Income Distribution and Social Exclusion of Children: Evidence from Italy and Spain in the 1990s *

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INTRODUCTION

The last decade has witnessed a striking divergence in the economic well-being of children and the elderly, the two most vulnerable age groups in any society. In many industrialized countries, an improvement in the economic situation of the elderly has been accompanied by a deterioration of the economic situation of children. (1) According to Eurostat (2000a), 21% of all children in the European Union live in a low-income household, in contrast to 16% for adults. (2)

In this paper, we investigate the differences between the well-being of different social groups, with a focus on the relative position of individuals living in households with children. We concentrate on Italy and Spain in the mid-1990s since these countries are highly comparable in many crucial aspects, including their living conditions and welfare state institutions. While most studies have restricted the analysis of the well-being of children to monetary indicators (typically poverty rate), we add to the literature by analyzing both monetary and non-monetary indicators. The original contribution of this paper is thus both a methodological one, by demonstrating the lack of correlation between monetary and non-monetary indicators of well-being, and a substantive one, in documenting the degree of social and economic deprivation of children in Italy and Spain. In particular, and following the approach suggested by Tsakloglou and Papadopoulos (2001), we conclude that individuals living in households with children in the 1990s were at greater risk of social exclusion than individuals living in households without children in both Italy and Spain. Such individuals performed worse than average on every indicator analyzed in this paper, and furthermore, their deprivation tends to persist over time, more so than the rest of the population. The paper also reveals that Italy and Spain are characterized by substantial disparities in all the non-monetary indicators analyzed, but that Spain appears on average more deprived. This is particularly interesting considering that Spain appears as being very similar to Italy when traditional monetary indicators are used (such as the headcount ratio). Results from this paper thus suggest that traditional indicators of poverty are not perfect indicators to identify people who are socially and economically deprived in any given society.

The paper is structured as follows. The next section presents the concept and the measure of social exclusion, the third section describes the dataset and the variables used in the analysis, the fourth section presents the results of the estimation of income poverty, and the fifth section presents the results from the analysis of social exclusion. The last section summarizes the main results.

THE CONCEPT OF SOCIAL EXCLUSION

Social exclusion, a term that originated in France in 1974 (Lenoir, 1974), has recently become one of the main concepts in social policy debates in EU countries. With the Treaty of Amsterdam, which came into force in 1999, the EU has, indeed, enlarged its objectives to include the reduction of social exclusion among its members. Social exclusion is not a term, however, which is easily defined. While there is a general agreement in the literature concerning the definitions of poverty, i.e. a lack of resources (most frequently, income of expenditure), the definition of social exclusion is still very much debated. (3) A consensus is gradually emerging, which acknowledges the links between social exclusion and poverty, but which also acknowledges the differences between the two concepts (Atkinson, 1998). In particular, social exclusion tends to be a multidimensional concept that is concerned not only with income, but also with a wide range of indicators of living standards (Room, 1995). (4)

There are three different definitions of social exclusion: 1) the "French"; 2) the "Anglo-Saxon"; and 3) the "monopoly" approach. …