What does it mean to live on the poverty threshold? Lessons from reference budgets

This chapter makes use of the first effort to construct cross-country comparable reference budgets in Europe to show what the large cross-national differences in living standards imply in practice for the adequacy of incomes at the level of the at-risk-of-poverty threshold. The budgets show that, in the poorest EU Member States, even adequate food and housing are barely affordable at the level of the threshold, whereas a decent living standard is much more in reach for those living on the threshold in the richer EU Member States. The reference budgets also suggest that the poverty risk of some groups (for instance, children) is underestimated relative to that of other age groups, while the poverty risk of homeowners is probably relatively overestimated.