ISER News
Life chances in Europe: comparative research across the ‘new Europe’
ISER has a long track record in comparative research, but the last 12 months has seen a team of researchers embarking on new wide-ranging and highly innovative cross-national project.
Analysis of Life Chances in Europe (ALICE) combines substantive research on incomes, poverty, work and family formation with work on cross-national research methodology. The team, led by Maria Iacovou and Richard Berthoud, includes about a dozen researchers, most based at ISER, but some visiting in order to take part. The £400,000 project, which is funded by the ESRC, will run through 2009-2010.
Most existing cross-national research on Europe has been based on the European Community Household Panel (ECHP) which carries data on 15 Western and Southern European countries. ALICE is based on its successor, the Survey of Income and Living Conditions (EU-SILC), which covers all 27 countries of the newly enlarged EU.
While the pre-enlargement EU-15 states have been extensively studied, the new member states, most of which are in Central and Eastern Europe, have received much less attention. ALICE provides a unique opportunity to explore and compare the conditions prevailing in these so-called transition economies.
Early indications are that the old Eastern bloc countries differ systematically from other European countries. One example comes from some preliminary work undertaken by the ALICE team on incomes. The research shows that across most of Europe, there is an inverse relationship between incomes and poverty, in other words countries with high per capita incomes have lower rates of poverty and inequality than countries where incomes are low. However, it appears that some Eastern European countries buck this trend: Hungary, for example, has very low real incomes, but also relatively low levels of poverty and inequality.
Another innovative feature of this research lies in the fact that it uses two complementary approaches to analyse income distribution and poverty. Standard income analysis is based on reported income – that is, the incomes reported by respondents in surveys such as the British Household Panel Survey (BHPS). The data can be used to calculate measures of income distribution, indices of inequality, poverty lines, poverty rates, movements in and out of poverty, and other poverty indicators. An alternative approach is based on a purpose-built tax-benefit simulation programme ‘EUROMOD’, which uses some measures of reported income, such as earnings, but which then simulates the taxes and benefits which apply to individuals, families and households.
These two approaches are complementary, and may be expected to generate different results. When looking at the incomes of people with low earnings, for example, it is likely that the standard approach will underestimate these incomes because some people under-report the benefits they receive. The microsimulation approach, on the other hand, may overestimate their incomes if it assumes that everyone takes up all benefits to which they are entitled. By using the two approaches together based on a common data set, it’s hoped researchers can gain useful insights into the interpretation of results, and possible modifications of both methods.
As well as the substantive research already mentioned, ALICE also includes components which investigate issues in cross-national methodological analysis. A number of challenges emerge in cross-national research, which are not present in work based on a single country. One fundamental issue is whether data sets are properly comparable between countries. Even where surveys have been designed to be comparable between countries, cross-national surveys face several important tests of comparability, including differences in measurement properties of survey instruments, differences in non-response bias and differences in the effects of sample design on estimates. In this project, research will focus on the third of these – the effect of the detailed sample design on the accuracy of estimates. By making this part of the wider programme, the team will be able to apply the results empirically and assess whether correcting for the effects of sample design leads to a substantial improvement in the accuracy of estimates.
ALICE combines substantive research on incomes, poverty, work and family formation with work on cross-national research methodology
Cross-national research also throws up challenges in terms of the way in which the various influences on behaviour and outcomes are modelled, and how the results may be appropriately interpreted. The ALICE team is particularly interested in the size of what might be referred to as the ‘country effect’ in relation to the overall range of differences between individuals; they are also interested in the degree to which these ‘country effects’ may be explained by differences in social policy or economic factors.
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