Persistent Deprivation in the European Union. EPAG Working Paper 23, 1996

In recent years, the use of direct measures of deprivation alongside current income has shown that the latter provide a rather imperfect measure of permanent income or command over resources. Research has shown though that the relationship between income and deprivation increases if panel measures of income are used to highlight persistent income poverty. In this paper we confirm this relationship before moving on to the analysis of panel measures of deprivation and the relationship between persistent income and persistent deprivation poverty measures. Our analysis shows that that while there is a clear and systematic relationship between persistent poverty and persistent deprivation, the degree of overlap is far from perfect. Over and above the impact of persistent income poverty, a variety of resource related variables such as education, labour market experience and social class, and need related variables such as marital status and household structure, allow a significant degree of predictability in relation to the risk of exposure to deprivation. Furthermore, the impact of persistent deprivation on the experience of extreme economic strain is only partially mediated by persistent income poverty. In our conclusion we stress the importance for both analytic and policy purposes of not allowing a legitimate concern with income and deprivation dynamics to obscure the extent to which life-chances continues to be structured by a set of influences that are shaped by larger socio-economic and political forces