Operationalizing De-commodification and De-familization Outcomes via the Relative Poverty Approach: An Application to Western European Countries

Abstract

This article develops an approach with which to operationalise the outcomes of de-commodification and de-familisation processes. Since the de-commodification and de-familisation concepts share an emphasis on ‘a socially acceptable standard of living for individuals’ with the notion of relative poverty, the income-poverty indicator has been adopted to develop pertinent national rates. In particular, since de-commodification outcomes concern people with a socially acceptable standard of living independently of sale of their labour power, the national proportions of individuals with an equivalised disposable income above the poverty threshold who have stopped working have been accounted for. On the other hand, given that de-familisation outcomes regard individuals with a socially acceptable standard of living aside from family relationships, the national percentages of persons who actually live alone, or simulated as living alone, with an equivalised disposable income above the poverty threshold have been considered. Moreover, exploiting the equivalised disposable income computation, pertinent micro-simulations are developed to capture the role of the state and the family in de-commodification outcomes, and the contribution of the market and the state to de-familisation outcomes. On the basis of the European Union Statistics on Income and Living Conditions, an empirical application of this approach is then provided. Specifically, data for 16 European countries were used to compute the above-mentioned national rates. Furthermore, we checked whether our outcome figures exhibited any correspondence with the country-groups deriving from the classic welfare regime typologies or more in general with the measures resulting from the social policy structure.

Appendices

Appendix 1: Calculation Procedures

1.1 Calculating the ‘Not-At-Risk-of-Poverty Rate (After Social Transfers)’

As anticipated in Sect. 4, to quantify de-commodification and de-familisation outcomes, we inverted the ‘at-risk-of-poverty rate (after social transfers)’ prescribed by Eurostat. Accordingly, we performed the following steps for each country considered: (1) we calculated the total disposable income of each household by adding together the personal incomes received by all of the household members, plus income received at household level (after tax and other deductions); (2) in order to reflect differences in a household’s size and composition, we divided the total household income by the number of ‘equivalent adults’ using the modified OECD scale (see Sect. 3) and attributed the resulting equivalised disposable income to each family member; (3) we set the ‘at-risk-of-poverty threshold’ at 60 % of the national median equivalised disposable income; (4) we identified the ‘not-at-risk-of-poverty rate’ as the share of people with an equivalised income above the poverty threshold. We then calculated this rate for each group indicated in Sect. 4, that is, unemployed persons, retirees (both considered in that condition for the entire income reference period), single young persons, single women, single mothers, and single elderly persons.

1.2 Micro-Simulations Performed to Quantify the De-commodification Outcome in Consequence of State Intervention Alone

As said in Sect. 4, we simulated that retired and unemployed people leave their households to live alone. These exercises were carried out for the two groups separately.

Starting with retirees, we selected from the sample of each country all households with one or more persons in this condition. These households were then split to form new ones: those composed of one single retired person, and those composed of the remaining members of the split families. On the basis of this new household structure, we re-calculated the equivalised disposable income and the ‘not-at-risk-of-poverty rate’ as specified above.

For example, if a household consisted of two individuals of which one was retired, through the simulation exercise we split it into two single households. The disposable income of each individual was at this point composed of her/his personal income plus a (equal) proportional part of the previous (and actual) household income. Clearly, in this case the equivalised disposable income of the two single households coincided with the disposable income of each individual because the equivalized household size was equal to 1.0. Obviously, this logic must be applied to each family including retired people to produce, as said, a new equivalised disposable income distributions and a new not-at-risk-of-poverty rate (after social transfers).

Clearly, the procedure was the same for unemployed persons. An example may however help to clarify our exercises. Suppose that a family is composed of two employed and two unemployed persons. We split this family into three families. The first one consists of the two employed members whose disposable incomes coincide with the sum of the two personal job incomes plus one half of the household income of the split household. To equivalize this disposable income, the denominator will be 1.5. The other two families are obviously two single households respectively composed of the two unemployed persons. As in the previous example of retirees, their respective personal incomes—entirely made up of public transfers—plus the proportion of the previous household income must be divided by 1.0.

1.3 Micro-Simulations Performed to Quantify the De-familisation Outcome in Consequence of Leaving the Household

These micro-simulations were performed by adopting the same logic as described in the previous section. Therefore, it is not necessary to re-describe the steps followed. However, an example must be provided to prevent misunderstandings. Let us consider the case where the family structure implies the construction of a single-women household or a single-mother household. If a household is composed of a couple of parents plus two children, the first one aged 13 and the second one aged 25, we split it into two new families. The first one consists of the father plus the oldest child. The second one consists of the mother plus the other child. This means that the age of the youngest child implies that the mother has left her family with one child and become a single-mother. Otherwise, if both children were aged, for instance, over 25, the mother would have formed a new single-household, and the two children would have remained with the father. In other words, in order to discriminate new single-mothers from new single-women, one must consider whether or not the actual family includes dependent children. Although most studies consider as single-parent families those with children aged under 18 and headed by a sole parent, we extended the children’s age to 24 on the condition that these children were not employed. This age extension was done to increase the number of observations.

Appendix 2: Selected Figures Deriving from 2010 to 12 EU-SILC Waves

See Tables 4, 5, 6, 7, 8 and 9.

Table 4 Not-at-risk-of-poverty rate for retired people

Table 5 Not-at-risk-of-poverty rate for unemployed

Table 6 Not-at-risk-of-poverty rate for young people (aged 16–34)

Table 7 Not-at-risk-of-poverty rate for women (aged 35–64)

Table 8 Not-at-risk-of-poverty rate for single mothers

Table 9 Not-at-risk-of-poverty rate for old people (aged 65+)