EU Reference Budgets Network. Project, methodology and principal outcomes
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1 EU Reference Budgets Network Project, methodology and principal outcomes Name National Expert By Tim Goedemé, Tess Penne, Bérénice Storms Herman Deleeck Centre for Social Policy University of Antwerp
2 Outline 1. Why comparable reference budgets? 2. The EU Reference Budgets Network Pilot project 1. Theoretical framework 2. Towards a common methodology 3. Results 3. What reference budgets can teach us 4. Areas for improvement 5. Conclusion 2
3 Why cross-nationally comparable Reference Budgets? 3
4 Human dignity is inviolable. It must be respected and protected. (Article 1, Charter of Fundamental Rights of the European Union) 4
5 What do we need to live a life in human dignity? 5
6 Need for a benchmark that can be used by many NGOs, judges, social policy makers, organisations -To evaluate living situations in relation to human dignity -To identify priorities, to know how to move forward Role for scientists -Bringing together existing knowledge -Assessing a more robust, objective benchmark of what a decent income means Improveresearch.eu
7 Why comparable reference budgets? Reference Budgets (RBs) = illustrative priced baskets of goods and services that represent a targeted living standard, e.g. adequate social participation RBs have been developed in all EU Member States, for a wide range of purposes, using different approaches (Storms et al., 2014) Not comparable => little possibilities for cross-national learning/use Need for a common theoretical and methodological framework
8 Why comparable reference budgets? To help Member States to design effective and adequate income support measures; To facilitate mutual learning and identification of best practices in the fight against poverty; To facilitate the Commission s task of monitoring and assessing the adequacy of income support in Europe; To be a helpful tool for the implementation and monitoring of the 2008 active inclusion recommendation and the 2013 Social Investment Package To contextualise other indicators, and policies 8
9 EU projects ImPRovE (FP7): 7 countries, Goedemé, T., B. Storms, S. Stockman, T. Penne and K. Van den Bosch (2015). "Towards Cross-country Comparable Reference Budgets in Europe: First Results of a Concerted Effort." European Journal of Social Security (EJSS) 17(1): EU Reference Budgets Network Pilot Project: 28 countries, Goedemé, T., B. Storms, T. Penne and K. Van den Bosch, Eds. (2015). The development of a methodology for comparable reference budgets in Europe - Final report of the pilot project. Pilot project for the development of a common methodology on reference budgets in Europe (contract no. VC/2013/0554). Brussels, European Commission. EU and national dimension
10 The EU Reference Budgets Network Pilot Project 10
11 The EU Reference Budgets Network Pilot project Review of state of play Development of common methodology Development of network Researchers & experts Stakeholder organisations Test methodology: food basket + other baskets Improve intellectual foundations for (comparable) reference budgets in the future 11
12 The EU Reference Budgets Network Pilot Project 1. Theoretical Framework 12
13 Theoretical framework Targeted living standard: Minimum resources required to adequately participate in society To participate adequately Being able to adequately take the various social roles one should be able to take as a member of a particular society Being able to take social positions in line with the social expectations as embodied by institutions of society in which one lives 13
14 Theoretical framework What are crucial social positions? European Convention on Human Rights Charter of Fundamental Rights of the European Union Starting list Being a child, father, mother, or any other family relative Being an employee or a self-employed Being a member of associations of various types Being a student Being an active participant in political elections Being a citizen, more broadly speaking 14
15 In line with considered views of citizens? Theoretical framework 3 focus groups in each of 25 EU countries All social positions were generally accepted in all countries In some countries positions added or refined, e.g.: Member of a religious group Provider of informal care, volunteer Consumer Friend Activist 15
16 Theoretical framework What needs should be fulfilled in order to be able to comply with social expectations? Social participation requires autonomy and health (Doyal and Gough, 1991) Justification for 10 intermediate needs (baskets) Nutritious food Protective housing Health care and personal care Suitable clothing Rest and leisure Security in childhood Social relations Mobility Security Life Long Learning 16
17 In line with considered views of citizens? Theoretical framework 3 focus groups in each of 26 EU countries General acceptation Decent work Decent work as a separate intermediate need. 17
18 Theoretical framework Minimum resources required for meeting needs depend on: Individual circumstances => hypothetical households Context => how can we conceive and understand comparability? 18
19 Theoretical framework Procedural comparability: same procedures in all countries Substantive comparability: procedural comparability, with procedures that guarantee the same phenomenon is captured similarly in different social contexts Substantive comparability should be maximised: needs for social participation are fulfilled at a similar level RBs differ because, and only because, of differences in: Institutional context Cultural context Geographical and physical living conditions Economic context 19
20 The EU Reference Budgets Network Pilot Project 2. Towards a common methodology 20
21 Starting point: Towards a common methodology Reference budgets are instrument to build consensus in society about what is an adequate income Show private (out-of-pocket) minimum costs of adequate baskets of goods and services (disposable income) Therefore show also effects of goods and services provided or subsidized by the government (e.g. health, education, transport) Mixed-methods approach: drawing on all relevant information + aiming at maximising comparability Normative and illustrative Feasible 21
22 Towards a common methodology Target population & hypothetical families: A single-person household, A single parent household with two children, A couple with two children Adults at active age (+/- 40 years) Boy in primary education (10 years) Girl in secondary education (14 years) All well-informed, self-reliant, in good health, in capital city => Focus is on minimum necessary resources Slide 22
23 Towards a common methodology Phase 1: Preparation - coordinating team + national teams Phase 2: Orientation- national teams Phase 3: Argumentation - national teams Phase 4: Deliberation & Pricing - coordinating team + national teams Phase 5: Arbitration - national teams Phase 6: Dissemination & Discussion - national teams and coordinating team 23
24 The EU Reference Budgets Network Pilot Project 3. Results 24
25 Results 4 Baskets: Food basket (26 capital cities) Health care basket (8 capital cities) Personal care basket (8 capital cities) Housing basket (10 capital regions) Documented in: Final report Country reports & fact sheets Basket fact sheets Database 25
26 Results: Food basket Context: Important differences in eating patterns and expenditures on food Lack of comparable data on food consumption and (low) food prices Institutionalised social expectations regarding a healthy diet: Food-based dietary guidelines Limited public provision 26
27 Results: Food basket The development of a minimum budget for adequate food intake: 5 milestones Preparation Description of food-based dietary guidelines Drawing up healthy food baskets, based on the foodbased dietary guidelines. Drawing up total food 11/30/2014 baskets fulfilling essential physical and social needs 10/14/2014 Focus Group discussions 2/15/2015 2/28/2015 Pricing Food Baskets 3/31/2015 Country report 4/15/ sep okt nov dec jan feb mrt apr
28 Results: Food basket Assumptions Should allow for good health & prevention of diseases, in line with national FBDGs (EFSA: no EU-wide FBDG s) Includes kitchen equipment for storing, preparing, serving, consuming and conserving food All meals are prepared and eaten at home and the food is acquired, prepared and consumed in the most possible economical way Same waste percentages across EU (fresh fruits 22%, vegetables 28%, potatoes 10%, fish 30%, fatter meat 20% and eggs 12%) Moderate physical activity (minimum recommendation) Should be acceptable, tasty & feasible for wider public: Focus groups Takes into account the social functions of food Common pricing procedure 28
29 CZ HU EE RO SK PL LT BG ES HR LV BE FR PT DE CY IT AT SI NL* SE MT FI EL LU DK* Results: Food basket 400 Total food basket for a single woman, Euro per month, Food for a healthy diet Kitchen equipment Social functions of food Physical activity 29
30 Results: Food basket 350 Sensitivity checks of the food basket for a single woman, Euro per month, CZ PL HU RO LT EE SK HR LV BG ES BE SI FR AT MT PT IT DE CY LU SE NL EL FI DK original food basket average volume, local price 30
31 Results: Food basket 200 Decomposition of the difference between each food basket for a healthy diet and the average food basket (all 25 food baskets taken together) for a single woman, Euro per month, CZ PL HU RO LT EE SK HR LV BG ES BE SI AT MT PT IT DE CY FR LU SE EL FI DK difference in unit price difference in volume 31
32 Conclusion: Results: Food basket Comparable in sense that baskets reflect cost of eating in accordance with national food-based dietary guidelines Relatively robust (bigger picture), but quality varies & pricing is key Comparable food consumption survey and pricing data would improve quality -> case for common food-based dietary guidelines at EU level 32
33 Context: Results: Health care Health care needs strongly dependent on mental and physical condition Limited comparable data on health care consumption Much scientific evidence on needs & effectiveness Public provision Public guidelines Strong coordination and variations limited to objective factors 33
34 Monthly cost (euros) Results: Health care Health care basket: monthly cost in Euros per country per family type Amsterdam Athens Brussels Budapest Helsinki Madrid Rome Vienna City Single woman Single man Woman + 2 children Couple + 2 children 34
35 Results: Health care Content of the health care basket for a couple with two children, as a share of total Vienna Rome Madrid Helsinki Budapest Brussels Athens Amsterdam 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Care every day diseases Care injuries Vaccination and screening Dental examinations Contraception Sun care and Vitamin D Family medicine chest Insurance 35
36 Conclusions Results: Health care Show insight into cost of basic primary health care Important variations across countries, depending on specific items Clear institutional impact of public guidelines & public provision But, more interesting for more complex cases with some (clearly defined) health problems 36
37 Results: Personal care Context: Diverging practices Some evidence, but limited Limited official guidelines No public provision 37
38 Monthly cost in euro Results: Personal care Reference budgets for personal care in eight EU capital cities (2015), monthly amounts in euros Amsterdam Athens Brussels Budapest Helsinki Madrid Rome Vienna Single woman Single man Woman + 2 children Couple + 2 children 38
39 Vienna Rome Madrid Helsinki Budapest Brussels Athens Amsterdam Results: Personal care Content of the personal care basket for a couple with two children, as a share of total 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Hand and body Hygiene Hair care Oral health Intimate hygiene shaving Perfume and cosmetics Toilet and bathroom 39
40 Conclusions Results: Personal care controversial basket due to lack of evidence and guidelines Relatively low amounts Case for making use of household budget survey data & expenditures at certain percentile Even though HBS data not comprehensive Description of reasonable norm & review literature remains useful 40
41 Results: Housing Context: Comparable data available! However, very heterogeneous market Some public guidelines Some public provision EU-SILC + quality criteria from EU indicators Quantile regression (30 th percentile of adequate quality dwellings); number of rooms: overcrowding indicator 41
42 Results: Housing 1200 Total reference housing costs for tenants in the private sector in dwellings satisfying the needs of four family types, EUR, Vienna Brussels* Athens Madrid Helsinki Budapest Rome LuxemburgNetherlands Single Single parent, 2 children Couple Couple, 2 children 42
43 Results: Housing 1200 Total reference housing costs for tenants with reduced rents in dwellings satisfying the needs of four family types, EUR, Vienna Brussels* Madrid Helsinki Budapest Rome Luxemburg Single Single parent, 2 children Couple Couple, 2 children 43
44 Conclusions Results: Housing Strong impact of public provision on cost of housing Comparability possible, even though social situations vary strongly Comparable data has many advantages in terms of achieving and showing comparability & robustness While constructing baskets generates much knowledge about the field under study Limits room for judgement 44
45 What reference budgets can teach us 45
46 What reference budgets can teach us 1. Contextualising other indicators, notably the at-risk-ofpoverty threshold 2. Bringing in the importance of publicly provided goods and services 3. Monitoring the adequacy of income (support) 4. Cross-national learning 46
47 private rent reduced rent private rent private rent reduced rent reduced rent private rent private rent private rent reduced rent private rent reduced rent private rent reduced rent What reference budgets can teach us: contextualising other social indicators The at-risk-of-poverty threshold and reference budgets (single woman), EUR per month Budapest Athens Madrid Rome Amsterdam Brussels Vienna Helsinki Health care Personal care Food + kitchen equipment Housing AROP
48 What reference budgets can teach us: contextualising other social indicators The low cost food budget as % of the at-risk-of-poverty threshold, 2014 LU BE AT FR SE FI DE ES IT CZ CY MT SI PT PL EE SK HU LT HR LV EL BG RO low cost food budget Goedemé, T., et al. (2017), What does it mean to live on the poverty threshold? Lessons from reference budget research, CSB Working Paper series. 48
49 What reference budgets can teach us: poverty measurement Proportion of people with a net disposable income below the RB threshold versus the AROP60 threshold for densely populated areas in three different welfare states, by age groups, EU-SILC 2012 young adult elderly young adult elderly young adult elderly BE ES FI RB arop60 Penne, T., Cussó Parcerisas, I., Mäkinen, L., Storms, B. & Goedemé, T. (2016). Can reference budgets be used as a poverty line? ImPRovE Working Papers N 16/05. 49
50 600 What reference budgets can teach us: assessing the adequacy of (minimum) income support The cost of a healthy diet as percentage of net minimum income protection for families at active age in EU countries, LU AT NL SE DE BE DK FI FR IT CZ SI ES EE PT LT HU PL LV BG RO EL Single Couple Single + 2 children Couple + 2 children 50
51 What reference budgets can teach us: assessing challenges such as food insecurity Percentage of people living in a household with a disposable income below the cost of a healthy diet for their household, densely populated areas, EU-SILC 2012 LU FI MT FR CY SI BE SE CZ DE AT IT HU PL EE PT LT ES HR EL LV RO before housing costs after housing costs 51
52 What reference budgets can teach us and when looking at the details, help to: Identify priorities in social policy Facilitate cross-national learning with regard to how other (similar) countries reduce the cost / accessibility of essential goods and services Understand that ensuring adequate incomes is NOT only about increasing incomes, cf. school lunches, social housing, health care but current budgets may prove overly ambitious for some Member States => setting intermediate targets. 52
53 Areas for improvement 53
54 Areas for improvement Extensions: prioritising policy indicators Pricing: Explore further collaborations with NSIs Cash register data Only price surveys 54
55 3 000 Areas for improvement Reference budgets for Antwerp and Budapest with factor 2 lifespan sensitivity bounds, excl. car, excl. housing excl. car, incl. housing incl. car, incl. housing excl. car, excl. housing excl. car, incl. housing incl. car, incl. housing single person Antwerp Budapest 2 parents, two children Potential of collecting better data on lifespans in collaboration with other DGs & fields of study Cf. preparatory studies for Eco-design and Energy labelling legislation for EC 55
56 Areas for improvement Consultation of citizens Crucial element (lack of data + normative point of view + contextualising and acceptability) Participatory representative Wide range of deliberative techniques, should be further explored Costly: should be used efficiently and when matters most 56
57 Areas for improvement Infrastructure: Network Data collection (Eurobarometer survey, price survey, food consumption survey, comparative HBS; cf. U.S.) Tools 57
58 Conclusions 58
59 Conclusion Reference budgets offer insight into the out-of-pocket cost of essential goods and services for an adequate living standard Reference budgets are able to show an important part of the impact of public provision & subsidies (e.g. school lunches, health care, social housing) Meaningful cross-national results possible if considerable coordination, in spite of vast cross-national differences; but better data, time, resources required 59
60 Conclusion However, reference budgets face challenges of robustness; and are not a straightforward benchmark for minimum income protection May show intermediate benchmarks for reaching adequacy Help to see how other Member States reduce costs of essential goods and services for households Way forward: topical methodological experiments for improvement; data; policy indicators 60
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