Collaboration between University of Essex and Eurostat publishes new poverty statistics for the European Union

A collaboration between the University of Essex and Eurostat, the statistical office of the European Union, has resulted in the publication of a new set of experimental statistics by Eurostat.

The flash estimates of poverty and income distribution in 2016 - for all EU countries except the UK for which data on incomes in 2016 was already available - mainly use EUROMOD, the tax-benefit microsimulation model and employ related tools and methods developed at the University of Essex. Microsimulation routines using the EUROMOD model and running on adjusted EU Statistics on Income and Living Conditions (EU-SILC) data from earlier years form the basis of the flash estimates in 22 of the 27 countries.

The publication of these experimental statistics forms a basis for feedback from users and the research community and the further improvement of these estimates. Eurostat’s flash estimates of at-risk-of-poverty (AROP) rates and evolution of income deciles provide policy makers with an early indication of the magnitude and the direction these important statistics are moving in prior to the release of the official estimates in summer next year.

In anticipating the official numbers - which will be based on the yet-to-be-released 2017 EU-SILC data - the flash estimates are not expected to capture perfectly changes in the EU-SILC estimates. Nevertheless they improve the timeliness with which estimates are available of the directions of change of important social indicators.

These experimental results show that poverty risk is estimated to have remained stable in most EU countries.

The publication of these statistics is the culmination of two years of cooperation and collaboration between Eurostat and the EUROMOD team based at Essex’s Institute for Social and Economic Research (ISER). The aim is to issue the statistics annually in future.

Whilst the flash estimates are calculated and produced by Eurostat with the cooperation of National Statistical Institutes, the methodology behind the statistics draws heavily on pioneering work done at Essex to “nowcast” income distributions and poverty rates using EUROMOD, including techniques to statistically adjust older EU-SILC data to reflect changes in the labour market and to the level of market incomes since the data were collected, combined with the simulation of the latest tax-benefit policies.

The new experimental statistics can be found here on the Eurostat website.