The risk of clustering of deprivations in Spain: a tale of two crises

Purpose - The At Risk of Poverty or Social Exclusion (AROPE) rate is a key indicator for monitoring poverty in Europe. However, it is not sensitive to the degree to which individuals face multiple deprivations simultaneously. This paper aims to fill this gap by studying the relationship between the three dimensions of the AROPE rate at the lower tail of their joint distribution in Spain in the period 2009–2022. Design/methodology/approach - To capture how the different dimensions of poverty are related at the lower tail of their joint distribution, this paper proposes a multivariate left tail concentration function based on copulas. This function quantifies lower tail dependence at a finite scale, which, for practical purposes, is more suitable than estimating asymptotic measures, and can be represented in a 2D graph, facilitating interpretation and temporal comparisons. This function also provides information on overall dependence, as it is closely related to the Blomqvist’s beta. Findings - There is a considerable risk of clustering of deprivations in Spain, with low positions in one poverty dimension extending to others. This risk increased after the Great Recession but did not decrease with the economic recovery that followed. The crisis linked to COVID-19 did not have a significant impact on the risk of clustering of deprivations. Lower tail dependence provides new valuable insights on the dependence structure of poverty dimensions beyond the analyses based on overall dependence. Originality/value - This paper provides new theoretical results and a pioneering application of multivariate lower tail dependence measures in welfare economics using non-parametric methods.