Are rural households poorer than non-rural households in Europe?: Fid-Bau Portal

Are rural households poorer than non-rural households in Europe?

Meloni, Cesare / Grazini, Chiara / Marino, Maria / Rocchi, Benedetto / Severini, Simone

Abstract A significant amount of political support is directed towards promoting the development of rural areas in Europe. One reason is that rural households are perceived as having a lower income than non-rural ones. However, empirical evidence on the income differential between rural and non-rural areas in Europe is hard to find and incomplete. The present study aims to fill this gap by answering the following research questions: is there an income gap between rural and non-rural households in Europe? If so, what is its magnitude, and does this gap vary based on the country's income level? Does the inclusion of non-monetary sources of income contribute to mitigating the extent of this gap? The empirical analysis relies on the EU Statistics on Income and Living Conditions (EU-SILC) database, a survey that combines registered sources and direct interviews, providing a wide range of monetary and non-monetary variables. The analysis contributes to the literature, providing evidence that rural households have a lower income than non-rural ones. Furthermore, it reveals that this gap declines when the level of the country's income increases and that the inclusion of non-monetary components of income appears to play a role in reducing the extent of this gap.

Highlights • The income of rural households is lower than that of non-rural households in 21 of the 25 considered European countries. • On average, the income gap is around 10% but a large heterogeneity exists among countries. • The extent of the income gap is negatively correlated with the average income level of the country. • The analysis by macro-group confirms what emerged in the analysis of individual countries. • The non-monetary income components appear to reduce the income gap to some extent.