Studying poverty and problematic debts using the LISS panel

April 2024 – Ernst-Jan de Bruijn

Conducting empirical research on poverty and problematic debts in the Netherlands is challenging. Data sources usually contain only a limited range of relevant measurement instruments or are based on one-time measurements. This complicates the conduct of scientific research. Fortunately, the LISS panel is a positive exception to this. Since 2007, data has been collected annually within this panel at the individual and household levels on various life domains, including various aspects of poverty and problematic debts. Perfect for longitudinal research!

In this blog post, I provide an overview of measurement instruments from the LISS panel that can be used for research on poverty, financial stress, and debt. The associated data are not only available (for free!) to researchers conducting scientific or policy-relevant research but also to students conducting empirical research for their Bachelor’s or Master’s thesis. For several years now, I have been supervising bachelor students writing their thesis within the capstone ‘Poverty, Debt, and Policy’ using data from the LISS panel.

LISS Panel

The LISS panel collects data from a large panel of 7,500 individuals aged 16 and over from 5,000 households. When assembling the panel, explicit attention has been paid to its representativeness for the Dutch population. The panel has thus served as the basis for numerous scientific publications.

The LISS panel contains data on various life domains, ranging from work, income, housing, and household composition to health and well-being, religion, political preferences, and social integration. In addition to the core variables (Core study) that are requested annually or sometimes biennially, the LISS panel offers various additional options. For example, it is possible to add questions to the panel for a fee or to use additional data collected for other research. Finally, it is even possible to link data from the LISS panel to CBS microdata within the secure CBS remote access environment, which is ideal for linking objective data to subjective information.

Interested? Here you can find more information about the LISS panel in general, the available variables, and gaining access.

Measurement instruments: Poverty

Figure 1 provides an overview of the available measurement instruments for measuring absolute and relative poverty. Determining absolute and relative poverty requires, in addition to information on income, information on the corresponding poverty thresholds. Absolute poverty in the Netherlands is often measured using two approaches: (1) The low-income threshold (CBS) using equivalence factors and (2) the generalized budget approach (SCP). The SCP approach distinguishes between the basic needs budget and the not-much-but-sufficient criterion. For measuring relative poverty, the at-risk-of-poverty rate (AROP) approach from Eurostat is often used.

Figure 1. Absolute and relative poverty

LISS also contains useful measurement instruments for subjective poverty, such as financial scarcity and making ends meet (see Figure 2).

Figure 2. Subjective poverty

Measurement instruments: Debts

The LISS panel contains some variables on debt amounts and arrears in payment (see Figure 3). It is good to know that some variables are requested biennially instead of annually.

Figure 3. Debts

Measurement instruments: Other

Finally, the LISS panel contains data on various other useful constructs related to the financial situation, ranging from financial vulnerability to savings and from changes in the financial situation to financial concerns. See Figure 4 for an overview.

Figure 4. Other measurement instruments

Final remarks

Linking datasets from different years and domains is labor-intensive. Fortunately, my colleague Jordy Meekes has written handy Stata codes that can help you with this. Additionally, ODISSEI has a useful library with relevant R, Stata, and Python codes.

Do you want to know more about the quality of certain measurement instruments? Does the LISS panel contain relevant measurement instruments not listed in the overview? Do you have any other questions? Feel free to contact me!

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