Country-level Drivers of Severe Material Deprivation Rates in the EU

The severe material deprivation rate indicates the proportion of the population that cannot fulfil at least four of the nine needs identified as basic ones in the European conditions. Due to being an absolute measure, it is very useful for cross-country comparison. This study attempts to identify country-level factors affecting severe material deprivation rate by the use of the GEE methodology which enables to analyse correlated fractional outcome data. It is found that severe material deprivation rate is affected by such factors as: median equivalised disposable income, relative median at-risk-of-poverty gap, long-term unemployment rate, GDP per capita and share of social protection expenditure in GDP. Results reveal that GEE models with cloglog link function exhibit the best goodness of fit. Due to these models imposing non-constant marginal effects, therefore, changes of the severe material deprivation rates depend on levels of country-level factors.