Income, Deprivation and Economic Strain: An Analysis of the European Community Household Panel. ESRI WP109, June 1999

Layte, Richard and Nolan, Brian and Maitre, Bertrand and Whelan, Christopher T. (1999) Income, Deprivation and Economic Strain: An Analysis of the European Community Household Panel. ESRI WP109, June 1999. [Working Paper]

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Abstract

This paper is concerned with the relationship between household income and life-style deprivation, and how they impact on households’ perceptions of economic strain. We take as our point of departure findings for Ireland showing that the relationship between income and deprivation is weaker there than widely assumed, as well as the importance of taking into account the way non-monetary indicators cluster systematically into different dimensions of deprivation (Callan et al 1993, Nolan & Whelan 1996a&b) . In this paper we examine how far these conclusions about income and deprivation can be generalised to other European Union countries, using data on twelve countries from the first wave of the ECHP. Our central finding is that there are striking similarities across countries in the structuring of deprivation. However, the extent to which income-deprivation correlations are similar or different across countries depends on the particular dimension being considered. We also use this important new dataset to explore the value of knowing both income and deprivation levels through an analysis of their impact on households’ subjective assessments of how difficult it is to make ends meet. Once again we find a remarkable degree of uniformity across countries.

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