Poverty Dynamics in Europe

Understanding poverty dynamics is crucial for designing effective and context-sensitive policy interventions, yet such analysis remains limited due to the scarcity of high-quality longitudinal data. This thesis addresses this gap by applying and evaluating a synthetic panel method using the EU Statistics on Income and Living Conditions (EU-SILC), a large-scale survey that primarily provides cross-sectional data. In Chapter 1, the accuracy of this synthetic panel technique is assessed by comparing its estimates with those derived from actual panel data. The findings demonstrate that, under appropriate assumptions—particularly regarding the distribution and correlation of model residuals—synthetic panel estimates can closely approximate true poverty transitions, offering a credible alternative where panel data are limited or unavailable. Building on this validation, Chapter 2 applies the synthetic panel approach to examine the role of parental background in shaping poverty dynamics across European countries, revealing a clear intergenerational gradient in poverty persistence and mobility. Chapter 3 extends the analysis to long-run poverty dynamics in newer EU member states, highlighting substantial cross-country and within-country heterogeneity, as well as the importance of education and household composition in influencing poverty transitions. Together, the findings demonstrate the value of synthetic panel methods for uncovering dynamic patterns of poverty and provide new insights into intergenerational disadvantage and regional disparities within the European Union.