Reducing poverty and social exclusion in Europe: estimating the marginal effect of income on material deprivation

Abstract

Abstract Advances in measuring poverty in non-monetary terms enable governments to track social progress on ends, the things that societies value doing and being. Using a national-level regression-based empirical strategy, this research demonstrates the magnitude of previously unmeasured policy effects on material deprivation, a non-monetary indicator of poverty. We apply this methodology to a comparative microdata set covering 32 European countries and estimate the average marginal effect of a small universal income increase on material deprivation. We illustrate the impact of the income transfer from various policy angles commonly used when analyzing the poverty reduction effects of social transfers. We show how impacts vary with characteristics such as country and household deprivation levels and the type of social transfers received. The methodology enables an analysis of the redistributive impact of social transfers on non-monetary social outcomes and is also suitable for other non-monetary social outcomes such as housing deprivation and food insecurity.