Large families and poverty in Austria: What explains their disproportionate risk of experiencing income poverty?

Abstract

In many countries, large families with three or more children have high income poverty rates. In this article, we aim to understand why this is the case by examining the relevance of family structure, socio‐economic characteristics, and welfare state transfers targeted at this family form. For our analyses, we use cross‐sectional data from three waves (2017–2019) of the Austrian European Union Statistics on Income and Living Conditions dataset. Our results, based on descriptive statistics, logistic regressions, and decomposition analyses, confirm the higher poverty risk of large families compared with smaller families. However, when differentiating between poor and non‐poor families, it is not the family type that seems to be relevant in explaining the poverty risk, but rather the parental work intensity, the age of the youngest child, the place of residence, being a single‐parent household, and the parental migration background. Moreover, cash transfers from the welfare state, in particular family benefits, contribute to reducing poverty for a significant number of large families. Policy makers are therefore well advised to either further increase the cash transfers targeted at large families, and/or to improve the employability and ultimately the work intensity of parents in large families in order to reduce their income poverty risk.