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Studying the evolution of cumulative deprivation among European countries with a copula-based approach.

Working Paper 2024-667

Abstract

This paper adopts a novel copula-based technique to measure multidimensional dependence among facets of cumulative deprivation and provides empirical insights on this phenomenon from a cross-country and time perspective. Cumulative deprivation is a condition of simultaneous relative poverty across multiple dimensions of life. The dimensions taken into account are: disposable income, health status, housing quality, job conditions and educational attainment. Multidimensional deprivation is evaluated with the downward diagonal dependence index (DDDI). This index provides a measure of statistical dependence among the considered dimensions specifically for the bottom part of the overall joint distribution. The empirical application focuses on Belgium, France, Germany, Italy, Spain, Czech republic, Romania and Sweden from 2007 to 2019 using EU-SILC data. In the considered period cumulative deprivation and multidimensional dependence both show a growing trend. The rise in the proportion of people who are deprived in many different dimensions strengthens their statistical association. The growth of multidimensional dependence is concerning and requires reconsidering the actual welfare states and their policies.

Authors: Giovanna Scarchilli.

Keywords: Cumulative deprivation, Copula function, Multidimensional dependence, Cross time and country comparisons
JEL: D63, I32