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Poverty

In 2017 some 113 million people in the European Union were at risk of poverty or social exclusion. This is over one-fifth of the population. At just below 17 percent, the share was lower in the Netherlands. Income inequality in the Netherlands is also relatively low and has been around the same level since the start of the century.

meetlat-14-armoede_ENG BG RO GR L T I T L V ES HR HU C Y EE PO IE EU UK L U BE PL M T DE A T SE DK FR SL NL SK FI CZ 22.4% 17.0% R i s k o f p ov erty o r s oc i al e x c l u s i o n , 2017

People living in a household with an income below the European poverty threshold – which is less than 60 percent of the national median (equivalised) disposable income – are at risk of poverty. In 2017, the share of EU inhabitants at risk of poverty varied between 9.1 percent in the Czech Republic and 23.4 percent in Romania. The Netherlands has the fifth lowest at-risk-of-poverty rate: 13.2 percent. This is well below the EU average of 16.9 percent. Poverty thresholds are determined per country and depend on the country’s level of prosperity.

Social exclusion occurs when those members of a household who are able to work have little or no paid employment or are facing serious financial problems. According to these criteria, almost one in six people in the Netherlands are at risk of poverty or social exclusion. In Romania and Bulgaria, this is the case for almost 40 percent of the population.

14.1Risk of poverty or social exclusion (% of population), 2017

Risk of poverty or social exclusion Severe financial constraints In households with low work intensity
Czech Republic 12.2 3.7 5.5
Finland 15.7 2.1 10.7
Slovakia 16.3 7.0 5.4
Netherlands 17.0 2.6 9.5
Slovenia 17.1 4.6 6.2
France 17.1 4.1 8.1
Denmark 17.2 3.1 10.0
Sweden 17.7 1.1 8.8
Austria 18.1 3.7 8.3
Germany 19.0 3.4 8.7
Malta 19.2 3.3 6.7
Poland 19.5 5.9 5.7
Belgium 20.3 5.1 13.5
Luxembourg 21.5 1.2 6.9
United Kingdom 22.0 4.1 10.1
EU 22.4 6.6 9.5
Ireland 22.7 5.2 16.2
Portugal 23.3 6.9 8.0
Estonia 23.4 4.1 5.8
Cyprus 25.2 11.5 9.4
Hungary 25.6 14.5 6.6
Croatia 26.4 10.3 12.2
Spain 26.6 5.1 12.8
Latvia 28.2 11.3 7.8
Italy 28.9 10.1 11.8
Lithuania 29.6 12.4 9.7
Greece 34.8 21.1 15.6
Romania 35.7 19.7 6.9
Bulgaria 38.9 30.0 11.1

Income inequality varies greatly

In countries with relatively few incomes below the poverty line, income disparities are usually limited. The Netherlands ranks among the most egalitarian countries, together with Slovakia, Slovenia, the Czech Republic, Finland and Belgium. These countries score best on two different measures of income inequality: the Gini coefficient and the so-called 80/20 ratio. The Gini coefficient ranges between 0 and 1. A value of 0 means that everyone has exactly the same income, while 1 means maximum inequality: one person has all the income and all the others have none. The 80/20 ratio indicates the ratio between the highest and the lowest incomes (in 20 percent-groups).

The Nordic EU countries have the most egalitarian societies according to both standards. Large income gaps are mainly found in Eastern and Southern Europe. The gap is largest in Bulgaria with a Gini coefficient of 0.40 and a 80/20 ratio of 8.2, meaning incomes in the upper income group (80th percentile) are over eight times as high as in the lowest income group (20th percentile).

4 EU countries have a lower at-risk-of-poverty rate than the Netherlands
23% of Romanians are at risk of poverty

Sources

Eurostat – At-risk-of-poverty rate

Eurostat – People at risk of poverty or social exclusion

Eurostat – Severe material deprivation rate

Eurostat – Low work intensity

Eurostat – Income quintile share ratio (S80/S20)

Eurostat – Gini coefficient

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