IMPACT OF EQUIVALENCE SCALES ON POVERTY MEASURES IN THE EU MEMBER STATES

The goal of this paper is to analyse the influence of equivalence scales on poverty rates across EU countries. The previous studies suggest a question whether a single equivalence scale should be used for all EU member states, or different methodologies should be applied across different countries. In this paper a number of combinations of adult/child household members' weights to a linear type equivalence scale is simulated to 2005, 2008 and 2011 EU SILC microdata. According to the results, relative impact of adults' weights is stronger than relative impact of children's weights in most of the EU countries. The results further indicate that the shape of poverty rate distribution depends on structure of households in the economy. Different shapes of poverty rates distribution across the EU countries might be an indication of reconsidering common equivalence scales for all EU countries, and possibly substituting them by country-specific equivalence scales.