Employment and Poverty Dynamics Before, During, and After the Crisis

This chapter investigates how changes in employment and poverty relate to each other across the European Union’s Member States. Large employment volatility was accompanied by sizable changes in poverty rates between 2005 and 2012. Based on panel regression results, the poverty to employment elasticity was estimated to be around 25% on average. The role of changes in the poverty rates of individuals in jobless and non-jobless households and of changes in the share of those in jobless households differs greatly across countries. The success of poverty reduction depends to a large extent on three factors: the dynamics of overall employment growth, the fair distribution of employment growth across households with different levels of work intensity, and properly designed social welfare systems to smooth out income losses for families in need.