Report Social Situation Monitor Research Notes 1/2013
Nowcasting: estimating developments as regards the risk of poverty and income distribution in 2012 and 2013
The at-risk-of-poverty rate is one of the three indicators used for monitoring progress towards the Europe 2020 poverty and social exclusion reduction target. Timeliness of this indicator is critical for monitoring the effectiveness of policies. However, due in part to the complicated nature of the European Union Statistics on Income and Living Conditions (EU-SILC), estimates of the number of people at risk of poverty are published with a 2 to 3 year delay. The present paper is divided into two parts. The first presents a method of estimating (‘nowcasting’) the current distribution of income between households, including the at-risk-of-poverty rate, for the European Union countries using a tax-benefit microsimulation model (EUROMOD) combined with up-to-date macro-level statistics. The method is applied to 10 EU Member States experiencing differing economic conditions over the period, including those which have been affected comparatively little by the crisis as well as those which have suffered a major reduction in economic activity and employment. The second part uses the European Labour Force Survey to estimate changes in household work intensity up to 2012 and the implications of these for the relative number of people of working age at risk of poverty, as well as assessing the likely changes in both these indicators in 2013 given employment development up to the middle of the year.