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Theodore MitrakosBank of Greece
&Panos Tsakloglou
Athens University of Economics and Business & IZA
INEQUALITY, POVERY AND WELFARE IN GREECE:
FROM THE RESTORATION OF DEMOCRACY TO THE CURRENT ECONOMIC CRISIS
Bank of Greece Conference on“Social policies and social cohesion in Greece
in light of the current economic crisis”Athens, 13 May 2011
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Introduction
• Distributional issues almost always in the centre of Greek public discourse.
• In recent years, many empirical investigations• However, many assertions made in the public
discourse, not substantiated, sometimes contradictory and/or not supported by the findings of empirical studies– Greek society characterized by acute class differences /
Greek society dominated by middle classes– The poor are getting poorer and the rich are getting richer– The “new poor”
• Objective of the paper: To provide a detailed picture of structure and inter-temporal trends in inequality and poverty until the current crisis, using all available HBSs
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Data
• Household Budget Surveys (HBSs): Provide detail information on consumption expenditures, disposable income, socio-demographic characteristics of the population, material conditions of living, etc.
• Only seven with national coverage: 1974, 1982, 1988, 1994, 1999, 2004 and 2008
• Large sample; Quality of the data• Consumption of own production (incl. imputed
rent)• Results using both distributions (consumption
expenditure, income). Usually, not different• Comparisons with ECHP / EU-SILC
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Methodology
• Distributions of persons • Equivalence scales• Inequality indices: Gini, Atkinson (ε=0.5 & ε=2.0)Decomposition MLD (+ Theil + Varlog)
• Poverty indices: Poverty Rate, Poverty Gap, FGT2
• Welfare indicator: w=μ(1-I)
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Decile shares
0
5
10
15
20
25
30
1 2 3 4 5 6 7 8 9 10
Decile
Inco
me
shar
e
1974
1982
1988
1994
1999
2004
2008
0
5
10
15
20
25
30
1 2 3 4 5 6 7 8 9 10
Decile
Cons
. exp
end.
sha
re
1974
1982
1988
1994
1999
2004
2008
Consumption Expenditure Income
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Inequality changes in decile shares
-4,0
-3,0
-2,0
-1,0
0,0
1,0
2,0
1974-82 1982-88 1988-94 1994-99 1999-2004 2004-08
-6,0
-4,0
-2,0
0,0
2,0
1974-82 1982-88 1988-94 1994-99 1999-2004 2004-08
Consumption Expenditure
Income
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Lorenz curves
0
10
20
30
40
50
60
70
80
90
100
0 10 20 30 40 50 60 70 80 90 100
Population share
Con
sum
ptio
n sh
are
1974198219881994199920042008
0
10
20
30
40
50
60
70
80
90
100
0 10 20 30 40 50 60 70 80 90 100
Population share
Inco
me
shar
e
1974198219881994199920042008
Consumption Expenditure Income
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Lorenz dominance and Lorenz curve differences
-1,0
0,0
1,0
2,0
3,0
4,0
5,0
6,0
0 10 20 30 40 50 60 70 80 90 100
1974
1982
1988
1994
1999
2004
2008
1982 +
1988 + =
1994 + xx xx
1999 + + + +
2004 + + + + +
2008 + + + + + +
1974 1982 1988 1994 1999 2004
-1,00
0,00
1,00
2,00
3,00
4,00
5,00
6,00
7,00
8,00
0 10 20 30 40 50 60 70 80 90 100
1974
1982
1988
1994
1999
2004
2008
1982 +
1988 + =
1994 + = xx
1999 + = x -
2004 + + + + +
2008 + + + + + xx
1974 1982 1988 1994 1999 2004
Consumption Expenditure
Income
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Inter-temporal trends in inequality indices1974-2008 (HBSs)
50
55
60
65
70
75
80
85
90
95
100
1974 1982 1988 1994 1999 2004 2008
Gini Atkinson (ε=0.5) Atkinson (ε=2.0)
50
55
60
65
70
75
80
85
90
95
100
1974 1982 1988 1994 1999 2004 2008
Gini Atkinson (ε=0.5) Atkinson (ε=2.0)
Consumption Expenditure Income
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Inter-temporal trends in inequalityGini Index, 1994-2009 (HBSs and ECHP / EU-
SILC) Distribution of disposable income
31,0
33,034,0 33,4
35,0
34,0
34,7
32,5
28
29
30
31
32
33
34
35
36
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
ECHP / EU-SILC
HBS Disposable income
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Structure of inequalityShare of “Between groups” component, Mean Log
Deviation Distribution of consumption expenditure
Grouping criterion Groups 1974 1982 1988 1994 1999 2004 2008
Region 11 14.0 8.2 7.4 6.9 7.2 6.2 6.2
Locality 4 13.3 9.8 10.2 6.5 10.0 6.8 7.1
HH type 9 3.7 5.6 6.8 6.4 7.2 7.0 5.8
Occupational group HH Head 9 17.0 12.5 13.5 11.5 13.8 15.8 13.9
Educational group HH Head 5 25.2 17.7 20.8 21.0 19.9 21.1 24.4
Multivariate decomposition 109 33.3 26.4 30.5 28.8 32.8 29.4 32.9
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Trend decomposition of inequality (1974-2008)
Consumption expend. Income Grouping criterion Contribution of:
Theil Mean
log dev. Varlog Theil
Mean log dev.
Varlog
Locality Changes “within groups” 74.7 74.8 72.8 82.4 82.4 73.0 Changes in population shares 6.6 5.9 9.3 -0.4 -0.3 2.2 Changes “between groups” 18.7 19.2 18.0 17.9 17.9 24.8
HH type Changes “within groups” 102.9 103.9 101.8 102.8 101.7 96.9 Changes in population shares -6.3 -6.7 -9.6 -6.1 -5.4 -4.4 Changes “between groups” 3.4 2.7 7.7 3.3 3.6 7.4 Occupational group of HH Head Changes “within groups” 88.0 90.9 91.9 80.8 88.3 93.9 Changes in population shares -8.3 -12.5 -12.2 -10.6 -15.9 -19.4 Changes “between groups” 20.2 21.6 20.3 29.8 27.5 25.6 Educational group of HH Head Changes “within groups” 64.4 67.1 65.8 70.6 70.4 67.5 Changes in population shares 20.0 -7.5 -7.0 6.7 -18.6 -21.3 Changes “between groups” 15.5 40.4 41.2 22.7 48.2 53.8
Proportional change in inequality -36.6 -38.1 -39.2 -45.6 -45.6 -46.7
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Inter-temporal trends in poverty indices1974-2008 (HBSs) – relative poverty lines
0
20
40
60
80
100
1974 1982 1988 1994 1999 2004 2008
Poverty rate Poverty gap Foster et al (a=2)
0
20
40
60
80
100
1974 1982 1988 1994 1999 2004 2008
Poverty rate Poverty gap Foster et al (a=2)
Consumption Expenditure Income
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Inter-temporal trends in poverty indices1974-2008 (HBSs) – fixed (1999) poverty line
Consumption Expenditure Income
0
20
40
60
80
100
1974 1982 1988 1994 1999 2004 2008
Poverty rate Poverty gap Foster et al (a=2)
0
20
40
60
80
100
1974 1982 1988 1994 1999 2004 2008
Poverty rate Poverty gap Foster et al (a=2)
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Inter-temporal trends in relative poverty Poverty rate, 1994-2009 (HBSs and ECHP / EU-
SILC)Distribution of disposable income
16,8
20,021,0
20,1
22,021,3
20,0 19,8
15
16
17
18
19
20
21
22
23
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
ECHP-EUSILC
HBS Disposable income
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Poverty risk groups(consumption expenditure, FGT2)
Consumption expenditure Income
Population Group 1974 1982 1988 1994 1999 2004 2008 1974 1982 1988 1994 1999 2004 2008
Members of rural HHs 1.92 1.75 1.86 1.88 2.09 2.19 2.18 1.67 1.63 1.82 2.15 1.77 1.73 1.56
Persons aged 65+ living alone
4.65 5.28 4.08 3.57 3.19 1.80 2.93 4.36 5.38 3.42 2.92 2.06 1.38 1.39
Childless couples (at least one 65+)
2.11 2.61 2.79 2.31 1.78 2.01 2.31 2.42 2.86 2.27 2.10 1.74 1.09 0.62
Couple with 3+ children 1.16 0.90 1.22 1.00 1.53 0.69 1.65 1.50 0.72 1.12 1.93 2.43 2.07 3.64
Members of mono-parental HHs
0.88 0.67 0.82 0.62 0.68 0.77 0.95 1.38 0.64 1.16 1.44 1.73 3.03 1.47
Members of HHs headed by farmers
1.74 1.71 1.54 1.32 2.15 2.01 2.56 1.31 1.26 1.52 1.50 1.54 2.24 2.91
Members of HHs headed by unemployed
0.73 1.91 1.09 1.92 1.84 1.04 1.64 5.91 4.01 3.80 2.22 2.65 1.39 3.22
Members of HHs headed by pensioners
1.84 1.84 1.75 1.84 1.49 1.59 1.54 1.93 2.37 1.49 1.71 1.26 0.87 0.49
Members of HHs headed by persons with no prim. educ.
2.36 2.38 2.77 2.73 3.41 2.93 4.22 2.11 2.14 2.60 2.42 2.60 1.79 1.64
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Contribution to aggregate poverty (consumption expenditure, FGT2, 1974-2008)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1974 1982 1988 1994 1999 2004 2008
Urban areas Semi-urban areas Rural areas
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1974 1982 1988 1994 1999 2004 2008
One or two (below 65) One or two (at least one 65+)
Couple with children below 18 Other
0%
20%
40%
60%
80%
100%
1974 1982 1988 1994 1999 2004 2008
Farmer or agric. W orker Self-employed (non-agr.)
Manual employee non-agr. Retired
Unemployed Other
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1974 1982 1988 1994 1999 2004 2008
Tertiary completed Secondary completed
Primary completed Primary not completed
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Logit estimates of poverty risk(odds ratios, consumption expenditure)
1974 1982 1988 1994 1999 2004 2008 LOCALITY Municipalities > 100.000 0.43 ** 0.57 ** 0.80 * 0.69 ** 0.56 ** 0.82 ** 0.96 Semi-rural areas 1.17 1.26 1.27 1.71 ** 1.21 ** 0.92 1.52 ** Rural areas 1.65 ** 1.35 ** 1.73 ** 1.36 ** 1.55 ** 1.59 ** 1.73 ** HH TYPE One person 65+ 2.29 ** 1.71 1.27 0.62 0.80 1.32 1.03 Ένα άτομο 65 ετών και άνω 3.14 ** 4.65 ** 2.76 ** 2.15 ** 2.83 ** 2.62 ** 2.33 ** Childless couple (none 65+) 0.82 1.20 0.76 0.84 0.95 0.83 1.16 Childless couple (at least one 65+) 2.04 ** 3.17 ** 2.59 ** 1.79 ** 1.96 ** 2.34 ** 2.51 ** Couple with 1 child 0.92 1.05 0.75 0.78 1.09 0.79 1.19 Couple with 3+ children 1.89 ** 1.67 ** 1.50 * 1.51 * 1.65 ** 1.84 ** 2.26 ** Monoparental HH 0.91 1.20 0.71 0.78 1.62 * 1.68 * 1.84 Other 1.36 ** 1.65 ** 1.18 1.11 1.28 ** 1.61 ** 1.42 ** OCCUPATIONAL GROUP OF HH HEAD Employer (non-agric.) 0.14 ** 0.24 ** 0.55 0.20 ** 0.13 ** 0.05 ** 0.13 ** Professional (non-agric.) 0.85 ** 2.08 3.33 * 0.59 ** 0.33 ** 0.09 ** 0.26 ** Self-employed (non-agric.) 0.96 0.87 1.17 0.69 * 0.56 ** 0.40 ** 0.33 ** Farmer 1.52 ** 1.42 ** 1.62 ** 0.81 0.90 0.82 * 0.86 Employee (non-agric.) 0.73 0.66 * 0.81 0.50 ** 0.21 ** 0.29 ** 0.31 ** Unemployed 1.86 * 2.18 * 2.54 ** 2.16 ** 1.46 ** 0.95 1.38 Pensioner 1.80 ** 1.47 ** 1.61 ** 1.05 0.68 ** 0.57 ** 0.61 ** Other 1.83 ** 1.28 1.95 ** 1.10 0.64 ** 0.56 ** 0.89 EDUCATIONAL LEVEL OF HH HEAD University 0.06 ** 0.16 ** 0.09 ** 0.18 ** 0.38 ** 0.32 ** 0.23 ** Upper secondary 0.26 ** 0.30 ** 0.40 ** 0.55 ** 0.56 ** 0.36 ** Lower secondary 0.50 **
0.40 ** 0.77 * 0.60 ** 0.89 0.90 0.78 *
Primary not completed 1.73 ** 1.51 ** 1.68 ** 2.15 ** 1.95 ** 1.97 ** 2.31 **
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Trend decomposition of poverty (, FGT2, 1974-2008)
Consumption expend. Income
Grouping criterion Within
groups
poverty
Population
shares
Within
groups
poverty
Population
shares
Locality 70.3 29.7 84.7 15.3
HH type 105.8 -5.8 101.8 -1.8
Occupational group HH Head 89.6 10.4 103.5 -3.5
Educational group HH Head 17.4 82.6 55.5 44.5
Percentage change in poverty -57.5 -69.0
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Inter-temporal trends in welfare indices1974-2008 (HBSs)
Consumption Expenditure Income
100
50
100
150
200
250
300
1974 1982 1988 1994 1999 2004 2008
Gini Atkinson (A, ε=0.5) Atkinson (Α, ε=2.0)
100
50
100
150
200
250
300
1974 1982 1988 1994 1999 2004 2008
Gini Atkinson (A, ε=0.5) Atkinson (Α, ε=2.0)
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International comparisons: Inequality
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International comparisons: poverty
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Qualifications
• Population groups under-represented in the HBS samples (homeless, institutionalized, immigrants)
• Changes in indirect taxes (only consumption expenditure)
• No inclusion of capital gains (only income)• No inclusion of public transfers in-kind
(education, health care, etc)
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Qualifications
• Population groups under-represented in the HBS samples (homeless, institutionalized, immigrants)
• Changes in indirect taxes (only consumption expenditure)
• No inclusion of capital gains (only income)• No inclusion of public transfers in-kind
(education, health care, etc)
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Conclusions
• Inter-temporal trends– Inequality– Poverty (in relative terms)– Poverty (in absolute terms)– Welfare
• Structure of inequality• Poverty risk groups• Structure of poverty• International comparisons• Rather “positive” results• And, then, the crisis arrived!