Household Income Packaging in the European Union: Welfare State Income and Welfare Regime

Comparative studies focusing on the way in which household income is constructed as a package from different sources have produced important insights into the influences at work and the implications for household living standards. The availability of data from the European Community Household Panel survey (ECHP) now allows us to apply this perspective across the member states in a harmonized way for the first time. Using data from the third wave of the ECHP, the nature of the income package for different types of households, and in particular the role of social transfers, is analysed and differences across countries and welfare regimes brought out. The determinants of the shape of the income package and the role of social protection at household level are studied, and the extent to which these effects operate in the same or different ways across countries and welfare regimes is examined. The implications for living standards are then assessed by considering not only the effectiveness of such income in alleviating income poverty but also through an examination of the relationship between dependence on welfare state income and life-style deprivation.