EU statistics on income and living conditions (EU-SILC) methodology - in-work poverty

This article is part of a set of articles describing the methodology applied for the computation of the statistical indicator pertinent to the subject area of In-work poverty (ilc_iw) within the overall domain of Income and living conditions. For this statistical indicator, namely in-work at-risk-of-poverty rate, the article provides a methodological and practical framework of reference. Moreover, since the statistical indicator is of multidimensional structure and can be analysed simultaneously along several dimensions, the separate datasets providing this indicator along with different combinations of dimensions are also presented.

Full article

Description

In-work at-risk-of-poverty rate refers to the percentage of persons in the total population who declared to be at work (employed or self-employed) who are at-risk-of-poverty (i.e. with an equivalised disposable income below the risk-of-poverty threshold, which is set at 60 % of the national median equivalised disposable income (after social transfers)).

Statistical population

The statistical population consists of all persons living in private households aged 16 and over who declared to be at work – however this indicator refers to individuals aged 18 and over.

However, the indicator covers subsets of population when presented along with different dimensions. More specifically, it covers the population aged 18 to 59 years living in private households who declared to be at work (excluding those with less than 7 months declared in the calendar of activities) when broken down by work intensity of the household.

Specifically, when broken down by months worked and full-/part-time work, it refers to all persons living in private households aged 16 and over and have spent time during the last year working full or part time either as employee or self-employee.

In any case, people with less than 7 months declared in the calendar of activities and persons living in collective households and in institutions are generally excluded from the target population. Additionally, people with missing values for equivalised income and for any of the different dimensions that the indicator is presented, are excluded from calculations.

Reference period

The indicator is collected and disseminated on an annual basis and refers to the survey year.

The reference period for all dimensions along with the indicator is disseminated is the survey year, except for age, income and activity status. As far as age is concerned, it refers to the age of the respondent at the end of the income reference period, based on which the household type is also derived. The income reference period is a fixed 12-month period (such as the previous calendar or tax year) for all countries except the United Kingdom, for which the income reference period is the current year, and Ireland, for which the survey is continuous and income is collected for the last twelve months. For income, activity status, work intensity, and number of months worked the reference period is the income reference period.

Unit of measurement

The indicator is also made available as a percentage of persons at work.

Dimensions

Each dataset provides the indicator along with the Geopolitical entity and time and the following dimensions:

age group and sex
household type
work intensity of the household and household type (population aged 18 to 59 years)
educational level (ISCED)
sex and [type of contract
months worked
working time
age group, sex and citizenship (population aged 18 and over)
age group, sex and country of birth (population aged 18 and over)

Calculation method

In work at-risk-of-poverty rate (IWARPT) broken down by each combination of dimensions (k) [math](IWARPT_{at\_k})[/math] is calculated as the percentage of people classified as employed in each k dimension who are at-risk-of-poverty over the total population in that k.

The weight variable used is the Personal cross – sectional weight (PB040).

[math]IWARPT_{at\_k}=\frac{\sum\limits_{i=j\_at\_k}\;PB040_{i}}{\sum\limits_{i\_at\_k}\;PB040_{i}}\times 100[/math]

where j denotes the population, or subset of population, who is at risk of poverty (EQ_INC20<ARPT60) .

With regard to the calculation of the in-work poverty, the following methodological issues should be taken into consideration:

Unless specified, at-risk-of-poverty rates are assumed to be ‘after social transfers’ (i.e. they include social benefits such as pensions and unemployment benefits).
Unless specified, at-risk-of-poverty rates relate to the at-risk-of-poverty threshold that is calculated for the total population of a member state at 60 % median equivalised disposable income level.

Moreover, there are some methodological limitations that pertain to the following dimensions accompanying the indicators: age, activity status, self-defined working status, citizenship, country of birth, educational level, household type, work intensity of the household.

Main concepts used

For the production of the indicator relevant to the subject area of in-work poverty, the variables listed below are also involved in computations:

Equivalised disposable Income (EQ_INC) and poverty status.

Other concepts that should be taken into consideration are the following:

Type of contract (PL140) refers to the main job (current if PL031=1, 2, 3 or 4 and last otherwise) of the person. If multiple jobs are held or were held, the main job should be the one with the greatest number of hours usually worked.

Person at work is a person who reported data on his activity status for at least seven

months of the reference year and which spent at least half of this year in work

SAS program files

SAS programming routines developed for the computation of the EU-SILC datasets providing the in-work-at-risk-of-povety along with the different dimensions are listed below.

Dataset	SAS program file
In-work at-risk-of-poverty rate by age and sex (ilc_iw01)	IW01.sas
In-work at-risk-of-poverty rate by household type (ilc_iw02)	IW02.sas
In-work at-risk-of-poverty rate by work intensity of the household (population aged 18 to 59 years) (ilc_iw03)	IW03.sas
In-work at-risk-of-poverty rate by educational attainment level (ilc_iw04)	IW04.sas
In-work at-risk-of-poverty rate by type of contract (ilc_iw05)	IW05.sas
In-work at-risk-of-poverty rate by months worked (ilc_iw06)	IW06.sas
In-work at-risk-of-poverty rate by full-/part-time work (ilc_iw07)	IW07.sas
In-work at-risk-of-poverty rate by broad group of citizenship (population aged 18 and over) (ilc_iw15)	IW15.sas
In-work at-risk-of-poverty rate by broad group of country of birth (population aged 18 and over) (ilc_iw16)	IW16.sas