Theodore Mitrakos
Bank 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
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
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
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)
Decile shares
Income
30
30
25
25
1974
1974
20
1982
1988
15
1994
1999
2004
10
20
Income share
Cons. expend. share
Consumption Expenditure
1982
1988
1994
15
1999
2004
10
2008
2008
5
5
0
0
1
2
3
4
5
Decile
6
7
8
9
10
1
2
3
4
5
6
Decile
7
8
9
10
Inequality changes in decile shares
Consumption Expenditure
2,0
1,0
0,0
-1,0
1974-82
1982-88
1988-94
1994-99
1999-2004
2004-08
1999-2004
2004-08
-2,0
-3,0
-4,0
Income
2,0
0,0
-2,0
-4,0
-6,0
1974-82
1982-88
1988-94
1994-99
Lorenz curves
Consumption Expenditure
Income
100
100
1974
1982
1988
1994
1999
2004
2008
Consumption share
80
70
60
50
80
70
40
60
50
40
30
30
20
20
10
10
0
0
0
10
20
30
1974
1982
1988
1994
1999
2004
2008
90
Income share
90
40
50
60
Population share
70
80
90
100
0
10
20
30
40
50
60
Population share
70
80
90
100
Lorenz dominance and Lorenz curve differences
Consumption Expenditure
6,0
1982
+
1988
+
=
1994
+
=
5,0
4,0
1974
xx
1982
3,0
1999
+
=
x
-
2004
+
+
+
+
+
2008
+
+
+
+
+
1988
1994
1999
2,0
2004
2008
1,0
xx
0,0
0
1974
1982
1988
1994
1999
2004
10
20
30
40
50
60
70
80
90
100
-1,0
Income
1982
+
1988
+
=
1994
+
xx
1999
2004
2008
+
+
+
8,00
+
+
+
7,00
6,00
xx
+
+
+
1974
5,00
1982
+
+
+
1988
4,00
1994
3,00
+
+
1999
2004
2,00
+
2008
1,00
0,00
1974
1982
1988
1994
1999
2004
0
-1,00
10
20
30
40
50
60
70
80
90
100
Inter-temporal trends in inequality indices
1974-2008 (HBSs)
Consumption Expenditure
Income
100
100
95
95
90
90
85
85
80
80
75
75
70
70
65
65
60
60
55
55
50
50
1974
1982
1988
Gini
1994
Atkinson (ε=0.5)
1999
2004
Atkinson (ε=2.0)
2008
1974
1982
1988
Gini
1994
Atkinson (ε=0.5)
1999
2004
Atkinson (ε=2.0)
2008
Inter-temporal trends in inequality
Gini Index, 1994-2009 (HBSs and ECHP / EU-SILC)
Distribution of disposable income
36
35
34
35,0
34,0
34,7
34,0
33,0
33,4
33
32,5
32
31
ECHP / EU-SILC
30
HBS Disposable income
31,0
29
28
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Structure of inequality
Share 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
Trend decomposition of inequality (1974-2008)
Grouping criterion
Contribution of:
Consumption expend.
Mean
Theil
Varlog
log dev.
Theil
Income
Mean
log dev.
Varlog
Locality
Changes “within groups”
Changes in population shares
Changes “between groups”
74.7
6.6
18.7
74.8
5.9
19.2
72.8
9.3
18.0
82.4
-0.4
17.9
82.4
-0.3
17.9
73.0
2.2
24.8
102.9
-6.3
3.4
103.9
-6.7
2.7
101.8
-9.6
7.7
102.8
-6.1
3.3
101.7
-5.4
3.6
96.9
-4.4
7.4
88.0
-8.3
20.2
90.9
-12.5
21.6
91.9
-12.2
20.3
80.8
-10.6
29.8
88.3
-15.9
27.5
93.9
-19.4
25.6
64.4
20.0
15.5
67.1
-7.5
40.4
65.8
-7.0
41.2
70.6
6.7
22.7
70.4
-18.6
48.2
67.5
-21.3
53.8
-36.6
-38.1
-39.2
-45.6
-45.6
-46.7
HH type
Changes “within groups”
Changes in population shares
Changes “between groups”
Occupational group of HH Head
Changes “within groups”
Changes in population shares
Changes “between groups”
Educational group of HH Head
Changes “within groups”
Changes in population shares
Changes “between groups”
Proportional change in inequality
Inter-temporal trends in poverty indices
1974-2008 (HBSs) – relative poverty lines
Consumption Expenditure
Income
100
100
80
80
60
60
40
40
20
20
0
1974
1982
Poverty rate
1988
1994
Poverty gap
1999
2004
2008
Foster et al (a=2)
0
1974
1982
Poverty rate
1988
1994
Poverty gap
1999
2004
2008
Foster et al (a=2)
Inter-temporal trends in poverty indices
1974-2008 (HBSs) – fixed (1999) poverty line
Consumption Expenditure
Income
100
100
80
80
60
60
40
40
20
20
0
1974
0
1982
Poverty rate
1988
1994
Poverty gap
1999
2004
2008
Foster et al (a=2)
1974
1982
Poverty rate
1988
1994
Poverty gap
1999
2004
2008
Foster et al (a=2)
Inter-temporal trends in relative poverty
Poverty rate, 1994-2009 (HBSs and ECHP / EU-SILC)
Distribution of disposable income
23
22
22,0
21,3
21
21,0
20,1
20,0
20
20,0
19,8
19
18
ECHP-EUSILC
17
HBS Disposable income
16,8
16
15
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
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
Childless couples (at least
one 65+)
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
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
Members of HHs headed by
farmers
Members of HHs headed by
unemployed
Members of HHs headed by
pensioners
Members of HHs headed by
persons with no prim. educ.
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
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
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
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
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
Contribution to aggregate poverty
(consumption expenditure, FGT2, 1974-2008)
100%
100%
90%
90%
80%
70%
80%
70%
60%
60%
50%
50%
40%
40%
30%
30%
20%
20%
10%
10%
0%
0%
1974
1974
1982
1988
Urban areas
1994
1999
Semi-urban areas
2004
1988
1994
1999
2004
2008
2008
Rural areas
100%
100%
90%
80%
80%
70%
60%
One or two (below 65)
One or two (at least one 65+)
Couple with children below 18
Other
60%
40%
50%
20%
40%
30%
0%
20%
10%
1974
1982
1982
1988
1994
1999
2004
2008
0%
1974
1982
1988
1994
1999
2004
Farmer or agric. W orker
Self-employed (non-agr.)
Manual employee non-agr.
Retired
Tertiary completed
Secondary completed
Unemployed
Other
Primary completed
Primary not completed
2008
Logit estimates of poverty risk
(odds ratios, consumption expenditure)
1974
LOCALITY
Municipalities > 100.000
Semi-rural areas
Rural areas
HH TYPE
One person 65+
Ένα άτομο 65 ετών και άνω
Childless couple (none 65+)
Childless couple (at least one 65+)
Couple with 1 child
Couple with 3+ children
Monoparental HH
Other
OCCUPATIONAL GROUP OF HH HEAD
Employer (non-agric.)
Professional (non-agric.)
Self-employed (non-agric.)
Farmer
Employee (non-agric.)
Unemployed
Pensioner
Other
EDUCATIONAL LEVEL OF HH HEAD
University
Upper secondary
Lower secondary
Primary not completed
1982
1988
1994
1999
2004
2008
0.43 **
1.17
1.65 **
0.57 ** 0.80 *
1.26
1.27
1.35 ** 1.73 **
0.69 **
1.71 **
1.36 **
0.56 ** 0.82 ** 0.96
1.21 ** 0.92
1.52 **
1.55 ** 1.59 ** 1.73 **
2.29
3.14
0.82
2.04
0.92
1.89
0.91
1.36
**
**
1.71
4.65
1.20
3.17
1.05
1.67
1.20
1.65
0.62
2.15 **
0.84
1.79 **
0.78
1.51 *
0.78
1.11
0.80
2.83
0.95
1.96
1.09
1.65
1.62
1.28
0.14
0.85
0.96
1.52
0.73
1.86
1.80
1.83
**
**
**
**
**
0.20
0.59
0.69
0.81
0.50
2.16
1.05
1.10
**
**
*
*
**
**
0.24
2.08
0.87
1.42
0.66
2.18
1.47
1.28
0.13
0.33
0.56
0.90
0.21
1.46
0.68
0.64
0.06
0.26
0.50
1.73
**
**
**
**
0.16 ** 0.09
0.30
0.40 **
0.77
1.51 ** 1.68
**
**
*
**
0.18
0.40
0.60
2.15
**
**
**
**
**
**
**
**
**
**
**
**
1.27
2.76 **
0.76
2.59 **
0.75
1.50 *
0.71
1.18
** 0.55
3.33
1.17
** 1.62
* 0.81
* 2.54
** 1.61
1.95
*
**
**
**
**
**
**
*
**
1.32
2.62
0.83
2.34
0.79
1.84
1.68
1.61
**
**
**
*
**
1.03
2.33
1.16
2.51
1.19
2.26
1.84
1.42
** 0.05 ** 0.13
** 0.09 ** 0.26
** 0.40 ** 0.33
0.82 * 0.86
** 0.29 ** 0.31
** 0.95
1.38
** 0.57 ** 0.61
** 0.56 ** 0.89
0.38 ** 0.32 **
0.55 ** 0.56 **
0.89
0.90
1.95 ** 1.97 **
0.23
0.36
0.78
2.31
**
**
**
**
**
**
**
**
**
**
**
*
**
Trend decomposition of poverty (, FGT2, 1974-2008)
Consumption expend.
Grouping criterion
Within
groups
Population
shares
poverty
Income
Within
groups
Population
shares
poverty
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
Inter-temporal trends in welfare indices
1974-2008 (HBSs)
Consumption Expenditure
Income
300
300
250
250
200
200
150
150
100
100
100
100
50
50
1974
Gini
1982
1988
1994
Atkinson (A, ε=0.5)
1999
2008
1974
Atkinson (Α, ε=2.0)
Gini
2004
1982
1988
1994
Atkinson (A, ε=0.5)
1999
2004
2008
Atkinson (Α, ε=2.0)
International comparisons: Inequality
International comparisons: poverty
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)
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)
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!