Social and psychological consequences of income poverty and material deprivation from a cross-national perspective

The goals of the paper are twofold: firstly, to explore and explain cross-national differences in the “social” and “psychological” consequences of multidimensional poverty and secondly, to examine the interrelations and relative importance of the dimensions of poverty with respect to these consequences. The term “multidimensional poverty” refers to the approach employed in this paper, where in addition to income other, more direct measures of living-standard deprivation are taken into account. Specifically, I use three dimensions of living-standard deprivation as defined by Whelan et al. (2001): basic necessities, consumer durables and housing quality. The “social consequences” analyzed in the paper include frequency of contacts with other people and membership in clubs or organizations, while the “psychological consequences” include perception of economic strain and life satisfaction. The focus of the paper is clearly cross-national. On the basis of previous research we know that income poverty and material deprivation generally coincide with lower levels of life satisfaction or social contacts, but the core assumption of the paper is that this relation may be mediated by the societal context in which people live. Consequently, occupying the same relative position on the distribution of income or deprivation index may have different social or psychological consequences for people, depending on the country in which they live. Therefore, one goal of the paper is to investigate the cross-country variation in the patterns of this influence and try to explain it in terms of the characteristics of the societies or welfare systems. The other goal is to assess which specific types of hardship (as defined by the dimensions of poverty examined) that people experience have more serious consequences than others. Specifically, an important question is whether the income poverty or material deprivation is a better predictor of negative social and psychological consequences. The analysis is based on all the eight waves of the European Community Household Panel and covers 13 countries: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, the Netherlands, Portugal, Spain, and the United Kingdom. The main analytical technique employed is multilevel modelling with four levels distinguished: country, household, individual and the wave of the panel. The main focus is on the cross-level interactions between country-level characteristics and multidimensional poverty (defined at the household level), while controlling for other household and individual variables