Social Europe Financial distress in households as a timely indicator of social trends.

Social Europe

Financial distress in households as a timely indicator of social trends

Social Europe

Main Topics

• DG EMPL interest in BCS data on HH financial situation

• "Financial Distress" indicator

• Review of national time series

• Type of outputs and analysis

• Comparison FD to standard indicators of social situation

• Use as advanced indicator of social developments

Social Europe

Why DG EMPL interested in BCS data on HH financial situation?

Timely info on trends in population facing financial difficulties

• Signalling growing social problems

– rise in HH financial difficulties in MS (e.g. ES, IT, EL)

• Quartile breakdowns trends for diff income groups

• Current main source (EU-SILC) has considerable delays

• Used in "Employment and social situation quarterly review" (quoted by BBC and Wall Street Journal)

As advanced indicator of traditional social indicators?

Social Europe

"Financial Distress" indicator

• Based on monthly question Q12:

Which of these statements best describes the current financial situation of your household?

+ + we are saving a lot

+ we are saving a little= we are just managing to make ends meet on our income− we are having to draw on our savings− − we are running into debtN don't know.

• Breakdowns by income quartile

Social Europe

Review of national time series: typical form

0

5

10

15

20

25

30

35

jan

v.-2

00

0

juin

-20

00

no

v.-2

00

0

avr.-

20

01

sep

t.-2

00

1

févr

.-20

02

juil.-

20

02

déc

.-20

02

mai-

20

03

oct

.-20

03

mar

s-20

04

aoû

t-20

04

jan

v.-2

00

5

juin

-20

05

no

v.-2

00

5

avr.-

20

06

sep

t.-2

00

6

févr

.-20

07

juil.-

20

07

déc

.-20

07

mai-

20

08

oct

.-20

08

mar

s-20

09

aoû

t-20

09

jan

v.-2

01

0

juin

-20

10

no

v.-2

01

0

avr.-

20

11

sep

t.-2

01

1

févr

.-20

12

juil.-

20

12

% o

f re

spo

nse

s

UK: Reported financial distress in households by income quartile of household (2000-2012)

Quartile 1 Quartile 2 Quartile 3 Quartile 4

Source: Joint harmonised EU consumer surveys & DG EMPL calculations. Note: 3 month centred moving average figures

Bottom quartile

Upper quartile

Social Europe

Strong intermingling/reversal of income quartiles

0

5

10

15

20

25

30

35

40

45

50

jan

v.-2

00

0

juin

-20

00

no

v.-2

00

0

avr.-

20

01

sep

t.-2

00

1

févr

.-20

02

juil.-

20

02

déc

.-20

02

mai-

20

03

oct

.-20

03

mar

s-20

04

aoû

t-20

04

jan

v.-2

00

5

juin

-20

05

no

v.-2

00

5

avr.-

20

06

sep

t.-2

00

6

févr

.-20

07

juil.-

20

07

déc

.-20

07

mai-

20

08

oct

.-20

08

mar

s-20

09

aoû

t-20

09

jan

v.-2

01

0

juin

-20

10

no

v.-2

01

0

avr.-

20

11

sep

t.-2

01

1

févr

.-20

12

juil.-

20

12

% o

f re

spo

nse

s

Cyprus: Reported financial distress in households by income quartile of household (2000-2012)



Bottom quartile

Upper quartile0

10

20

30

40

50

60

jan

v.-2

00

0

juin

-20

00

no

v.-2

00

0

avr.-

20

01

sep

t.-2

00

1

févr

.-20

02

juil.-

20

02

déc

.-20

02

mai-

20

03

oct

.-20

03

mar

s-20

04

aoû

t-20

04

jan

v.-2

00

5

juin

-20

05

no

v.-2

00

5

avr.-

20

06

sep

t.-2

00

6

févr

.-20

07

juil.-

20

07

déc

.-20

07

mai-

20

08

oct

.-20

08

mar

s-20

09

aoû

t-20

09

jan

v.-2

01

0

juin

-20

10

no

v.-2

01

0

avr.-

20

11

sep

t.-2

01

1

févr

.-20

12

juil.-

20

12

% o

f re

spo

nse

s

Greece: Reported financial distress in households by income quartile of household (2000-2012)



Bottom quartile

Upper quartile

0

5

10

15

20

25

30

35

40

45

jan

v.-2

00

0

juin

-20

00

no

v.-2

00

0

avr.-

20

01

sep

t.-2

00

1

févr

.-20

02

juil.-

20

02

déc

.-20

02

mai-

20

03

oct

.-20

03

mar

s-20

04

aoû

t-20

04

jan

v.-2

00

5

juin

-20

05

no

v.-2

00

5

avr.-

20

06

sep

t.-2

00

6

févr

.-20

07

juil.-

20

07

déc

.-20

07

mai-

20

08

oct

.-20

08

mar

s-20

09

aoû

t-20

09

jan

v.-2

01

0

juin

-20

10

no

v.-2

01

0

avr.-

20

11

sep

t.-2

01

1

févr

.-20

12

juil.-

20

12

% o

f re

spo

nse

s

Hungary: Reported financial distress in households by income quartile of household (2000-2012)



Bottom quartile

Upper quartile0

10

20

30

40

50

60

70

80

90

jan

v.-2

00

0

juin

-20

00

no

v.-2

00

0

avr.-

20

01

sep

t.-2

00

1

févr

.-20

02

juil.-

20

02

déc

.-20

02

mai-

20

03

oct

.-20

03

mar

s-20

04

aoû

t-20

04

jan

v.-2

00

5

juin

-20

05

no

v.-2

00

5

avr.-

20

06

sep

t.-2

00

6

févr

.-20

07

juil.-

20

07

déc

.-20

07

mai-

20

08

oct

.-20

08

mar

s-20

09

aoû

t-20

09

jan

v.-2

01

0

juin

-20

10

no

v.-2

01

0

avr.-

20

11

sep

t.-2

01

1

févr

.-20

12

juil.-

20

12

% o

f re

spo

nse

s

Ireland: Reported financial distress in households by income quartile of household (2000-2012)



Bottom quartile

Upper quartile

Social Europe

Problems in a specific period

0

5

10

15

20

25

30

35

40

janv

.-20

00ju

in-2

000

nov.

-200

0av

r.-2

001

sept

.-20

01fé

vr.-

2002

juil.

-200

2dé

c.-2

002

mai

-200

3oc

t.-2

003

mar

s-20

04ao

ût-2

004

janv

.-20

05ju

in-2

005

nov.

-200

5av

r.-2

006

sept

.-20

06fé

vr.-

2007

juil.

-200

7dé

c.-2

007

mai

-200

8oc

t.-2

008

mar

s-20

09ao

ût-2

009

janv

.-20

10ju

in-2

010

nov.

-201

0av

r.-2

011

sept

.-20

11fé

vr.-

2012

juil.

-201

2

% o

f res

pons

es

Italy: Reported financial distress in households by income quartile of household (2000-2012)



Bottom quartile

Upper quartile0

5

10

15

20

25

30

35

40

45

janv

.-20

00ju

in-2

000

nov.

-200

0av

r.-2

001

sept

.-20

01fé

vr.-

2002

juil.

-200

2dé

c.-2

002

mai

-200

3oc

t.-2

003

mar

s-20

04ao

ût-2

004

janv

.-20

05ju

in-2

005

nov.

-200

5av

r.-2

006

sept

.-20

06fé

vr.-

2007

juil.

-200

7dé

c.-2

007

mai

-200

8oc

t.-2

008

mar

s-20

09ao

ût-2

009

janv

.-20

10ju

in-2

010

nov.

-201

0av

r.-2

011

sept

.-20

11fé

vr.-

2012

juil.

-201

2

% o

f res

pons

es

Spain: Reported financial distress in households by income quartile of household (2000-2012)



Bottom quartile

Upper quartile

Social Europe

Financial distress: BelgiumBelgium

0

2

4

6

8

10

12

14

16

18

janv.

-200

0jui

n-2

000

nov.

-200

0av

r.-2

001

sept

.-2

001

févr.

-200

2jui

l.-2

002

déc.

-200

2ma

i-20

03oc

t.-2

003

mars

-200

4ao

ût-2

004

janv.

-200

5jui

n-2

005

nov.

-200

5av

r.-2

006

sept

.-2

006

févr.

-200

7jui

l.-2

007

déc.

-200

7ma

i-20

08oc

t.-2

008

mars

-200

9ao

ût-2

009

janv.

-201

0jui

n-2

010

nov.

-201

0av

r.-2

011

sept

.-2

011

févr.

-201

2jui

l.-2

012

% of

resp

onse

s

Belgium: Reported financial distress in households (2000-2012)

Total Long term av H-P Total


0

5

10

15

20

25

30

35

janv.

-200

0jui

n-2

000

nov.

-200

0av

r.-2

001

sept

.-2

001

févr.

-200

2jui

l.-2

002

déc.

-200

2ma

i-20

03oc

t.-2

003

mars

-200

4ao

ût-2

004

janv.

-200

5jui

n-2

005

nov.

-200

5av

r.-2

006

sept

.-2

006

févr.

-200

7jui

l.-2

007

déc.

-200

7ma

i-20

08oc

t.-2

008

mars

-200

9ao

ût-2

009

janv.

-201

0jui

n-2

010

nov.

-201

0av

r.-2

011

sept

.-2

011

févr.

-201

2jui

l.-2

012

% of

resp

onse

s

Belgium: Reported financial distress in households by income quartile of household (2000-2012)



Bottom quartile

Upper quartile0

5

10

15

20

25

30

janv.

-200

0jui

n-2

000

nov.

-200

0av

r.-2

001

sept

.-2

001

févr.

-200

2jui

l.-2

002

déc.

-200

2ma

i-20

03oc

t.-2

003

mars

-200

4ao

ût-2

004

janv.

-200

5jui

n-2

005

nov.

-200

5av

r.-2

006

sept

.-2

006

févr.

-200

7jui

l.-2

007

déc.

-200

7ma

i-20

08oc

t.-2

008

mars

-200

9ao

ût-2

009

janv.

-201

0jui

n-2

010

nov.

-201

0av

r.-2

011

sept

.-2

011

févr.

-201

2jui

l.-2

012

% of

resp

onse

s

Belgium: Reported financial distress in households by income quartile of household (2000-2012)


Bottom quartile

Upper quartile

• ↑ in FD until 2008, then general decline (broadly ↓ since start of crisis)

• Diff FD lowest and highest quartiles ↑ over most of period

• Recently ↓ among lower quartile and ↑ among upper quartile

Social Europe

Financial distress: Germany

• FD broadly ↓, only temp worsening due to crisis

• Continued falls, although signs of bottoming out mid-2011

• Improvement over recent years similar across diff income quartiles

Germany

0

2

4

6

8

10

12

14

16

18

Jan-

2000

Jun-

2000

Nov-2

000

Apr-2

001

Sep-

2001

Feb-

2002

Jul-2

002

Dec-2

002

May

-200

3Oc

t-200

3M

ar-2

004

Aug-2

004

Jan-

2005

Jun-

2005

Nov-2

005

Apr-2

006

Sep-

2006

Feb-

2007

Jul-2

007

Dec-2

007

May

-200

8Oc

t-200

8M

ar-2

009

Aug-2

009

Jan-

2010

Jun-

2010

Nov-2

010

Apr-2

011

Sep-

2011

Feb-

2012

Jul-2

012

% of

resp

onse

s

Germany: Reported financial distress in households (2000-2012)



0

5

10

15

20

25

30

Jan-

2000

Jun-

2000

Nov-2

000

Apr-2

001

Sep-

2001

Feb-

2002

Jul-2

002

Dec-2

002

May

-200

3Oc

t-200

3M

ar-2

004

Aug-2

004

Jan-

2005

Jun-

2005

Nov-2

005

Apr-2

006

Sep-

2006

Feb-

2007

Jul-2

007

Dec-2

007

May

-200

8Oc

t-200

8M

ar-2

009

Aug-2

009

Jan-

2010

Jun-

2010

Nov-2

010

Apr-2

011

Sep-

2011

Feb-

2012

Jul-2

012

% of

resp

onse

s

Germany: Reported financial distress in households by income quartile of household (2000-2012)



Bottom quartile

Upper quartile

0

5

10

15

20

25

Jan-

2000

Jun-

2000

Nov-2

000

Apr-2

001

Sep-

2001

Feb-

2002

Jul-2

002

Dec-2

002

May

-200

3Oc

t-200

3M

ar-2

004

Aug-2

004

Jan-

2005

Jun-

2005

Nov-2

005

Apr-2

006

Sep-

2006

Feb-

2007

Jul-2

007

Dec-2

007

May

-200

8Oc

t-200

8M

ar-2

009

Aug-2

009

Jan-

2010

Jun-

2010

Nov-2

010

Apr-2

011

Sep-

2011

Feb-

2012

Jul-2

012

% of

resp

onse

s

Germany: Reported financial distress in households by income quartile of household (2000-2012)


Bottom quartile

Upper quartile

Social Europe

Financial distress: SpainSpain

0

5

10

15

20

25

30

janv.

-200

0jui

n-2

000

nov.

-200

0av

r.-2

001

sept

.-2

001

févr.

-200

2jui

l.-2

002

déc.

-200

2ma

i-2

003

oct.

-200

3ma

rs-2

004

août

-200

4jan

v.-2

005

juin

-200

5no

v.-2

005

avr.

-200

6se

pt.

-200

6fév

r.-2

007

juil.

-200

7dé

c.-2

007

mai

-200

8oc

t.-2

008

mars

-200

9ao

ût-2

009

janv.

-201

0jui

n-2

010

nov.

-201

0av

r.-2

011

sept

.-2

011

févr.

-201

2jui

l.-2

012

% of

resp

onse

s

Spain: Reported financial distress in households (2000-2012)



0

5

10

15

20

25

30

35

40

45

janv.

-200

0jui

n-2

000

nov.

-200

0av

r.-2

001

sept

.-2

001

févr.

-200

2jui

l.-2

002

déc.

-200

2ma

i-2

003

oct.

-200

3ma

rs-2

004

août

-200

4jan

v.-2

005

juin

-200

5no

v.-2

005

avr.

-200

6se

pt.

-200

6fév

r.-2

007

juil.

-200

7dé

c.-2

007

mai

-200

8oc

t.-2

008

mars

-200

9ao

ût-2

009

janv.

-201

0jui

n-2

010

nov.

-201

0av

r.-2

011

sept

.-2

011

févr.

-201

2jui

l.-2

012

% of

resp

onse

s




Bottom quartile

Upper quartile

0

5

10

15

20

25

30

35

40

janv.

-200

0jui

n-2

000

nov.

-200

0av

r.-2

001

sept

.-2

001

févr.

-200

2jui

l.-2

002

déc.

-200

2ma

i-2

003

oct.

-200

3ma

rs-2

004

août

-200

4jan

v.-2

005

juin

-200

5no

v.-2

005

avr.

-200

6se

pt.

-200

6fév

r.-2

007

juil.

-200

7dé

c.-2

007

mai

-200

8oc

t.-2

008

mars

-200

9ao

ût-2

009

janv.

-201

0jui

n-2

010

nov.

-201

0av

r.-2

011

sept

.-2

011

févr.

-201

2jui

l.-2

012

% of

resp

onse

s



Bottom quartile

Upper quartile

• Since late 2007, accelerated worsening in FD

• improvement over 2011 for upper quartiles but worsening for lower quartile widening of gap

• during latest months trends reverse

Social Europe

Comparison of FD with traditional indicators of social situation

• Social indicators from EU-SILC (2004–2010)

• Fin strain indicators

• share of popn in situations of inability to make ends meet

• share of popn in arrears on utility bills

• share of popn in arrears on mortgage or rent payments

• Key social indicators

• popn share in severe material deprivation

• at-risk-of poverty rate (AROP)

• at-risk-of poverty or social exclusion rate (AROPE)

Social Europe

Correlations of av. annual financial distress and degrees of inability to make ends meet (SILC)

-1.0

-0.8

-0.6

-0.4

-0.2

0.0

0.2

0.4

0.6

0.8

1.0

BG CY FR PT FI AT CZ RO DE MT LT BE LU UK LV SK HU DK SI NL EL IT SE EE ES PL

Corr

elati

on

Note: Countries ordered by share of population making ends meet with great difficulty

Correlations of the average annual financial distress indicator (average of the 12 months figures for a given year) and the SILC-based inability to make ends meet

Households making ends meet with great difficultyHouseholds making ends meet with difficulty or great difficulty

For 2/3 quite good

• strong (>0.65) 10 MS

• medium for 6 MS

for 1/3 MS less +ve

• For 5 (AT, CZ, DE, MT, RO) weak

• 5 others (BG, CY, FI, FR, PT) opp sense to expected

=> what being measured?

Social Europe

Correlations of FD and (a) share of people in arrears on utility bills and (b) the share of people in arrears on mortgage/rent payments

• Good on at least one of arrears items in 2/3 of MS

• For a few MS, no clear same-sense relation (AT, BE, CZ, FI, FR & PT)

=> for these no clear link to financial situation in SILC

BE DE DK ES EL IE IT NL LU UK PT AT SE FI BG CY CZ EE HU LT LV MT PL RO SK SI FR

Mortgage/rent -0,52 0,55 -0,41 0,92 0,16 0,40 0,72 0,49 -0,37 -0,62 -0,37 0,77 -0,40 -0,21 0,95 -0,32 0,66 0,54 0,40 0,72 -0,12 0,95 0,29 0,55 0,47 -0,53

Utilities 0,02 -0,21 0,17 0,81 -0,57 0,65 0,97 0,72 0,94 -0,43 -0,28 0,28 -0,09 0,89 -0,29 -0,31 0,94 0,45 -0,61 0,80 0,06 0,92 0,55 0,70 0,64 -0,60

Mortgage/rent -0,28 0,56 0,35 0,86 0,69 -0,27 -0,04 0,77 0,52 -0,49 -0,80 0,77 0,20 0,24 0,80 0,30 0,24 0,94 0,69 0,92 0,46 0,80 -0,38 -0,20 -0,20 -0,48

Utilities 0,34 -0,33 0,56 0,88 -0,23 0,52 0,48 0,72 0,34 -0,77 -0,65 0,16 -0,50 0,08 -0,46 0,35 0,58 0,76 -0,02 0,94 -0,38 0,81 -0,09 -0,04 0,27 -0,68

Current SILC and FD

Current SILC and prev year FD

Social Europe

Member States for which financial distress indicator correlates well with the key social situation indicators

• Overall, FD advanced indicator of at least one key social indictor in 15 MS

• No clear correlation with any of key social indicators for BE, BG, CZ, FR, FI, DE, EL & HU

Strong correlation Medium correlation

Same year CY, EE, IT, NL, PL, SE LU, MT, PT, SI, SK

better in following year ES, PT, EE, SK LU, LV, UK

Same year AT, CY, DK, PL, SK BE, LT, SI, ES

better in following year DK, ES, LU LT

Same year CY, EE, NL, PL, SI, SK MT, ES

better in following year DK, ES, LU, SK LV, PT, UK

Correlation with FD time series:

AROP

SMD

AROPE

Social Europe

Correlations of financial distress and key social indicators for Netherlands and Poland

Netherlands

AROP SMD AROPE

9.00

9.50

10.00

10.50

11.00

11.50

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

2004 2005 2006 2007 2008 2009 2010

Fin Distress - Total

AROP

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

2004 2005 2006 2007 2008 2009 2010


SMD

14

14.5

15

15.5

16

16.5

17

4.00

4.50

5.00

5.50

6.00

6.50

7.00

7.50

8.00

8.50

2004 2005 2006 2007 2008 2009 2010


AROPE

Poland

AROP SMD AROPE

15.00

16.00

17.00

18.00

19.00

20.00

21.00

8.00

10.00

12.00

14.00

16.00

18.00

20.00

22.00

24.00

2004 2005 2006 2007 2008 2009 2010


AROP

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

8.00

10.00

12.00

14.00

16.00

18.00

20.00

22.00

24.00

2004 2005 2006 2007 2008 2009 2010


SMD

15

20

25

30

35

40

45

50

8.00

10.00

12.00

14.00

16.00

18.00

20.00

22.00

24.00

2004 2005 2006 2007 2008 2009 2010


AROPE

Social Europe

Conclusions• Financial distress data can provide useful and timely info on trends in popn facing

financial difficulties

=> useful for signalling growing social problems

• FD can be used to some extent as advanced indicator of established social indicators in many MS, although actual hard indicators it can "foretell" depends on particular MS

• For some MS no clear correlation with any of key social indicators reviewed (BE, BG, CZ, DE, EL, FI, FR, HU)

• Further investigation: need access to detailed response categories for Q12 & national questionnaires

• need national data providers to check data series to ensure consistent / no gaps

•

Social Europe

• Thank you for your attention

Social Europe Financial distress in households as a timely indicator of social trends.

Documents

social europe problems

social europe comparison

key social indictor

social europe main topics

social europe member

growing social problems

silc slide

hu slide