Causal dynamics of poverty reproduction in the EU

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 that criterion. These findings are expected to enrich the academic discourse and inform the policymaking process on poverty reproduction and social protection in the EU.