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Nowcasting Indicators of Poverty Risk in the European Union: A Microsimulation Approach

Navicke, J and Rastrigina, O and Sutherland, H (2014) 'Nowcasting Indicators of Poverty Risk in the European Union: A Microsimulation Approach.' Social Indicators Research, 119 (1). 101 - 119. ISSN 0303-8300

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The at-risk-of-poverty rate is one of the three indicators used for monitoring progress towards the Europe 2020 poverty and social exclusion reduction target. Timeliness of this indicator is critical for monitoring the effectiveness of policies. However, due to complicated nature of the European Union Statistics on Income and Living Conditions (EU-SILC) poverty risk estimates are published with a 2–3 years delay. This paper presents a method that can be used to estimate (“nowcast”) the current at-risk-of-poverty rate for the European Union (EU) countries based on EU-SILC microdata from a previous period. The EU tax-benefit microsimulation model EUROMOD is used for this purpose in combination with up to date macro-level statistics. The method is validated by using EU-SILC data for 2007 incomes to estimate at-risk-of-poverty rates for 2008–2012 and to compare the predictions with actual EU-SILC and other external statistics. The method is tested on eight EU countries which are among those experiencing the most volatile economic conditions within the period: Estonia, Greece, Spain, Italy, Latvia, Lithuania, Portugal and Romania.

Item Type: Article
Subjects: H Social Sciences > H Social Sciences (General)
Divisions: Faculty of Social Sciences > Institute for Social and Economic Research
Depositing User: Jim Jamieson
Date Deposited: 02 Apr 2014 14:35
Last Modified: 07 Apr 2021 10:15

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