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Saturday, 27.04.2024, 00:03
Large share Latvian population is still at risk of poverty
Due to the growth in the average income of population in 20132, at-risk-of-poverty threshold1 also increased, reaching EUR 260 per month (in 2012 – EUR 233). In 2013, 21.2% of the Latvian population were subjected to the risk of poverty, which is 1.8 percentage points more than in 2012. Growth in the share of population at risk of poverty was most significantly affected by the fact that growth in income from labour was more rapid than growth in income from pensions, allowance and other payments from the budget3. The average monthly wages and salaries increased by EUR 28 or 5.7%, while monthly old-age pension grew on average by only EUR 2.67 or 1%.
The share of people aged 65 and over subjected to the risk of poverty increased significantly in 2013 (from 17.6% in 2012 to 27.6% in 2013). In turn, the share of children at risk of poverty compared to 2012 grew by 0.9 percentage points, reaching 24.3%.
Share of population at risk of poverty, by age group, 2008 – 2013 (in %)
|
2008 |
2009 |
2010 |
2011 |
2012 |
2013 |
Total |
26.4 |
20.9 |
19.0 |
19.2 |
19.4 |
21.2 |
of which in age group (years): |
|
|
|
|
|
|
0-17 |
26.3 |
26.3 |
24.7 |
24.4 |
23.4 |
24.3 |
18-64 |
20.5 |
20.4 |
20.2 |
19.3 |
18.8 |
18.4 |
65+ |
47.6 |
17.2 |
9.1 |
13.9 |
17.6 |
27.6 |
The risk of poverty is still high among households with dependent children and a single parent. In 2013 at-risk-of-poverty rate in these households increased by 2.8 percentage points, reaching 41.1%. In turn, in households with three or more children and two adults the risk of poverty declined significantly – from 32.6% in 2012 to 27.7% in 2013. It can be explained with increase in state funding for state aid programmes such as childcare benefit, parent allowance, maternity and paternity benefit, and allowance for child care for twins or more children born in one delivery.
In 2013 at-risk-of-poverty rate among employed persons reached its lowest level since 2004 – 8.1% (in 2012 = 8.9%).
At-risk-of-poverty rate among retired persons has grown rapidly, reaching 29.4% in 2013 compared to 18.8% in 2012. If a person aged 65 and over lives alone, the risk of poverty in this type of household grew even more significantly from 29.2% in 2012 to 51.1% in 2013.
At-risk-of-poverty rate (4) in various socio-economic groups of population, 2004 – 2013 (in %) |
Data source: Central Statistical Bureau of Latvia
Data on relative poverty and social exclusion indicators have been obtained from "European Union Statistics on Income and Living Conditions (EU-SILC)" survey. EU-SILC 2014 surveyed 6.1 thousand households interviewing 12 thousand respondents aged 16 years and over.
For the at-risk-of-poverty calculations data on population income in 2013 were used. Data on household income in 2014 will be compiled in a similar survey conducted from March till the end of June 2015.
Unlike the CSB, Eurostat (Statistical Office of the European Communities) publishes monetary data on poverty and social exclusion with reference to the year when the survey was carried out, while population income data included in the indicator are compiled on the previous calendar year. On 4 November 2014 Eurostat published EU-SILC 2013 survey data on poverty and social exclusion, presenting data on income in Latvia in 2012.
More information on the results and methodology of EU-SILC survey is available in the CSB database section "Monetary poverty and income inequality indicators”.
Methodological explanations
1 Persons with income less than at-risk-of-poverty threshold;
or severely materially deprived; or employed at work with low intensity are
subjected to risk of poverty or social exclusion.
At-risk-of poverty thresholdis 60% of the national median
equivalent disposable income. Median is statistical indicator
characterising central value (midpoint of the breakdown) of the observations
grouped from the lowest value to the highest.
Severe material deprivation- it is considered that a person is
subjected to severe material deprivation if he/she cannot afford at least 4 of
the 9 following items:
1) to pay for rent and public utilities,
2) to keep home adequately warm,
3) to face unexpected expenses,
4) to have a meal with meat, fish or products with equivalent protein
content every second day,
5) to spend one week annual holiday away from home,
6) a personal car,
7) a washing machine,
8) a colour TV,
9) a telephone.
Work intensity is determined by the share of months in a
year that working-age household members have been working during the income
reference year. Individuals are classified by work intensity categories that
range from WI=0 (jobless household) to WI=1 (full work intensity). It is
assumed that a person lives in a household with low work intensity if WI ≤ 0.2.
2 Disposable income is cash income from labour, employee income in kind received by using company car for private needs estimated in cash, income or losses received from self-employment, received pensions and benefits, regular material assistance from other households, profit from interests of deposits, dividends, shares, income received by children aged under 16, income from property rental, receipts from tax adjustments from the State Revenue Service (for business activities, eligible costs – education, medical treatment etc.).
3 Social transfers are pensions and benefits paid by the state or municipality, child maintenance payments, scholarships, social insurance benefits and compensations, including the ones paid by other countries.
4 At-risk-of-poverty rate – share
of persons (in per cent) with an equivalised disposable income below the
at-risk-of-poverty threshold.
Equivalent disposable income is household disposable income
calculated per equivalent consumer. It is obtained by dividing household income
by equivalised household size which is made using the modified OECD equivalence
scale (1.0; 0.5; 0.3). This scale gives a weight of 1.0 to the first adult, 0.5
to any other household member aged 14 and over, and 0.3 to each child aged less
than 14.