Child Poverty Dynamics and Income Mobility in Europe

While a long-standing literature analyses cross-country variation in the incidence of child poverty in rich countries in a single year, less is known about children’s individual movements into and out of low household income over a period of time. Using longitudinal data from the European Union Statistics on Income and Living Conditions (EU-SILC), the present study addresses this gap by analysing both income mobility and child poverty dynamics in the EU during the recent economic crisis. It finds that income growth among children has been generally pro-poor but not sufficiently so to put a brake on the increasing income inequality. There is substantial heterogeneity among the EU-SILC countries in the rates of child poverty entry and exit. Scandinavian countries tend to combine lower exit and entry rates, while Southern and Eastern European countries tend to have higher rates of both poverty exit and entry. Household-level income events, i.e. relative growth in employee earnings, are found to be the most important predictors of transitions in and out of poverty, followed by employment events (i.e. changes in the number of adult workers), while the relatively rare demographic events have little bearing on child poverty transitions in the EU-SILC.