Page 63 - ePaper
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Chapter 1: The legacy of the crisis: resilience and challenges
distress ( 67 ) in 2014 is now way above the Chart 35: Sources of emergency financial support, by income quartile (%)
long-term trend. Its recent easing in some
Member States has not yet reached low- 80
income households, who remain in the most 70 Bottom quartile
2 quartile
nd
acute financial situation (see Chart 34). 3 quartile
rd
60 Top quartile
While the number of poor people with debt 50
problems has grown as a result of the cri- 40
sis, much of the increase in indebtedness 30
has been among people who had been in
well-paid employment, had lost their jobs 20
and are now left with large outstanding 10
mortgages on their homes with limited 0
prospect of obtaining alternative income Family/relative Friend/neighbour Service provider/ Nobody
anytime soon (Eurofound, 2013). Institution
Source: Eurofound.
Reduced access to finance following the
onset of the recession has increased the cut expenditures on holidays and leisure pooling resources within multi-genera-
vulnerability of people and families and activities, but retain a car insofar as it is tional households, with pensions received
friends to whom they might otherwise necessary in order to maintain employ- by elderly household members serving as
have been able to turn to for financial sup - ability, while strictly limiting its use. In a major source of income for all ( ).
69
port (see Chart 35) (Eurofound, 2013). In countries most hit by the crisis, and in
this context some people — notably those poorer sections of society, this also leads A study on ways in which households
who were unemployed for over a year, to cutbacks on essentials such as food, seek to mitigate the effects of unem -
unable to work due to illness or disability clothing, heating and healthcare. These ployment (Bentolila, 2008) shows that in
or retired — report being unable to turn survey findings are further illustrated Member States where the ‘welfare state
to anybody when they need money ( ). by qualitative analysis (see Annex 3, fails to mitigate the consequences of
68
Extract 3). unemployment, the role of family sup-
Adjusting consumption port is stronger’ and that ‘family networks
Pooling resources represent an important device that allows
Faced with economic hardship, peo- households to insure against labour mar -
ple naturally adjust their consumption If there is insufficient income support, ket risk.’ This can lead to changes in the
behaviour, and are in some cases led people experiencing hardship have to rely composition of households, with adult
to cut down on essentials such as food, on other income sources, such as finan - children staying longer or moving back to
shelter, and healthcare. An analysis cial help from the family, informal work the parental home, or separated partners
based on SILC longitudinal data (Guio or sometimes non-governmental support sharing the same property.
and Pomati, 2014) shows that people (soup kitchen, food banks, etc.). A typical
experiencing economic hardship first example in some countries would involve
Table 1: Order of renouncement to deprivation items
EU-27 AT BE BG CY CZ DK EE ES FI HU IT LT LU LV MT NL PL PT RO UK
Holidays 1 2 1 2 1 1 2 1 1 2 2 1 2 2 2 1 2 1 1 1 2
Unexpected 2 1 2 3 2 2 1 2 2 1 1 2 1 1 1 2 1 2 3 2 1
expenses
Meat/
chicken/ 3 3 5 4 5 4 4 4 5 5 3 5 4 4 3 3 5 3 6 6 5
fish
Home 4 6 4 1 3 5 5 6 4 6 6 4 3 5 6 6 4 4 2 5 4
warm
Arrears 5 4 3 5 4 6 3 3 3 3 4 3 6 3 5 4 3 5 5 4 3
Car 6 5 6 6 6 3 6 5 6 4 5 6 5 6 4 5 6 6 4 3 6
Source: Guio and Pomati, 2014, own calculations based on EU-SILC 2011 longitudinal data.
Note: The ranking shows the more frequent order of renouncement of items within households as long as their deprivation increases.
67
( ) Financial distress is measured as the
need to draw on savings or to run into
debt (Source: European Commission, DG ( ) This trade-off between government
69
ECFIN, Business and Consumers Surveys); income support and household solidarity
see European Commission 2014a. is documented in European Commission,
( ) Evidence supported by qualitative reports 2013a. It shows that Member States with
68
indicates that people most hit by economic widely available income support have
hardship face the greatest difficulties lower shares of working age adults living in
accessing credit or obtaining support from intergenerational households and depending
banks (see Annex 3, Extract 2). on the pensions of the elderly.
61
distress ( 67 ) in 2014 is now way above the Chart 35: Sources of emergency financial support, by income quartile (%)
long-term trend. Its recent easing in some
Member States has not yet reached low- 80
income households, who remain in the most 70 Bottom quartile
2 quartile
nd
acute financial situation (see Chart 34). 3 quartile
rd
60 Top quartile
While the number of poor people with debt 50
problems has grown as a result of the cri- 40
sis, much of the increase in indebtedness 30
has been among people who had been in
well-paid employment, had lost their jobs 20
and are now left with large outstanding 10
mortgages on their homes with limited 0
prospect of obtaining alternative income Family/relative Friend/neighbour Service provider/ Nobody
anytime soon (Eurofound, 2013). Institution
Source: Eurofound.
Reduced access to finance following the
onset of the recession has increased the cut expenditures on holidays and leisure pooling resources within multi-genera-
vulnerability of people and families and activities, but retain a car insofar as it is tional households, with pensions received
friends to whom they might otherwise necessary in order to maintain employ- by elderly household members serving as
have been able to turn to for financial sup - ability, while strictly limiting its use. In a major source of income for all ( ).
69
port (see Chart 35) (Eurofound, 2013). In countries most hit by the crisis, and in
this context some people — notably those poorer sections of society, this also leads A study on ways in which households
who were unemployed for over a year, to cutbacks on essentials such as food, seek to mitigate the effects of unem -
unable to work due to illness or disability clothing, heating and healthcare. These ployment (Bentolila, 2008) shows that in
or retired — report being unable to turn survey findings are further illustrated Member States where the ‘welfare state
to anybody when they need money ( ). by qualitative analysis (see Annex 3, fails to mitigate the consequences of
68
Extract 3). unemployment, the role of family sup-
Adjusting consumption port is stronger’ and that ‘family networks
Pooling resources represent an important device that allows
Faced with economic hardship, peo- households to insure against labour mar -
ple naturally adjust their consumption If there is insufficient income support, ket risk.’ This can lead to changes in the
behaviour, and are in some cases led people experiencing hardship have to rely composition of households, with adult
to cut down on essentials such as food, on other income sources, such as finan - children staying longer or moving back to
shelter, and healthcare. An analysis cial help from the family, informal work the parental home, or separated partners
based on SILC longitudinal data (Guio or sometimes non-governmental support sharing the same property.
and Pomati, 2014) shows that people (soup kitchen, food banks, etc.). A typical
experiencing economic hardship first example in some countries would involve
Table 1: Order of renouncement to deprivation items
EU-27 AT BE BG CY CZ DK EE ES FI HU IT LT LU LV MT NL PL PT RO UK
Holidays 1 2 1 2 1 1 2 1 1 2 2 1 2 2 2 1 2 1 1 1 2
Unexpected 2 1 2 3 2 2 1 2 2 1 1 2 1 1 1 2 1 2 3 2 1
expenses
Meat/
chicken/ 3 3 5 4 5 4 4 4 5 5 3 5 4 4 3 3 5 3 6 6 5
fish
Home 4 6 4 1 3 5 5 6 4 6 6 4 3 5 6 6 4 4 2 5 4
warm
Arrears 5 4 3 5 4 6 3 3 3 3 4 3 6 3 5 4 3 5 5 4 3
Car 6 5 6 6 6 3 6 5 6 4 5 6 5 6 4 5 6 6 4 3 6
Source: Guio and Pomati, 2014, own calculations based on EU-SILC 2011 longitudinal data.
Note: The ranking shows the more frequent order of renouncement of items within households as long as their deprivation increases.
67
( ) Financial distress is measured as the
need to draw on savings or to run into
debt (Source: European Commission, DG ( ) This trade-off between government
69
ECFIN, Business and Consumers Surveys); income support and household solidarity
see European Commission 2014a. is documented in European Commission,
( ) Evidence supported by qualitative reports 2013a. It shows that Member States with
68
indicates that people most hit by economic widely available income support have
hardship face the greatest difficulties lower shares of working age adults living in
accessing credit or obtaining support from intergenerational households and depending
banks (see Annex 3, Extract 2). on the pensions of the elderly.
61
