Household joblessness and its impact on poverty and deprivation in Europe

Working-age households where no-one is in work have become an increasing focus of policy concern even before the economic crisis, and the European Union (EU) has included household joblessness in its new poverty reduction target for 2020. This paper focuses on the variation across EU countries in the prevalence of household joblessness and its impact on income poverty and deprivation, and on the implications for the new EU poverty reduction target. It highlights first that there are some divergences across key data sources in the extent of joblessness. The prevalence of household joblessness varies substantially across EU countries, but there is little evidence of a consistent pattern among groupings of countries often categorized together in terms of welfare regime or geographically. In aggregate there is little association between the overall extent of household joblessness in a country and the percentage in relative income poverty or above a material deprivation threshold. At a micro level, being in a jobless household has a substantial impact on the likelihood of being in relative income poverty or deprived, but the scale of these impacts is shown to be very much greater in some countries than in others, and to vary between single-adult and multiple-adult households. In most EU countries little more than half the working-age adults in jobless households are either income-poor or deprived, so including joblessness in the poverty reduction target does make a difference, without a clearly articulated rationale.