How does attrition affect estimates of persistent poverty rates? : the case of European Union statistics on income and living conditions (EU-SILC) : 2017 edition

Among the primary indicators of social inclusion is the persistent at risk of poverty rate, defined as the proportion of persons in a country who are at risk of income poverty in the current year and who were at risk of income poverty in at least two of the preceding three years. Evidence about poverty persistence is an important complement to information about poverty prevalence at a point in time. Estimates of persistent at risk of poverty rates are derived from the longitudinal component of EU SILC in which the fortunes of individuals are tracked over four consecutive years, in principle. In practice, not all of the individuals present in the first sample year provide four years of income data: there is attrition and estimates of persistent at risk of poverty measure may therefore not be reliable. Rates of attrition from the four-year EU-SILC samples used to calculate persistent poverty rates vary substantially across Member States, and there is also substantial cross-national diversity in the characteristics of individuals lost to follow-up. This working paper documents such patterns in detail and provides evidence that application of longitudinal weights does not fully account for the effects of attrition, and that different assumptions about the poverty status of attritors lead to wide bounds for estimates of persistent poverty rates for most Member States.