Changes in the Dependence Structure of AROPE Components: Evidence from the Spanish Regions

Abstract

The AROPE rate is a multidimensional indicator to monitor poverty in the European Union which combines income, work intensity and material deprivation. However, it misses the possible relationship between its components. To overcome this drawback, some authors proposed to complement the AROPE rate with measures of the dependence between its dimensions, since higher dependence can exacerbate poverty. In this paper, we follow this approach and measure such dependence in the Spanish regions over the period 2008-2018 using three multivariate versions of Spearman’s rank correlation coefficient. Our results reveal an asymmetric effect of the economic cycle on the dependence between poverty dimensions, as this dependence, in many Spanish regions, substantially increased during the Great Recession but dropped little during the economic recovery. Moreover, regions with higher AROPE rates also tend to experience more dependence between its dimensions.