Report on "work and social cohesion" 2024 In 2023, the at-risk-of-poverty rate for children will reach 24%, but will fall by 4 points thanks to the Chèque Service Accueil (CSA) benefit.

Despite this fall, Luxembourg remains one of the lowest-ranked countries in the EU when it comes to poverty among the under-18s. The poverty rate is even more pronounced among single-parent households, with 44% affected by poverty.

However, certain measures are helping to alleviate these difficulties. For example, the risk of child poverty has fallen by 4 percentage points thanks to the Chèque Service Accueil (CSA) scheme, which improves household living standards. If household consumption and savings are also taken into account alongside income, this risk is even halved for children. Despite these measures, 8% of children under the age of 16 were affected by material deprivation in Luxembourg in 2021.

The upward trend in the at-risk-of-poverty rate continues...

Based on 2022 incomes in Luxembourg, half of all households have a monthly income of EUR 6,073 after tax and social security contributions, while the average monthly income is EUR 7,259. The median standard of living for a single person is EUR 3,970 per month after tax and social benefits.

A person is considered to be at risk of poverty if they live on less than EUR 2,382 per month, a threshold representing 60% of the median disposable income per adult equivalent. Currently, 18.8% of the population is in this situation. Some people are particularly vulnerable to poverty, including young people living alone, foreigners, people with a low level of education, the unemployed and single-parent families.

... but forecasts for 2023 point to an improvement

According to income forecasts for 2023, based on administrative data from the Inspectorate General of Social Security, the average disposable income of households resident in Luxembourg should increase from EUR 7,259 per month in 2022 to EUR 7,662 per month in 2023. This represents a significant increase of 5.6% compared with 2022. This increase is largely explained by the indexations in February, April and September 2023.

The at-risk-of-poverty threshold would be EUR 2,518 per month per adult in 2023. This would mean that 120,580 people would be living below this at-risk-of-poverty threshold. The at-risk-of-poverty rate calculated on the basis of the 2023 income forecasts would be 18.3%, down slightly on the 18.8% recorded in 2022. These figures have yet to be confirmed by the field survey for 2024.

Poverty is a dynamic phenomenon

Poverty dynamics offers a more in-depth approach by making it possible to track the movements of individuals and households in and out of poverty over an extended period. It highlights not only the extent of poverty, but also its duration and recurrence.

More than half of the people at risk of poverty in 2022 were no longer at risk of poverty in 2023. At the same time, some people will fall into poverty in 2023 who were not in poverty in 2022.

Fertility at a standstill

Luxembourg is experiencing a significant drop in the birth rate, with only 6,320 births in 2023, a fall of 2.7% compared with 2022. The total fertility rate will fall from 1.31 children per woman in 2022 to 1.25 in 2023. This trend has been constant since the 2000s. Maternity is also occurring later and later, with an average age of 31.2 for first-time mothers in 2023. This trend is accompanied by an increase in fertility among older women, while fertility among younger women continues to decline.

Births outside marriage are also increasing, although those within marriage remain the majority. Despite an overall higher birth rate among foreign residents, 20% of newborns in Luxembourg are the offspring of foreign parents who acquired Luxembourg nationality thanks to the 2008 law on Luxembourg nationality. The most popular first names in 2023 are Emma and Gabriel

Luxembourg, European champion for equal pay for men and women

Luxembourg has the lowest gender pay gap in Europe. In fact, women's average wages are rising faster than men's, although in some sectors there are still gaps in favour of men. However, these gaps are tending to narrow over time. In 2022, women accounted for 39% of salaried employment, but only 32% of management positions were held by women. Furthermore, employment in Luxembourg is highly segregated by branch and profession. For example, 39% of men work in construction, industry and transport, compared with only 9% of women, while 29% of women are employed in health and education, sectors where only 8% of men work.

Although women are on average better educated than men, men are over-represented in both the highest and lowest income brackets, reflecting wage polarisation. However, for age groups up to 44, women now earn more on average than men.

Salary disparities between residents and cross-border commuters persist

The Luxembourg labour market is highly internationalised, with only 25% of employees resident in Luxembourg. 6% of cross-border commuters are themselves of Luxembourg nationality, and the proportion of cross-border commuters residing in France has increased in recent years. Cross-border commuters are concentrated in lower-paying sectors such as industry, commerce and construction. As a result, their average salary is lower than that of Luxembourg residents.

However, when differences in purchasing power are taken into account, this wage gap is reduced. This means that the lower salaries of cross-border commuters may be offset by lower living costs in their countries of residence, or even give them greater purchasing power than Luxembourg residents.

The 20th edition of the Report on Labour and Social Cohesion

The report examines a number of key issues relating to social and economic inequality in Luxembourg. It highlights the gender pay gap and occupational segregation, as well as pay disparities between residents and cross-border commuters. It also examines inequalities between low and high incomes, the impact of pre-committed expenditure on real household income, as well as multidimensional poverty and energy poverty. Finally, it looks at child poverty, a persistent challenge despite the country's high standard of living.