One fifth of Europe’s children are living in poverty

Posted on Monday, 11 July 2022
Child Benefit

Almost 15.8 million children in the EU-27 are at risk of poverty, representing around one fifth of Europe’s children. No child should grow up in poverty in the EU and we are consistently failing to achieve this outcome.  This is one of the findings of ‘Europe After Covid: Reversal or Renewal’ the fourteenth publication in our European Research Series.  The dangers of ongoing high levels of child poverty, social exclusion and deprivation are very serious. Poverty tends to persist over time and be transmitted across generations, which means that children born into poverty bear a higher risk of poverty in adult life than the average population.  Almost 70 per cent of adults in the EU with a low ability to make ends meet grew up in a household in the same situation.

Access to affordable quality early childhood education and care, along with well-designed work-life balance policies, is key to improving children's life prospects, while at the same time supporting the labour market participation of their parents, notably mothers. The ability to tackle the challenges of child poverty and youth exclusion will be decisive in Europe’s capacity to guarantee a long-term future to its citizens.

‘Europe After Covid: Reversal or Renewal?’ is the fourteenth publication in Social Justice Ireland’s European Research Series.   It analyses performance across the EU in areas such as poverty and inequality, employment, access to key public services and taxation. 

Key findings - children

  • The rate of children at risk of poverty in the EU-27 was 19.5 per cent in 2020, almost 15.8 million children.  This means around one fifth of Europe’s children are living in situations of income poverty.  There are large divergences between countries and the proportion varies considerably across the EU.
  • The child poverty rates were highest in Romania (30.1 per cent), Bulgaria (28.3 per cent), Spain (27.4 per cent), Italy (25.1 per cent) and Luxembourg (23.1 per cent) followed by Greece and Malta.
  • The child poverty rates were lowest in Hungary, Denmark, and Slovenia (all between 9.5 and 10.5 per cent). Again,
  • The greatest improvements in risk of poverty amongst children (2019-2020) occurred in Belgium, followed by Sweden and Lithuania.
  • The greatest disimprovements in risk of poverty amongst children (2019-2020) occurred in the Germany, Austria and Ireland.
  • The countries where social transfers had the strongest impact on reducing poverty among children were Finland, Hungary, Denmark, Ireland, UK, Poland, Germany, Austria and Slovenia.
  • Childhood severe material deprivation stood at 5.6 per cent in 2020.  This means that almost 6.9 million children in the EU-27 were experiencing a severe lack of resources.
  • Poverty particularly affects families where parents could not benefit from an extensive education.  Education, which is a strong determinant of poverty or social exclusion for adults, also strongly influences whether children are at risk of poverty or social exclusion. 
  • Children were strongly affected by the economic crisis and the rate of poverty or social exclusion they experience continues to be higher than for the general population.
  • A range of interventions are necessary to address this situation including access to affordable quality early childhood education and care, along with well-designed work-life balance policies.
  • While some improvement has occurred in the situation of children over recent years, the recent social and economic fallout from the Covid-19 pandemic has seen increasing numbers of children affected by poverty and social exclusion.

Social Indicators
The social indicators examined in this report suggest little improvement since 2010 for very many people living in Europe, with marked dis-improvements for some groups such as older people and the working poor in several countries particularly evident since the beginning of the pandemic. The position of children while improved somewhat since 2010, continues to be strikingly negative for very many children with potentially very serious long-term consequences including those directly linked to Covid-19.

Poverty, social exclusion and income inequality

  • In 2020, the risk of poverty rate in the EU-27 was 17.1 per cent (over 75.2 million people), an increase of 3.5 million people since 2010.
  • The average EU-27 rate of severe material deprivation was 6.3 per cent in 2020, representing approximately 27.6 million people.

Older people

  • The 2020 poverty rate for those aged 65+ in the EU-27 was 17.3 per cent or almost 15.4 million people.  Of concern, this rate has been increasing since 2014 with approximately 4.8 million more older people are experiencing income poverty in Europe in 2020 than in 2014.
  • The average severe material deprivation rate for older people was 4.4 per cent representing approximately 4.9 million people aged 65+ (EU-27) in 2020.  The rate is higher for older women than older men and many more women are affected.

Working Poor

  • In 2020, 9.4 per cent of employed people (aged 18+) in the EU-27 were living in poverty.  This means that 20.5 million employed people in the EU live in poverty.  Some groups are particularly affected (including younger people, people with lower education levels, and non-standard workers, poor households with children including lone parents).

Financial distress

  • Financial distress (defined as the need to draw on savings or to run into debt to cover current expenditures) is being experienced most by the lowest income quartile (or lowest 25 per cent) and also by the second quartile (lowest 50 per cent).  In February 2022, it was recorded at 23.3 per cent for the lowest-income quartile and at 14.2 for the second quartile.

Unemployment

  • The unemployment rate in the EU-27 in 2021 was 7 per cent (representing 14.95 million people).  The countries with the highest rates in 2021 were Spain (14.8), Greece and Italy.
  • Long-term unemployment rate stood at 2.8 per cent in 2021, affecting about 3.6 million people.  Of this cohort, 3.1 million were unemployed for 2 years of more. 
  • 3 million young people aged under 25 were unemployed in 2021 (the countries with the highest rates are Greece, Spain and Italy).

Health

  • The Covid-19 pandemic has been termed the worst to effect Europe in a century, resulting in a marked fall in life expectancy in all but 4 EU Member States between 2019 and 2020.
  • Data relating to 2020 and 2021 suggests the pandemic has seen a rise in perceptions of unmet need for health care in some countries with the highest unmet need amongst those who earn least.
  • Pre-existing health inequalities have been both exposed and deepened during the Covid-19 pandemic, with vulnerable social groups disproportionately negatively affected.

Social Justice Ireland recommendations

The scale of the task at hand is considerable, against the backdrop of a decade of uneven progress leading up to the current unprecedented crisis.  However, if Europe is to succeed, a strong response based on the European Social Model is required.  This means protecting people across the lifecycle, young and old, men and women, those with an income and those with no incomes.  Those people were already in a difficult situation before the pandemic and were among the hardest hit.  Now, they face rising inflation which is further eroding their standard of living.  Unlike in 2008, they must be protected if Europe is to achieve a real and lasting social and economic recovery.  In the wake of a devastating global pandemic and the outbreak of war and humanitarian crisis on the continent of Europe, it is now clearer than ever that alternatives are needed. We make the following recommendations aimed at EU Leaders and EU Institutions:

Ensure Greater Coherence of European Policy by acting on the von der Leyen Commission’s recent decision to integrate the UN Sustainable Development Goals and the European Pillar of Social Rights into the economic processes of the European Semester. For example, the priorities of Annual Growth Surveys should provide greater focus on long-term social objectives, and on building adequate, effective social systems that include both investment and protection dimensions and are better aligned to the EU Social Investment Package and the new European Recovery Fund. This could be facilitated by:

  • Making the European Pillar of Social Rights enforceable through legislative initiatives and turning it into a strategic tool to influence EU macroeconomic governance.
  • Supporting efforts to promote growth and jobs while meeting deficit reduction targets in the medium rather than the short term.
  • Taking greater account of social impacts when making Country Specific Recommendations, especially those requiring fiscal consolidation measures.
  • Making country-specific recommendations that seek to achieve reductions in poverty and unemployment where rates are high or rising.

Address inappropriate EU governance structures that prohibit or inhibit legitimate investment by national government.

Advance proposals for a guarantee of an adequate minimum income or social floor in the EU under a framework directive, and for minimum standards on other social protection measures building upon the Directive on Adequate Minimum Wages. This should include access to child care, access to education and healthcare across member states and other measures supportive of the implementation of the European Pillar of Social Rights.

Monitor and Address poverty amongst sub-groups such as children, young people, older people and working poor.  Child poverty is such a serious issue that it requires further action as does the issue of young people neither in employed nor in education (NEETS). Monitor implementation of the Commission’s Recommendation on Investing in Children through a strengthened process and work with member states with high levels of child poverty to help them access and deploy structural funds to address the issue. The ageing of Europe’s population, the fact that there are many more women than men in this group, and the very great differentials between countries make poverty amongst older people (especially in some countries) an issue that requires more attention now and in the future. The situation of those who work and still live in poverty needs to be tackled as a matter of urgency.

Focus on Youth Unemployment: Youth unemployment continues to be a serious problem despite Youth Guarantee schemes and there is a need to recognise that young people experiencing multiple disadvantage are likely to need support over a lengthy period.

Support Developments in the Social Economy: Leadership and support from the EU for social initiatives would benefit both people in need of support (through health and social care programmes) and societies generally. This would be consistent with the Social Investment Package and could provide valuable employment opportunities for people who are long-term unemployed.

Improve Representation: EU policy-making must engage meaningfully with stakeholders representing poorer people and those most at risk of exclusion.

Structural Funds: Structural funds must be of a sufficient scale to make an impact and should be given greater priority so as to ensure significant progress is made in bridging the gap between the economic and social dimensions of policy and in promoting a social investment approach to public policies where this is absent or insufficient.

Adopt a Human Rights Strategy to prevent the violation of the human rights of Europe’s population. This is particularly pressing given the reality of conflict and humanitarian crisis has returned to the continent of Europe with the war in Ukraine.