Does the EU poverty indicator for 2020 target disadvantage the elderly population?

By Vuong Ngoc Vy Van (VNP 23)

Supervisor: Dr. Vo Tat Thang

Abstract:

The EU has used the AROPE - at risk of poverty or social exclusion as the key indicator in the last decade to monitor their poverty and social inclusion progress against the Europe 2020 Strategy. As the strategy’s period recently ends, the poverty reduction target is likely to be the only unachievable one. This paper analyses the AROPE to examine the hypothesis of medical expense exclusion in the poverty calculation leading to the elderly poverty underestimate. This incidence, in turn, can cause the policy’s lack of attention to older people, so contributing to the objective failure. Data were derived from Eurostat and the SHARE - Survey of Health, Ageing and Retirement in Europe Wave 7. Although healthcare cost is proved to correlate to poverty, it is not considered a key factor in AROPE composition. By addressing the impoverishment effect of healthcare out-of-pocket payment on the elderly headcount poverty ratios in 12 countries, the study shows that the higher the poverty bar is lifted from 5-10-20 euros per day, the more severe the impact is. Together, this research provides an untapped viewpoint for the Europe 2020 final assessment to consider healthcare costs in the poverty indicator.