Impact of the COVID-19 pandemic on poverty in the European Union: insights from panel data on incidence, depth and key drivers
Impact of the COVID-19 pandemic on poverty in the European Union: insights from panel data on incidence, depth and key drivers

Summary/Abstract: The COVID-19 pandemic has caused significant disruptions to the economies and societies worldwide. The study aims to show how this pandemic affected the incidence and severity of poverty in EU countries during the first year of its course. By means of a three-level hierarchical modelling technique with panel data from the EU Statistics on Income and Living Conditions (EU-SILC) survey for the years 2019 and 2020, determinants of poverty during this period were identified, alongside relevant macro- and microeconomic factors. The obtained results attest to multi-dimensional changes in the incidence and severity of poverty in European countries, resulting from their different economic performance, labour market conditions and policies adopted by them in response to the pandemic. In the analysed period, key factors affecting incidence and severity of poverty at individual level were the household type, household members’ educational attainment and economic status. At country level, these were: GDP per capita, income inequalities between the poor and non-poor, and residence in Northern and Western European countries. The analysis highlights the importance of considering both the incidence and depth of poverty in the process of policymaking aimed at poverty reduction. The results provide a basis for developing more effective strategies to combat poverty and reduce the adverse effects of systemic shocks on vulnerable groups within the EU. Given the critical role of both individual- and country-level determinants, policy interventions should be tailored to the specific conditions of each EU Member State.

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