I. General context

Considering the complexity of poverty, a wide range of indicators is used internationally to analyse it. Thus, poverty can be measured based on monetary aggregates, such as consumer spending or income, but also using non-monetary indicators and multidimensional approaches. In the Republic of Moldova, monetary poverty is calculated using the absolute poverty measurement method, based on household consumption expenditure collected by the National Bureau of Statistics (NBS) through the Household Budget Survey (HBS). Following user requests, in line with international best practices, this approach has been supplemented with the measurement of multidimensional poverty¹, which provides a more comprehensive perspective on non-monetary deprivation and contributes to a better understanding of poverty in the country.

For a more comprehensive analysis of poverty, taking into account the recommendations of Eurostat (the Statistical Office of the European Union (EU)), in order to provide national and international users with relevant, reliable, and comparable information at the European level, the NBS has launched the development of experimental calculations for estimating relative poverty by calculating the at-risk-of-poverty rate.

In line with international best practices, experimental statistics produced by the NBS are new, innovative statistics that are currently under development, including in the evaluation phase. Experimental statistics are developed to inform users about the results obtained during the development of new statistics, which are currently being developed and tested, as well as to engage users in assessing their necessity and quality at an early stage of development. 

The development of experimental statistics is recommended by Eurostat, as it enables statistics producers to better understand the relevance and usefulness, as well as other dimensions of the quality of statistics under development, such as their accuracy and reliability, clarity for statistics users, and greater transparency in the performance of statistical activities.

In this context, the information presented below represents the initial result of the experimental statistical work to estimate the at-risk-of-poverty rate, carried out in accordance with the methodology applied at EU level.

II. Data source and method for estimating relative poverty based on the risk of poverty

At European Union level, the basic tool used to produce statistics on income distribution, living conditions, and social inclusion, and the data source for calculating the at-risk-of-poverty rate, is the European Survey on Income and Living Conditions (EU-SILC).

Relative poverty is understood as the situation of a person whose monetary resources do not allow them to achieve a certain level of well-being enjoyed by the entire population of that country. Thus, Eurostat and EU countries use the relative method to measure poverty, choosing this approach for two main reasons:

• ensuring the highest possible standard of living for all citizens, commensurate with the level of economic and social development of each state, not just a minimum standard of living;
• the existence of considerable disparities between the stages of development of different countries, which makes it very difficult to define a minimum standard of living that is unanimously acceptable at European level.

According to this estimation method, individuals whose monetary resources are lower than the rest of the population are identified, which does not automatically mean that these individuals' resources do not allow them to cover a minimum standard of living (which would imply poverty in its simplest sense). For this reason, at EU level, indicators of relative poverty are referred to as "at-risk-of-poverty" indicators.”.

In the Republic of Moldova, basic research for poverty assessment consists of Household Budget Survey (HBS), which is also used to measure absolute poverty and multidimensional poverty. CBGC has a number of differences from the EU-SILC survey conducted at EU level, which affects the comparability of the indicators resulting from the two surveys. In order to harmonize national statistics with the quality standards established at EU level, the implementation of the new survey, in accordance with the EU-SILC methodology, is planned for 2027.

EU-SILC is a multifunctional tool that focuses mainly on household income, collecting detailed data on the income of household members. In the absence of EU-SILC, the NBS carried out an experimental measurement of the poverty risk rate indicator based on CBGC data. At the same time, testing the method for calculating the poverty risk rate is also a step towards preparing for the development and implementation of EU-SILC in Moldova and exploring the information needs of national data users.

Methodological differences in the data source: An important limitation of experimental calculations lies in differences in the method of collecting data on population income. Within the EU-SILC survey, in accordance with EU regulations (in particular EU Regulation 2019/1700) income is collected for a whole year – usually for the calendar year preceding the year in which the data is collected. In the national HBS, data on household income is collected for the reference month of the interview, accompanied by retrospective questions for some types of income.

In addition, the EU-SILC survey also uses relevant administrative data sources for measuring household income in order to analyze and supplement the data collected in the field.

Therefore, the use of CBGC data to estimate indicators calculated at European level (based on EU-SILC data and using administrative data sources) involves a methodological limitation, and the data must be analysed and interpreted with caution.

III. Concepts and definitions

Adult-equivalent – conventional unit that transforms the composition of a household according to the age of its members. The transformation is based on an equivalence scale, which in common practice is the modified OECD scale, with the following coefficients

• 1,0 for the first adult in the household;
• 0,5 for the following adults (persons aged 14 and over));
• 0,3 for children up to 14 years of age.

Disposable income per adult-equivalent is the disposable income divided by the number of household members expressed in adult equivalents.

Poverty risk line (including social transfers) represents the level of disposable income per adult equivalent, in relation to which a person (with an income below the threshold) can be considered poor. The threshold level represents 60% of the median value of the distribution of persons by disposable income per adult equivalent.

Poverty risk rate (including social transfers) represents the share of people whose disposable income per adult equivalent is below the threshold set at 60% of the median disposable income of the total population. This indicator is sometimes also referred to as the "relative poverty rate" after social transfers. (AROP).

Social transfers are amounts received by the population from the state in the form of social protection and include: old-age, disability, and survivor pensions; social allowances; incapacity benefits; one-off benefits (for childbirth, in the event of death); allowances for the care/upbringing of children up to the age of 2.0/3.0 years; social assistance; monthly state allowances; scholarships; etc.

Disposable income of a household represents the total monetary income earned by all members of the household from any lawful source (salaried activities, self-employment, pensions and other social transfers, property income, etc.) from which transfers paid have been deducted.

Paid transfers include: taxes on income of any kind and other taxes, social security contributions, health and other contributions, transfers from and to other households and individuals (alimony, various mandatory payments established by law to individuals and households).

IV. Method for calculating the at-risk-of-poverty rate

Main steps of the calculation of the poverty risk rate, based on an example, is presented below:

1. Calculation of disposable income per adult equivalent for each household

1.1. The total disposable income of the household is calculated:

The household consists of 2 adults and 2 children (aged 5 and 10).

Sources of monthly household income:

Net salary (first adult) – 5000 lei.

Income from consulting services (second adult) – 2400 lei

Total disposable income of the household = 5000 + 2400 = 7400 lei

1.2. The equivalent size of the household is calculated:

The modified OECD equivalence scale applies:

First adult = 1,0

Second adult = 0,5

First child = 0,3

Second child = 0,3

Equivalent household size = 1,0 + 0,5 + 0,3 + 0,3 = 2,1

1.3. The disposable income per adult equivalent in the household (equivalent income) is calculated):

Calculation of equivalent income:

2. Analysis of the distribution of equivalent household income and determination of median income

2.1. All households are ranked according to equivalent income:

For example, we have 9 households with the following equivalent monthly income (in lei), sorted in ascending order:

2.2. The median income is determined:

In an odd set of 9 values (including 9 households), the median is the middle value (which corresponds to the 5th household)

• Median (5875,0 lei) – is the exact value in the middle of the sorted data set, which means that 4 households have lower incomes and 4 households have higher incomes than the median.
• The median differs from the mean (average value) – being more resistant to extremes (such as the income of 30,250.5 lei for household 9), which makes it a more suitable indicator for analysing income distribution and calculating the relative poverty line.

3. Calculation of the poverty risk line

3.1. The poverty risk level is calculated as 60% of the median income:

Poverty risk line = 0.6*Median income

The poverty risk threshold (in our example) =0,6*5875,0=3525,0(lei)

Identifying persons below the poverty risk threshold and calculating the poverty risk rate

4.1. The number of people below the poverty risk line is calculated:

• The equivalent income of each person in the dataset is compared to the poverty risk line.

• The number of people whose equivalent income is below the poverty risk line is calculated. In our case, 5 out of 24 people are at risk of poverty.

4.2. The poverty risk rate (or relative poverty rate) is calculated as follows

V. Results of experimental calculations regarding the poverty risk rate in the Republic of Moldova

Table 1. Poverty risk line, 2014–2024, lei

Table 2. Poverty risk rate, 2014–2024, %

VI. Further activities planned for the development of experimental calculations regarding the at-risk-of-poverty rate in the Republic of Moldova

• Consulting users' opinions on experimental calculations, including methodological aspects
• Development of statistical tools and implementation of EU-SILC research in the Republic of Moldova, in accordance with EU Regulation 2019/1700 including:
  • piloting survey in 2026;
  • implementation, with annual data collection - starting in 2027;
• Developing a methodology/regulatory framework for measuring poverty in the Republic of Moldova, taking into account EU standards and best practices (2026-2027).
• Consulting users' opinions on the development of poverty indicators based on the new/updated methodology and additional data sources, including EU-SILC research data.

Please send your comments and suggestions to moldstat@statistica.gov.md, by July 1, 2025.

Your opinions will be an important benchmark for the NBS's future work in this area.

Useful references on relative poverty:

• EurostatData Browser

Note:

 ¹ In accordance with Government Decision No. 897/2024, the development of multidimensional poverty indicators was included in the Statistical Work Program for 2025, having previously been part of experimental statistics. For more details on measuring multidimensional poverty, please visit the NBS website under Experimental Statistics / Measuring Multidimensional Poverty and Statistics by Domain / Poverty and Inequality.