Assessing social vulnerabilities from a demographic and a lifecourse perspective

The substantive core of the social investment policy paradigm is increasing and maintaining human capital “stock” throughout the lifecourse. In particular, the intersection between the work and family strands of the lifecourse can lead to the emergence of vulnerabilities in old age. The transition to adulthood and childbearing decisions can also lead to diversified employment paths. Access to power resources, such as in-kind benefits in the areas of childcare and family and training and education, combined active labour market policies, can improve the resilience of the welfare state, as reflected in a reduction in the risks posed by vulnerabilities accumulated over the lifecourse.

In this working paper, we assess the risk of social vulnerability at older ages, and analyse it by investigating the effects of the employment and the child domains on the lifecourse. In our analysis, we consider the indicators of the Social Scoreboard, which reflect the various risks of vulnerability over the lifecourse, as well as their potential impact on the risk of economic vulnerability in old age. To that end, the events in the lifecourses of Europeans before ages 50+ are analysed and compared with the vulnerabilities of these same individuals at a later stage of life. The microdata from SHARE LIFE data (wave 7) are used. We examine the lifecourse histories of individuals by focusing on two kinds of events: changes in their work status (employed full time, employed part time, not working), and changes in their family career, as measured by the number of children in their family (no children, one child, two children, three or more children).

To deal with the complexity of the types of work and family careers individuals have, we use the sequence analysis technique, which allows us to assess to what extent people’s lifecourses are similar. We select some of the most typical sequences of events in people’s lifecourses, and then assess the extent to which the lifecourses of all individuals differ from these reference sequences. Then, based on the calculated differences between individuals, we group them into clusters (based on a quintile distribution). In the case of family lifecourses, we observe in the last two clusters a tendency to transition quickly to having two or more children, which is also combined with reduced labour market activity.

These clusters are used as explanatory variables in the logit regression models. These models explain the variable that approximates the poverty risk in old age, which is related to the ability to make ends meet. In the model, we also control for individual characteristics (gender, educational attainment, household composition, country, and groups of countries according to their social investment strategies). Our results indicate that the lifecourse characterised by a rapid transition to having two and more children, combined with spending long periods of time outside the labour market, leads to an increased risk of vulnerability in old age, particularly in countries with stripped-down social investment strategies characterised by a reliance on family childcare and no legal guarantee of access to childcare.

We also further deepen the results by comparing the country regression coefficients with the intragenerational transfers received by women. We find that the magnitude of intragenerational transfers is not associated with the symptoms of economic stress.

We conclude with some policy recommendations focused on ensuring access to instrumental resources for the most vulnerable groups to reduce their risk of experiencing economic stress at older ages, both at the national and EU level.