Relative-importance Analysis of Material and Social Deprivation Across European Countries

We investigate the relative importance of the socioeconomic characteristics of households associated with the risk of material and social deprivation. The methodology is based on sequential R2 decomposition and cluster analysis approaches, applied to 27 European countries in 2023. Household data come from the European Union Statistics on Income and Living Conditions survey. Our analysis of relative importance reveals that household disposable income accounts for approximately 20% of the variance in deprivation on average, meaning that the remaining 80% of the variability is explained by non-monetary factors. Among the key non-monetary factors, we identify household composition, education, and age. Finally, our cluster analysis suggests that while the Nordic welfare regime is relatively effective in reducing material and social deprivation, further efforts are needed across the rest of Europe. Governments should take the relative importance analysis into account when considering potential measures to decrease the number of factors associated with the risk of deprivation. This latter suggests the need for integrated interventions, encompassing housing, care services, education, and labor market participation.