THE WORKING POOR: TOO LOW WAGE OR TOO MANY KIDS?
AbstractThe “in-work at-risk-of-poverty rate” is a European indicator that is based on a series of assumptions rarely questioned although with particularly strong consequences for the calculation of the in-work poverty risk and for the design of policies to combat it. The purpose of this paper is to show the volatility in the measured proportions of working poor according to different methodological choices in terms of the unit of analysis, the measure of income and the population of workers. In a country-specific econometric analysis we show the differential impact of individual characteristics, the household structure and employment-related factors on the in-work poverty risk according to whether individual or equivalised household income is used to measure this risk. Our analysis covers 8 European countries and is based on 2007 data from the European Statistics on Income and Living Conditions.