Research project SO/01/060 (Research action SO)
Using the Panel Study of Belgian Households, this project examines the dynamics of several processes of social integration and exclusion in Belgium. In this context, the concept of “structural poverty” refers to the structural processes that influence poverty (in the short or long term): education, social protection and employment. The “social choices” then determine which of these processes are considered the primary route(s) for intervening to combat poverty. The “insurance state” or “welfare state” puts forward social security as the most important instrument; the “active welfare state” ascribes a central place to labour as the key to income acquisition and social development; the “knowledge society” translates social integration primarily in terms of education and life-long learning.
In the first part, we estimate a dynamic (Markov) model that relates level of education and labour market mobility to mobility into and out of poverty. Poverty is described from the institutional angle of approach and three situations are considered:
(a) under-protection: family income is below the guaranteed minimum income;
(b) social security: income is adjusted to the level of the guaranteed minimum income;
(c) non-poverty: the family income is above the welfare threshold.
Employment and education are important key variables in the model. In order to take their endogenous nature into account, as well as unobserved heterogeneity, a multi-step logit model with generalised residuals is estimated.
Using the results of these estimates, we then (micro-)simulate the effect of various “social choices” on the likelihood of falling upon or below the social assistance threshold. From these micro-simulations, the following conclusions can be drawn:
• Better guaranteed minimum protection does of course close the poverty gap but, in the long term, increases the number of those in poverty – probably because of the poverty trap effect embedded in social security. As a result, it is advisable that this approach be combined with other measures to increase the outflow from social security;
• Activation has highly favourable net effects in the short term but, after 5 years, these decline to at most ¼ of their original level;
• Increasing the number of people with qualifications (at the level of upper secondary education) produces the most lasting effects. In particular, if this strategy is concentrated on individuals living in poverty, the impact will be substantial and sustainable.
Finally, in the third section we provide information about the potential social costs and benefits implied by the “social choices” under consideration.
Maatschappelijke keuzen, structurele armoede en sociale kost : eindrapport
Brussel : Federaal Wetenschapsbeleid, 2005 (SP1463)
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Maatschappelijke keuzen, structurele armoede en sociale kost : samenvatting
Brussel : Federaal Wetenschapsbeleid, 2005 (SP1520)
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