Study title

The aim is to investigate causal mechanisms of poverty reproduction in the EU. The main emphasis is placed in investigating whether, in what way and to what extent certain characteristics of parental background impact upon an individual’s poverty risk in adulthood. A distinctive feature of the analysis is the statistical control of endogeneity among the observable and non-observable effects of the involved mechanisms. By doing so, it accounts for approximately half of the otherwise unexplained variation in the response variable. The methodology of the analysis is based on a recursive path model, which is constructed under the standardized solution and is adjusted for four clusters in welfare (i.e. Conservative, Liberal, Social-democratic and South-European). The empirical analysis utilizes microdata from the EU-SILC 2011 module on the intergenerational transmission of disadvantages. Hence, it relies on the use of proxies of parental background, such as father’s education and occupation, to compensate for the lack of parental income data. The countries under investigation comprise the old EU member states except for Luxembourg (which is left out of the analysis as an outlier). The empirical findings indicate a pretty strong association between parental background and an offspring’s poverty risk in all welfare clusters except for the social-democratic one where this association is rather negligible. However, the analysis shows that there is hardly any direct causal effect of parental background on an individual’s poverty risk in the EU-14, but there are various indirect effects through individual characteristics. By segregating the analysis based on welfare clusters, however, it appears that there is no statistically significant direct effect in the social-democratic one. On the contrary, the south European and the liberal welfare regime exhibit a statistically significant and quite strong direct effect. The conservative welfare regime stands in between based on...