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The analysis of the effects of income inequalities on the at-risk-of-poverty rate in the European Union

Author

Listed:
  • Maria Berta BELU

    (National Scientific Research Institute for Labour and Social Protection, Romania Bucharest University of Economic Studies, Romania)

  • Silvana BOBÂRNAT (CRIVOI)

    (National Scientific Research Institute for Labour and Social Protection, Romania University of Bucharest, Romania)

  • Maria Denisa VASILESCU

    (National Scientific Research Institute for Labour and Social Protection, Romania Bucharest University of Economic Studies, Romania)

  • Eva MILITARU

    (National Scientific Research Institute for Labour and Social Protection, Romania)

Abstract

Poverty is a challenge for all countries and its eradication is a common goal in the European Union. Our paper analyses the statistical and theoretical relationship between social inequalities and the at-risk-of-poverty rate. For a holistic understanding of the poverty phenomenon in the EU, other variables such as economic growth, social protection expenditure, and the old-age dependency ratio were also included in the analysis. The methodology is based on panel data models. A regression model was built with data for the period 2011-2022, for the 27 EU countries. The econometric model of the at-risk-of-poverty rate highlighted a series of factors, among which the Gini coefficient is one of the most influential. Other important factors were research and development expenditure, social protection expenditure, GDP per capita, the unemployment rate, and the old-age dependency ratio. The cluster analysis grouped the EU countries into three clusters. Understanding the phenomenon of poverty is a prerequisite for alleviating it, generating social solidarity, and rebuilding a fairer society. Our research contributes to the evaluation of the interaction between inequalities and poverty in Romania and the EU.

Suggested Citation

  • Maria Berta BELU & Silvana BOBÂRNAT (CRIVOI) & Maria Denisa VASILESCU & Eva MILITARU, 2024. "The analysis of the effects of income inequalities on the at-risk-of-poverty rate in the European Union," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(1(638), S), pages 57-68, Spring.
    • Handle: RePEc:agr:journl:v:1(638):y:2024:i:1(638):p:57-68
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    References listed on IDEAS

    as
    1. Radoslaw Antczak & Asghar Zaidi, 2016. "Risk of Poverty among Older People in EU Countries," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 14(1), pages 37-46, 05.
    2. Radoslaw Antczak & Asghar Zaidi, 2016. "Risk of Poverty among Older People in EU Countries," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 14(01), pages 37-46, May.
    3. Rati Ram, 2007. "Roles of income and equality in poverty reduction: recent cross-country evidence," Journal of International Development, John Wiley & Sons, Ltd., vol. 19(7), pages 919-926.
    4. repec:ces:ifodic:v:14:y:2016:i:1:p:19204331 is not listed on IDEAS
    5. Bergstrom,Katy Ann, 2020. "The Role of Inequality for Poverty Reduction," Policy Research Working Paper Series 9409, The World Bank.
    6. Rasa Balvociute, 2017. "The Evaluation of EU Countries Population At-Risk-of-Poverty: The Aspect of Income Inequality Changes," Eurasian Studies in Business and Economics, in: Mehmet Huseyin Bilgin & Hakan Danis & Ender Demir & Ugur Can (ed.), Regional Studies on Economic Growth, Financial Economics and Management, pages 307-317, Springer.
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