Non-Standard Work, Low Pay and Poverty in Europe: Patterns of Redistribution within and across Households

In recent decades European welfare states have undergone massive change, were facing increased global competition as well as economic and financial crisis. As a result, many countries saw a deterioration of labour market positions with a widening of the segment of non-standard and low-paid employment relationships. The paper addresses how these developments have contributed to changes in the distribution of labour market earnings and in the patterns of redistribution within and across households.

The relationship between non-standard work, low wages and poverty is an aspect of the more general distributional question how an individual labour market position translates into well-being at the household level. A direct link is to be expected when single earnership is the rule and no other sources of income but the earnings of the ‘household head’ are available. But these conditions differ across countries and are subject to social change, in particular to transformations affecting the patterns of family living, the gendered division of labour and the tax/transfer system. In the welfare states of the late 20th and early 21st century a complex link between work and poverty has evolved as not only earnings of a ‘household head’ contribute to a household’s income package, but also a partner’s or other household members’ earnings, public or private transfers and other incomes.

The paper takes a multilevel perspective to identify the impact of macro-level characteristics on micro-level outcomes. Based on the EU Statistics on Income and Living Conditions (EU-SILC 2004-2015; two-way fixed effects and random coefficient models) it provides an analysis of three types of incomes (individual earnings, pre- and post-tax/transfer household income) which show how structural and institutional factors shape the distribution of labour market earnings and patterns of redistribution within and across households.