Safety net or sieve: Do Europe’s minimum income schemes reach the poor?

Abstract

Today, nearly all EU Member States have a national Minimum Income Scheme (MIS) providing a social safety net to their citizens. Still, not all European citizens actually receive minimum income support when in need of it. However, there is still no clear-cut evidence about the extent of and the reasons behind the gaps in the actual recipiency of last safety nets. In what is one of the most comprehensive contributions in terms of country scope and methodological rigor, we investigate MIS’ recipiency in Europe and the beneficiaries’ profiles at the micro-level, focusing also on the pre-transfer poor population left uncovered from any income support. We also ask if those confronted with what we could label “new social risks” are overrepresented among minimum income recipients and among the uncovered. First, we show that the share of pre-transfer poor individuals effectively covered by means-tested income support varies a lot, with coverage ranging from under 5% of the pre-transfer poor population to upwards of 60%. While one would assume that MIS coverage rates are largely determined by the reach and adequacy of social insurance arrangements, that picture is not as simple. In fact, large swathes of the needy are uncovered by either type of scheme. The share of pre-transfer poor individuals who are left uncovered by both social insurance and social assistance ranges from less than 20% to almost 90%. A large share of social assistance recipients experiences what one could call new social risks, namely low-education, non-standard employment, and, to a lesser extent, foreign citizenship and single-parenthood. Among those not reached by last resort income protection, young and non-standard employed people stand out. Yet patterns are not very consistent, pointing to manifold national idiosyncrasies in coverage mechanisms.