Explaining levels of deprivation in the European Union

In this paper we seek to explain variations in levels of deprivation betwee n EU countries. The starting-point of our analysis is the finding that the relationship between income and life-style deprivation varies across countr ies. Given our understanding of the manner in which the income-deprivation mismatch may arise from the limitations of current income as a measure of c ommand over resources, the pattern of variation seems to be consistent with our expectations of the variable degree to which welfare-state regimes ach ieve 'decommodification' and smooth income flows. This line of reasoning su ggests that cross-national differences in deprivation might, in significant part, be due not only to variation in household and individual characteris tics that are associated with disadvantage but also to the differential imp act of such variables across countries and indeed welfare regimes. To test this hypothesis, we have taken advantage of the ECHP (European Community Ho usehold Panel) comparative data set in order to pursue a strategy of substi tuting variable names for country/welfare regime names. We operated with tw o broad categories of variables, tapping, respectively, needs and resources . Although both sets of factors contribute independently to our ability to predict deprivation, it is the resource factors that are crucial in reducin g country effects. The extent of cross-national heterogeneity depends on sp ecifying the social class and situation in relation to long-term unemployme nt of the household reference person. The impact of the structural socio-ec onomic variables that we label 'resource factors' varies across countries i n a manner that is broadly consistent with welfare regime theory and is the key factor in explaining cross-country differences in deprivation. As a co nsequence, European homogeneity is a great deal more evident among the adva ntaged than the disadvantaged.