Being Working Poor or Feeling Working Poor? The Role of Work Intensity and Job Stability for Subjective Poverty

Abstract

Low work intensity and high job instability are crucial micro-determinants of in-work poverty. Importantly, they might also affect subjective poverty in households that are above the poverty threshold. We contribute to the literature by studying the relationship between subjective and objective in-work poverty and how this relationship is affected by household members’ job characteristics. We use data from the 2014 wave of the Italian module of the EU-SILC survey. Italy is an interesting case as—similarly to other Southern European countries—the share of individuals and households reporting subjective hardship is strikingly high compared to the levels reported in other EU areas. We find no statistically significant differences in the association between subjective poverty and different degrees of objective poverty by different levels of work intensity. Conversely, subjective poverty is positively associated with the instability of household members’ job contracts. We argue that policies aimed at increasing work intensity rather than work stability might not help to reduce subjective poverty as well as its (negative) spillover effects on other life domains—such as well-being, adequate levels of consumption, and social integration.

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Fig. 1

Source: EU-SILC 2014, Italian module. Authors’ calculations (weighted)

Fig. 2

Source: EU-SILC 2014, Italian module. Authors’ calculations (weighted)

Fig. 3

Source: EU-SILC 2014, Italian module. Authors’ calculations, weighted

Notes

  1. 1.

    The literature also identifies low wages as a cause of in-work poverty. However, we do not consider this aspect here because low wages are associated with low levels of household work intensity and less stable jobs (Eurofound 2017), that is the employment characteristics that we consider directly in our analysis. Moreover, hourly wages are not available in EU-SILC.

  2. 2.

    Law196/1997: 24th June 1997, n. 196 "Norme in materia di promozione dell'occupazione" Published on Gazzetta Ufficiale n. 154, 4th July 1997—Supplemento Ordinario n. 136. Legislative Decree 368/2001: 6th September 2001, n. 368 "Attuazione della direttiva 1999/70/CE relativa all'accordo quadro sul lavoro a tempo determinato concluso dall'UNICE, dal CEEP e dal CES" published on Gazzetta Ufficiale n. 235, 9th October 2001. Law 30/2003: 14th February 2003, n. 30 "Delega al Governo in materia di occupazione e mercato del lavoro" published on Gazzetta Ufficiale n. 47, 26th February 2003.

  3. 3.

    Law 92/2012: 28th June 2012, n. 92 “Disposizioni in materia di riforma del mercato del lavoro in una prospettiva di crescita” published on Gazzetta Ufficiale Serie Generale n.153, 3rd July 2012, Suppl. Ordinario n. 136. Law 183/2014: 10th December 2014, n. 183 “Deleghe al Governo in materia di riforma degli ammortizzatori sociali, dei servizi per il lavoro e delle politiche attive, nonché in materia di riordino della disciplina dei rapporti di lavoro e dell'attività ispettiva e di tutela e conciliazione delle esigenze di cura, di vita e di lavoro” published on Gazzetta Ufficiale Serie Generale n.290, 15th December 2014.

  4. 4.

    Comparative research on Western countries generally adopts a relative approach to objective monetary poverty, defining poverty as the inability to achieve the minimum acceptable standard of living. This latter is computed by adopting specific thresholds (usually 50%, 60%, or 66% of mean or median income). Absolute measures, instead, refer to the minimum level of income that is necessary to maintain basic living standards (food, shelter, and housing). Households are considered poor when their income lies below the threshold adopted.

  5. 5.

    An alternative indicator used in the literature relies on a subjective assessment of the quantity of monetary resources needed to ensure a minimum living standard for the household, implicitly defining a subjective poverty threshold. For a detailed discussion see Van Praag and Ferrer-i-Carbonell (2008).

  6. 6.

    Moreover, there is no general agreement on whether the composite indicator of subjective financial stress proposed by Eurostat can be considered fully subjective (Blekesaune 2013). As an example, Fahey (2007) defines objective financial problems as being in arrears on bills.

  7. 7.

    The two adult workers can be a couple or one parent and one adult–child.

  8. 8.

    As a robustness check, we considered a different dichotomization, distinguishing between those who have difficulties and those who do not. This classification does not change the results.

  9. 9.

    The modified OECD equivalence scale assigns a value of 1 to the household head, of 0.5 to each additional adult member and of 0.3 to each individuals younger than 14.

  10. 10.

    Alternative definitions of work intensity considering the number of months worked in the year can be found in the literature. See, for example, Berloffa et al. (2015) or Ayllón and Gábos (2017).

  11. 11.

    As a robustness check, we estimated the models by removing these cases and the results are unchanged (not showed, available upon request).

  12. 12.

    The measure we use is implicitly a relative one, as the maximum number of workers in the household is two by construction.

  13. 13.

    Only 71 households have two out of two workers are temporary. As a robustness check, we estimated the models by removing these cases and the results do not change (results not showed, available upon request).

  14. 14.

    The predicted average probabilities estimated from Models 2 and Models 3 in Tables A1, A2, and A3 in the Appendix are highly consistent with those shown in Figs. 1, 2, and 3 respectively.

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Appendix

Appendix

See Tables A1, A2 and A3.

Table A1 Logistic regression models for the likelihood of subjective (in-work) poverty by different levels of objective (in-work) poverty at different levels of work intensity
Table A2 Logistic regression models for the likelihood of subjective (in-work) poverty by different levels of objective (in-work) poverty at different levels of job instability (as share of workers with unstable job)
Table A3 Logistic regression models for the likelihood of subjective (in-work) poverty by different levels of objective (in-work) poverty at different levels of job instability (as share of labour income from temporary jobs)

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Filandri, M., Pasqua, S. & Struffolino, E. Being Working Poor or Feeling Working Poor? The Role of Work Intensity and Job Stability for Subjective Poverty. Soc Indic Res 147, 781–803 (2020). https://doi.org/10.1007/s11205-019-02174-0

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Keywords

  • In-work poverty
  • Work intensity
  • Job instability
  • Subjective poverty
  • Italy