Weekly Briefing, Vol. 40, No. 3 (BG), May 2021
A New Data for the Bulgarian Poverty and Social Inclusion
Summary
Three weeks ago, the Bulgarian National Statistical Institute published official data on the levels of poverty and social inclusion among the Bulgarian population for 2020. The data show that last year the poverty line for the country was BGN 363 on average per month per household member. Below the poverty line were 1,659,900 people or 23.8 percent of the population. Compared to the previous year, the size of the poverty line increased by 9.2 percent, and the relative share of the poor population – by 1.2 percentage points. The government has set the poverty line for 2021, which will amount to BGN 369 – BGN 6 higher than in 2020. At the same time, it is clear that BGN 2,504 per month are needed for a family to live a normal life. The pandemic puts more people at risk of poverty. In 2020, 19.4% of the population lives in material deprivation.
Within the EU, it is accepted that the share of the poor is measured by a poverty line. Its amount is determined annually depending on the change in income throughout society. That is why we are talking about relative poverty (relative to the level of income in a society), and not absolute poverty, based on the amount needed to meet basic living needs. Every year the Bulgarian National Statistical Institute publishes a document called “Poverty and social inclusion indicator”. These documents are part of the general EU indicators for tracing the progress in the field of poverty and social inclusion. Main source of statistical data on which basis the indicators are calculated is the annually conducted Survey on Income and Living Conditions (EU-SILC).
According to the last published “Poverty and social inclusion indicator” people living below the poverty line in Bulgaria reach 1,659 million people or 23.8% of the country’s population. The average amount below which a person is considered poor in Bulgaria is BGN 451 per month per household member, according to data from the National Statistical Institute for 2020. The poverty line increased compared to 2019 by 9.2%, while the relative share of the poor population increased by 1.2 percentage points. For comparison, in 2019 the poor in our country amounted to 1.586 million people or 22.6% of the population.
Main poverty indicators
| 2016 | 2017 | 2018 | 2019 | 2020 | |||
| At-risk-of-poverty threshold (monthly average in BGN) | 308.2 | 351.1 | 351.1 | 413.0 | 451.0 | ||
| Persons below at-risk-of-poverty threshold – in thousands | 1639 | 1665 | 1551 | 1586 | 1660 | ||
| At-risk-of-poverty rate (% of the population) | 22.9 | 23.4 | 22.0 | 22.6 | 23.8 | ||
| At-risk-of-poverty rate before social transfers (% of the population) | 45.5 | 44.8 | 45.2 | 42.2 | 41.7 | ||
| At-risk-of-poverty rate before social transfers with pensions included (% of the population) | 27.9 | 29.2 | 29.5 | 29.6 | 29.9 | ||
| Inequality of income distribution (S80/20) | 7.7 | 8.2 | 7.7 | 8.1 | 8.0 | ||
| Gini coefficient | 37.7 | 40.2 | 39.6 | 40.8 | 40.0 | ||
Source: Bulgarian National Statistical Institute[1]
The poverty line is different for each district in our country.
The main factor influencing the risk of poverty for the prevailing part of the population is the economic activity and participation in the labor market. For the observed period, the share of poor is highest among the unemployed (61.1% for the year 2020) and the risk of poverty for unemployed male is 12.3 percentage points higher than for unemployed female.
At-risk-of-poverty rate by most frequent activity status
Source: National Statistical Institute[2]
In 2020, the share of the poor among employed persons in the 18-64 age group increased by 0.7 percentage points compared to the previous year, to 9.7%. The risk of poverty is four times higher for persons working part time than for those working full-time. At the same time, the risk of poverty among female is 2.1 percentage points lower than among male.
Educational level influences considerably the risk of poverty for employed. Highest is the share of working poor with primary and without education – 65.7%. The increase of educational level decreases the share of poor among employed with primary education about 2 times and more than 8 times for those with secondary education. The share of working poor with tertiary education is the lowest – 2.4%.
The risk of poverty for people with primary and no education is 31 times higher than the risk of poverty for people with higher education for the Bulgarian ethnic group and 11 times for the Turkish ethnic group. Among those who identify themselves as part of the Roma ethnic group – nearly 70% with primary and no education are poor, while among people with higher education there is not a single poor person.
The level of education has a strong influence on the risk of poverty regardless of ethnicity – in all three main ethnic groups, as the level of education increases, the risk of poverty for working people decreases.
Poverty among the population differs when it comes to different ethnic groups.
The relative share of the poor among the self-identified as part of the Roma ethnic group is the highest in the country – as much as 66.2%. The lowest share is observed among the Bulgarian ethnic group – 17.8%. The share of the poor among the Turkish ethnic group reaches 29.5%. Among the other groups defined by the National Statistical Institute as “other”, the share of relative poverty reaches 12.7%.
There are significant differences in the distribution of the poor from different ethnic groups according to their economic activity. Among the poor of the Bulgarian and Turkish ethnic groups, retired people prevail (56.6 and 36.5%, respectively), while among the Roma ethnic group highest is the share of employed -28.9%. Regarding unemployed, highest is the share of poor among Roma ethnic group – 31.6%, compared to 16.5% among Turkish and 10.4% among Bulgarian ethnic groups.
The general indicators of poverty assessment include subjective indicators related to material deprivation. They show the subjective assessment and personal attitude of the persons and households related to the possibility to meet individual needs. Data show that the highest number of persons claim that they cannot afford unexpected required expenses with own resources – 43.5%. Cannot afford going for a week’s annual holiday away from home 39.3% of respondents and 27.5% cannot keep their home adequately warm. The part of the households that have restrictions on housing-related expenses is 23.6%. In 2020, 19.4% of the population live in severe material deprivation.
Limitations connected to satisfaction of certain needs and necessities differ among separate ethnic groups. Severe material deprivation is observed in 13.8% of the Bulgarian ethnic group, in 20.4% of Turkish and 62.0% of Roma ethnic group.
In 2020, 28.3% of children aged 0-17 in Bulgaria are at risk of poverty, or 0.8 percentage points more than in 2019. Social transfers to households reduced the risk of child poverty by 10.3 percentage points. The educational degree and the profession of the parents are an important factor for the future development of the children. The higher educational level creates opportunities for better access to labor market and higher remuneration. In 2020, parents of every eighth of ten children at-risk-of-poverty (84.1%) are with primary and no education. Nearly 18 times less or 4.7% of children living in households where parents have high level of education were at-risk-of-poverty. The risk of poverty among children whose parents are with secondary education is seven times higher than for those whose parents are with tertiary education.
In 2020 the share of children with material deprivation is 38.5% and for 3.3% of children not a single need can be satisfied due to financial reasons. Around one third of the children (31.7%) cannot afford one-week holiday per year (including family holidays, visiting relatives, friends, organized by the school vacation, etc.); equipment for outdoor games (bicycle, skates, etc.) – 29.8% and 27.3% – regular swimming, playing musical instruments, participation in youth organizations, etc.
In conclusion there must be noted that the government has determined the poverty line for 2021, the amount of which will be BGN 369 – BGN 6 higher compared to 2020. The amount is in accordance with the Methodology for determining the poverty line for the country. The set amount of BGN 369 reflects the consumption of the lowest income groups of the population and the price index of the small “basket” and is related with the reduced economic growth and the budget expenditures undertaken to overcome the economic and social consequences of the coronavirus.
With the definition of the poverty line of BGN 369 for 2021, the financial support for about 670 thousand people with permanent disabilities will increase by 1.9% and will maintain its purchasing power with an expected inflation of 0.1% in 2020.
Meanwhile, the cabinet decided that 2,119,256 pensioners would receive a supplement of BGN 50 to their pensions at least until the autumn. The additional amount will be paid to all retirees, regardless of the size of their pensions.
It must be noted also that the analyses shows that the social protection system contributes to some extent to the poverty decrease. According to 2020 data, if the income from pensions is included into the household’s income and the rest social transfers are excluded, (allowances, social and family benefits and supplements) the poverty level increases from 23.8% to 29.9%, or by 6.1 percentage points. Respectively, if the pensions and the rest of the social transfers are excluded, the poverty level increases up to 41.7%, or by 17.9 percentage points.
This gives hope that the Bulgarian social system still fulfills, albeit partially, its main functions. On the other hand, the problem of poverty and social inclusion remains extremely worrying and threatens total social collapse if it is not reduced to much lower percentage levels of the population.
[1] https://www.nsi.bg/sites/default/files/files/pressreleases/SILC2020_FRTG25T.pdf
[2] https://www.nsi.bg/sites/default/files/files/pressreleases/SILC2020_FRTG25T.pdf