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Polarization of Time and Income – A Multidimensional Approach with Well-Being Gap and Minimum 2DGAP: German Evidence

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  • Merz, Joachim

    (Leuphana University Lüneburg)

  • Scherg, Bettina

    (Leuphana University Lüneburg)

Abstract

A growing polarization of society accompanied with an erosion of the middle class experiences more and more attention at least in the German recent economic and social policy discussion. Our study contributes to the polarization discussion with respect to multidimensional theoretical measurement and empirical application in two ways: First, we propose extended multidimensional polarization indices based on a CES-type well-being function and present a new measure to multidimensional polarization, the mean minimum polarization gap 2DGAP. This polarization intensity measure provides transparency with regard to each singular attributes – important for targeted policies – and ensures at the same time its interdependent relations. Second, the empirical application – in addition to the traditional income measure – incorporates time as a fundamental resource for any activity. In particular, genuine personal leisure time will take care of social participation in the spirit of social inclusion/exclusion and Amartya Sen's capability approach. Instead of arbitrarily choosing the attributes' parameters in the CES well-being function, the interdependent relations of time and income will be evaluated by German Society. With the German Socio-Economic Panel (SOEP) and detailed time use diary data of the available German Time Use Survey (GTUS) 1991/92 and 2001/02 we quantify available and extended multidimensional polarization measures as well as our new approach for the polarization development of the working poor and the working rich in Germany. Results: Genuine personal leisure time in addition to income is an important polarization attribute. Compensation is of economic and static significance. In particular supported by the new minimum 2DGAP approach, multidimensional polarization increased over that decade in Germany.

Suggested Citation

  • Merz, Joachim & Scherg, Bettina, 2013. "Polarization of Time and Income – A Multidimensional Approach with Well-Being Gap and Minimum 2DGAP: German Evidence," IZA Discussion Papers 7418, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp7418
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    Cited by:

    1. Victoria Ateca-Amestoy & Mariana Gerstenblüth & Irene Mussio & Máximo Rossi, 2014. "How do Cultural Activities Influence Happiness? The Relation Between Self-Reported Well-Being and Leisure," Documentos de Trabajo (working papers) 0614, Department of Economics - dECON.
    2. Victoria Ateca-Amestoy & Mariana Gerstenblüth & Irene Mussio & Máximo Rossi, 2016. "How do cultural activities influence happiness? Investigating the relationship between self-reported well-being and leisure," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 31(2), pages 217-234.

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    More about this item

    Keywords

    multidimensional polarization; intensity of time and income poverty and affluence; interdependent multidimensional time and income poverty and affluence; minimum multidimensional polarization gap (2DGAP); extended economic well-being; satisfaction/happiness; working poor; CES well-being function; German Socio-Economic Panel; German Time Use Surveys 1991/92 and 2001/02;
    All these keywords.

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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