dimensions

New items n Two new SILC variables: -Capacity to face unexpected expenses »Harmonised from 2005 »Less subjective than making ends meet -Washing machine n Lack of space item ? »based on number of rooms/person »weakly correlated with other items »See separated results in annex A3

Main results n Proportion of people lacking at least x items in each dimension -Advantage of transparency -Accumulation of deprivations at individual level -Close to the collective representation of deprivation

Sensitivity analysis (strain+dur)

Comparison between poverty and material deprivation (econ. str + dur.)

Comparison between poverty and poor housing

The relative position of children Differences significant and at the advantage of children Differences significant and at the disadvantage of children Differences not significant between children and total population

The relative position of elderly Differences significant and at the advantage of elderly Differences significant and at the disadvantage of elderly Differences not significant between elderly and total population

Weighted approach n Principles of construction of weights: »The item weights vary positively with the proportion of “haves” and are normalized to 1 over items in the dimension; »The reference population chosen is the country ; n Difficult to choose a threshold n Mean index could be weighted, but is not very transparent

Proposals (1) n Into the list of primary common indicators of social inclusion, it is proposed to include the share of people lacking at least: »2 items in Material deprivation dimension »1 item in Poor housing dimension -Broken down by age and gender. -The number of dimensions can be discussed. -As well as the eventual inclusion of a lack of space item in the housing dimension.

Proposals (2) Into the list of secondary indicators: include additional breakdowns (household type, work intensity, activity status and tenure status), as they could usefully explain and complement the main indicators.

Proposals (3) n In context information, it is proposed to include: -The proportion of people deprived in each individual item -The distribution of total number of deprivations, by dimension Eventually broken down by main age groups and gender n Weighted approach »difficult to implement in a transparent way »punctual deepened Eurostat studies.