Department of International and European Economic Studies
Athens University of Economics and Business

Newsletter 5/2013

Poverty in Greece: trends in 2013
By Manos Matsaganis & Chrysa Leventi

In this Newsletter we present updated estimates of poverty trends in 2013, as well as revised estimates for 2012. We note that poverty estimates always differ by the index used. We use three poverty indices: (a) the standard relative poverty rate, i.e. the proportion of population with a net income below 60% of median; (b) the fixed poverty rate, measured in terms of a poverty threshold anchored at 60% of the 2009 median in real terms; and (c) the extreme poverty rate, or the proportion of population unable to purchase the cheapest basket of goods consistent with dignified living. We estimate that the relative poverty rate has crept up by three percentage points since 2009. On the other hand, we find that as many as 41% of Greeks were in 2013 below the 2009 poverty threshold. Moreover, we calculate that 1 in 7 persons were below the extreme poverty threshold (compared to 1 in 9 in 2012, and 1 in 45 in 2009). The key poverty-generating mechanism is the steep rise in joblessness, combined with the dramatic gaps in coverage left by a patchy and inadequate social safety net. This is Greece’s ‘New Social Question’. To deal with it, a sharp shift in policy is called for: a comprehensive upgrading of income support and social services to prevent the economic crisis from mutating into a social catastrophe.

The full text of the Newsletter is available here (in Greek).