B1262
Title: Contagion of deprivations and affluences: A tail dependence story
Authors: Cesar Garcia-Gomez - Universidad de Valladolid (Spain) [presenting]
Fabrizio Durante - University of Salento (Italy)
Ana Perez Espartero - University of Valladolid (Spain)
Mercedes Prieto-Alaiz - University of Valladolid (Spain)
Abstract: Welfare and related phenomena such as poverty and inequality are multidimensional, involving income and other non-monetary aspects such as health, education or labor status. Hence, to appropriately account for the multivariate nature of these phenomena, it is necessary to measure the potential interdependence between their dimensions. The focus is on the concept of multivariate tail dependence, which allows the study of contagion of deprivations and affluence in a society, that is, the risk that an individual who is poor (rich) in one dimension is also simultaneously poor (rich) in the rest of the dimensions considered. In the empirical application, the multivariate tail concentration function (TCF) is used to analyze the evolution of tail dependence between welfare dimensions in the EU-28 from 2008 to 2018. Several conclusions emerge. First, there is a risk of contagion of both deprivations and affluence in the EU-28. Second, the risk of contagion of deprivations is higher than the mirrored risk of contagion of affluence. Third, in most countries, the risk of contagion of deprivations significantly increased after the Great Recession but did not decrease substantially during the economic recovery, suggesting an asymmetric effect of the economic cycle on the risk of contagion of deprivations.
