Survey on Income and Living Conditions

This post was written by Seamus Coffey

The CSO have published the headline figures for the 2011 SILC as well as revised figures for the 2010 SILC which can be found in the release.

There will be some interest in the revision of the 2010 figures but as the data by income decile will be published at a later date we are still unsure of the specific impact the revisions will have on this graph.  The reason for the revision is given as:

In 2010 changes had been made to the processing of the data which resulted in an incorrect treatment in some cases of tax, income and pension contributions. This became clear when unusual trends in certain categories between 2010 and 2011 were further analysed.

On income inequality the revisions of the overall figures for 2010 include:

  • Gini Coefficient: from 33.9 to 31.6
  • Quintile Share: from 5.5 to 4.9
  • At-risk-of-poverty rate: from 15.8% to 14.7%

These are all significant changes.  The reported figures for 2011 indicate a drop in the Gino coefficient to 31.1 but a rise in the at-risk-of-poverty rate to 16.0%.

27 Responses to “Survey on Income and Living Conditions”

  1. kevin denny Says:

    All of these statistics are subject to sampling variation-they are drawn from a random sample. So without knowing the standard errors (not difficult to calculate but not published by the CSO), it is impossible to say whether the changes are statistically significant i.e. not just due to random sampling. Indeed reading p3, para 2 it would appear the author does not understand the meaning of “statistical significance”.

  2. Seamus Coffey Says:

    @ kevin,

    On the changes to the 2010 figures the CSO state that “[t]here was no significant change in the deprivation and consistent poverty rates” whereas they did confirm reductions in the at-risk-of poverty rate and income inequality measures. The 2011 figures provided above are clearly described as the “reported figures”. I had not seen the paragraph you refer to and any inference that the changes were statistically significant was unintended. I would hope that the rejection of the hypothesis of understanding on the basis of the evidence here is a Type I Error.

  3. David Madden Says:

    In fairness to the CSO, they don’t provide standard errors but they do indicate whether the change in certain summary statistics are statistically significant or not. e.g. as part of the summary findings listed on page 1 of the release they state:

    “The Gini coefficient in 2011 was 31.1%, not a statistically significant
    change on the 2010 value (31.6%).”

    If I was to quibble with the way they present the figures it would be talking about the Gini in terms of a percentage - its a coefficient which can lie in the (0,1) interval and I think its potentially misleading to talk about it as a percentage…unlike say the poverty rate.

  4. David O'Donnell Says:

    “Caritas Europa is proud to present this comprehensive, timely and in-depth study on the impacts of the economic crisis and austerity policies on the European Union’s most vulnerable people.”

    “It is notable that along with Cyprus, Ireland is the only
    European country where within the last year the greatest
    impact of financial distress in households has been seen in the
    lower income quartiles rather than the upper quartile
    (European Commission, 2012, p.29).”

    http://static.rasset.ie/documents/news/caritascrisis-report.pdf

    h/t john gallagher

  5. Kevin Denny Says:

    David, that’s what I was referring to. My guess is what they really mean there is “economically significant” i.e. that it was a small change but maybe I’m wrong.

  6. David Madden Says:

    From what I can see, the data in the Caritas report was taken from Eurostat last November and so presumably was based upon the original, as opposed to the revised, SILC 2010. As Seamus points out, the revised SILC 2010 indicates that the rise in poverty in 2010 was less severe than originally thought, from 14.1% to 14.7% as opposed to 15.8%.

    However SILC 2011 shows a rise in poverty to 16%, so in one sense the rise has come, but a year later than originally thought.

    The graph showing changes in income by decile will be revised for 2010 and the guess would be that it will be less regressive than originally thought. However, in turn it might (probably will) also transpire that the equivalent graph for 2011 will show regressive changes in income by decile.

    Bottom line is that (some of) the changes we thought happened in 2010 look as if they may have happened one year later, but all this remains to be confirmed.

  7. Tullmcadoo Says:

    David Madden,
    Perhaps it is just as well we did not unilaterally default on the PN as advocated by many here (including me). Copying the Sheriff of Rockridge’s gambit might have forced us to look again at our safety net in the absence of bail out money.

  8. David Madden Says:

    Well, Kevin, you could be right, but I would be fairly confident that when they use the term “statistically significant” they mean it in the statistician’s sense.

  9. DOCM Says:

    @ All

    Looking at the issues in a wider perspective, FYI this NYT article.

    http://www.nytimes.com/2013/02/14/business/global/minimum-wage-in-europe-offers-ammunition-in-us-debate.html?pagewanted=1&_r=0

  10. DOCM Says:

    @ All

    In an “economic and monetary union with pretensions”, which is probably the best way to describe the EA if not the EU, the Gini coefficient is meaningless.

    Two links to the Der Spiegel online edition illustrate the point;

    http://www.spiegel.de/international/europe/german-media-commentators-on-the-trans-atlantic-trade-agreement-a-883410.html

    http://www.spiegel.de/international/business/european-car-industry-winners-and-losers-drift-further-apart-a-882694.html

    Unless the countries of the EU make some arrangement to find a common ground on appropriate social and working standards, it is difficult to see Europe holding together within the euro. If Italy votes Berlusconi back into power, the die will be cast.

  11. DOCM Says:

    @ All

    As far as Ireland is concerned, the issues are neatly encapsulated in this IT article. (The parties are, believe it or not, members of the same government!).

    http://www.irishtimes.com/newspaper/ireland/2013/0214/1224330013946.html

    The catchphrase “social dividend” seems also certain to enter the national debate. The (Russian?) proverb “before you sell the skin, first shoot the bear” comes to mind.

  12. Paul W Says:

    Good posting. The Caritas paper is better again. Truth is though that most people in Ireland who are on the “I’m ok Jack” side of the economy(ies) don’t actually give much of a toss about the “screwed” economy, once they are ok, and bar the need to be PC about the distant misery of others /neighbours /countrymen.

    This is very obviously reflected in Govt action (policy is PC of course). It is the “fittest” and “connected” who will survive (with some peripheral “charity” for the “Black Babies”).

    What I do note on the “plus side” (which SC obviously wants to emphasise here) however is the relative success in keeping things “up” for many in the last few years (based on borrowed money of course), but I also note the increasing acceleration recently to the “misery” end of negative, socially, financially, etc….

    90% of 65 yrs + citizens dependent on some form of welfare….The future for many seniors seems to be dependent on living with their “kids” as opposed to the other way around witnessed for many in the last few years. But sure, why care about that…? “I’m alright (for now) Jack…”.

    Not much of a “society” right now, is it….Explain why that is wrong.

  13. Michael Hennigan - Finfacts Says:

    The prospect of long-term unemployment and the reality at an individual level of being jobless or being in a sector where job insecurity is common, is of course not reflected in the data. Pension coverage and the prospect of poverty in retirement is also another factor.

    In Ireland, the typical SME worker has no occupational pension (that reflects public policy) and on redundancy gets basic payment. Job insecurity will continue to remain high (pre-2008 is not coming back in the developed world) and almost 80% of private sector workers are in this category. 
     
    In the public sector, there is for existing staff a guarantee of work lifetime employment and also a guaranteed pension payout; most IDA backed foreign companies have relatively secure employment and good terms while farmers have CAP cash welfare coupled with the security of assets beyond a main residence. 

    @ DOCM

    Minister Burton was singing a different tune in Nov 2011. She is clearly reacting to her shaky political base:

    In 2001 spending on social protection stood at €7.84 billion; by last year this had grown to almost €21 billion – an increase of 266%. Inflation increased by around 30% during the same period.
    So while some of the expenditure increase is clearly due to the dramatic rise in unemployment since 2007, the most significant factor is a surge in both rates and the number and size of schemes over a very long period of Fianna Fail government.
    Frankly, the increases in social protection payments were often cynically timed to help Fianna Fail win elections. They were funded by tax revenues from the unsustainable property bubble.
    As a result, we have inherited a level of social expenditure that is completely out of sync with the funding base of the state. It is clear that we need to put it on a more sustainable footing.
    I don’t need to remind such a well-informed audience that the gap between what we as a government spend and what we raise in taxes is huge and that the hole is currently being plugged with money borrowed from our partners in the Troika.

    http://www.welfare.ie/en/pressoffice/Pages/Speech-by-Minister-for-Social-Protection-Joan-Burton-T.D.-t.aspx

  14. DOCM Says:

    @ MH

    The facts of the situation, unfortunately, do not change.

  15. Tullmcadoo Says:

    Paul W,
    What do you mean by charity for the “black babies”?

  16. David O'Donnell Says:

    @DOCM

    ‘… the Gini coefficient is meaningless.’

    must rank with your statement that the ‘capial-labor’ relation does not exist’ (still waiting on that epistle)

    BTW the BAU of the BBHF has constructed a profile of the DOCM UnSub - gratis to you on receipt of a stamped A4 envelope and full name and address to BAU c/o the fund.

    @Kevin Denny

    ‘…it would appear the author does not understand the meaning of “statistical significance”.

    Thank you for your negative aside of the month - bit late this month - maybe your Commodore 64 is acting up again?

    @Michael Hennigan

    A quarter of a million workers of certain age profile have nothing to look forward to for the rest of their lives except the dole and the state pension …

  17. Paul W Says:

    @ Tull
    Ireland has a long tradition of “PC about the distant misery of others”…Little ‘charity’ or action at home…In the old days, this national characteristic was expressed (and ‘mitigated’ in conscience) via donations to the missions in Africa. Concepts such as public service, society, etc. are not among the strengths of the Irish nation. The old Catholic practice of buying religious ‘indulgences’ is more prevalent in the nation’s make-up….Path of least resistence and effort is the Irish way socially. It has always been thus. The 2012 budget was a very visible manifestation of the underlying general lack of social morality in Ireland.

  18. DOCM Says:

    @ All

    FYI , the Economist on the fortunes - or misfortunes - of Italy.

    http://www.economist.com/news/leaders/21571891-europes-most-sluggish-economy-needs-more-mario-montis-reforms-who-can-save-italy

  19. DOCM Says:

    @ All

    Meanwhile, North of the Alps, Germany follows the wrong policy at the wrong time.

    http://www.ft.com/intl/cms/s/0/353e474a-7795-11e2-9e6e-00144feabdc0.html#axzz2L06jpzVb

  20. Tullmcadoo Says:

    Paul W,
    You are entitled to your opinions over there. However, I am surprised that you went for the fact Lite analysis of the Major Religious Superiors over the insightful analysis of the CSO.

  21. DOCM Says:

    @ All

    Deutsche Bank on the subject of “pain thresholds” in relation to the strength of the euro and a possible international currency war.

    http://xa.yimg.com/kq/groups/17389986/1473140226/name/Deutsche+Bank+Focus+Europe.pdf

    The position of Spain may come as a bit of a surprise. France and Italy are clearly the two economies with the biggest difficulties.

  22. David O'Donnell Says:

    worser worser and worst

    Eurozone crisis:
    Austerity plunges Europe into recession again
    15 February 2013 PresseuropL a Tribune, Diário económico, NRC Handelsblad & 4 others

    The latest statistics on the state of the eurozone economy indicate that, contrary to what political leaders have recently been saying, the crisis is far from over.

    The European press blames the economic shrinkage on austerity policies that prevail in most single currency states, with some newspapers advocating a change of course.

    “The eurozone has become a recession zone,” remarks La Tribune, which wonders on its front page, if “Europe has been sickened by austerity.” For the French business daily, the figures that were published on February 14 amount to a “Saint Valentine’s Day massacre” —

    The latest quarterly report of a 0.6 per cent decline in the wealth of the eurozone is the biggest slump since 1995 — in other words, since Eurostat began to keep statistics on the economic and monetary union.

    http://www.presseurop.eu/en/content/press-review/3417111-austerity-plunges-europe-recession-again

    Comment unnecessary.

  23. DOCM Says:

    All

    FYI an interesting discussion of the Caritas report on Down to Business.

    20130216_rteradio1-thebusiness-thebusines_c20156363_20156384_232_.mp3

  24. DOCM Says:

    http://feeds.rasset.ie/rteavgen/latest/?type=podcast&format=rss

  25. John Gallaher Says:

    @DOCM thanks for the links,read the Irish section hoping dining rest off report over the weekend.
    Difficult to decipher/reconcile the CSO numbers in the context of this.
    Mission fatigue does appear to be setting in,witty “Ross” article in today’s IT.

  26. Paul W Says:

    @ Tull
    I think the Caritas paper is a useful counterbalance to the CSO analysis. What I see in SC’s posting is his implicit argument that Ireland’s social policies are “least worst” among comparable PIIGS. However, that belittles how awful the absolute figures are and the realities for many in the country. The Irish commentary (and economists, official Ireland, etc) however loves the ’shelter’ of statistics and the like. My point is that, while Ireland thinks it is socially enlightened, that is just not true. Most people on the “I am alright Jack” don’t give a toss (as expressed by actions or lack of action, not PC words). I’m just observing that fact.

  27. Tullmcadoo Says:

    Paul W,
    Counterpoint or balance is probably a fair assessment. On one side we have the facts from the ESRI model, CSO data and the analysis of Coffey etc. On the other side we have the polemic from CMRS/CORI/SJI or whatever it calls itself now.

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