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Who Are the Chronic Poor? Evidence on the Extent and the Composition of Chronic Poverty in Germany

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  • Biewen, Martin

    (University of Tuebingen)

Abstract

Based on a multiple spells approach, this paper studies the extent and the composition of chronic poverty in Germany. The results indicate that about one third of cross-sectional poverty in a given year is chronic. The characteristics that are most closely associated with long-term poverty are economic inactivity and pensioner status, while the number of children and the gender of the household head do not seem to have a systematic effect. This is in contrast to cross-sectional results where the biggest poverty risk is usually unemployment and a large number of children, while pensioners do not face particularly high poverty risks. Estimates from a multiple spells hazard model further suggest that 6% of the population have unobserved characteristics that lead to low poverty exit and high re-entry rates, making these individuals likely candidates for chronic poverty. A comparison with results for Great Britain and the United States suggests that poverty is less persistent in Germany.

Suggested Citation

  • Biewen, Martin, 2003. "Who Are the Chronic Poor? Evidence on the Extent and the Composition of Chronic Poverty in Germany," IZA Discussion Papers 779, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp779
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    References listed on IDEAS

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    1. Francesco Devicienti, 2011. "Estimating poverty persistence in Britain," Empirical Economics, Springer, vol. 40(3), pages 657-686, May.
    2. Heckman, James & Singer, Burton, 1984. "A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data," Econometrica, Econometric Society, vol. 52(2), pages 271-320, March.
    3. Meghir, Costas & Whitehouse, Edward, 1997. "Labour market transitions and retirement of men in the UK," Journal of Econometrics, Elsevier, vol. 79(2), pages 327-354, August.
    4. Martin Biewen, 2005. "The Covariance Structure of East and West German Incomes and its Implications for the Persistence of Poverty and Inequality," German Economic Review, Verein für Socialpolitik, vol. 6(4), pages 445-469, November.
    5. Mary Jo Bane & David T. Ellwood, 1986. "Slipping into and out of Poverty: The Dynamics of Spells," Journal of Human Resources, University of Wisconsin Press, vol. 21(1), pages 1-23.
    6. Martin Biewen, 2002. "The covariance structure of east and west German incomes and its implications for the persistence of inequality and poverty," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 B2-2, International Conferences on Panel Data.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Catherine Pollak & Bernard Gazier, 2008. "L'apport des analyses longitudinales dans la connaissance des phénomènes de pauvreté et d'exclusion sociale : un survey de la littérature étrangère," Post-Print hal-00393322, HAL.
    2. Michael Fertig & Marcus Tamm, 2010. "Always Poor or Never Poor and Nothing in Between? Duration of Child Poverty in Germany," German Economic Review, Verein für Socialpolitik, vol. 11(2), pages 150-168, May.
    3. Aysenur Acar & Cem Baslevent, 2014. "Examination of the Transitions of Households into and out of Poverty in Turkey," Working Papers 015, Bahcesehir University, Betam.
    4. Patricio S. Dalton & Sayantan Ghosal & Anandi Mani, 2016. "Poverty and Aspirations Failure," Economic Journal, Royal Economic Society, vol. 126(590), pages 165-188, February.
    5. Ayşenur Acar & Cem Baslevent, 2013. "Examination of the transition of Turkish households into and out of poverty between 2007-2010," EcoMod2013 5779, EcoMod.
    6. Islam, Nizamul & Shimeles, Abebe, 2007. "Poverty dynamics in Ethiopia: state dependence," Working Papers in Economics 260, University of Gothenburg, Department of Economics.
    7. Maes, Marjan, 2008. "Poverty persistence among Belgian elderly: true or spurious?," ISER Working Paper Series 2008-24, Institute for Social and Economic Research.
    8. repec:bla:germec:v:11:y:2010:i::p:150-168 is not listed on IDEAS
    9. Mathilde Clément, 2014. "Mieux comprendre les facteurs de risque de pauvreté en conditions de vie en contrôlant les caractéristiques inobservées fixes," Économie et Statistique, Programme National Persée, vol. 469(1), pages 37-59.
    10. Andriopoulou, Eirini & Tsakloglou, Panos, 2011. "The Determinants of Poverty Transitions in Europe and the Role of Duration Dependence," IZA Discussion Papers 5692, Institute of Labor Economics (IZA).
    11. Hansen, Jörgen & Wahlberg, Roger, 2004. "Poverty Persistence in Sweden," IZA Discussion Papers 1209, Institute of Labor Economics (IZA).
    12. Marjan, MAES, 2008. "Poverty persistence among Belgian elderly in the transition from work to retirement : an empirical analysis," Discussion Papers (ECON - Département des Sciences Economiques) 2008042, Université catholique de Louvain, Département des Sciences Economiques.
    13. Anna Sączewska-Piotrowska, 2016. "Badanie dynamiki ubóstwa gospodarstw domowych z wykorzystaniem wybranych modeli analizy historii zdarzeń," Collegium of Economic Analysis Annals, Warsaw School of Economics, Collegium of Economic Analysis, issue 41, pages 29-46.
    14. Natalia Nehrebecka & Agata Kocia, 2009. "Analysis of poverty in Poland in 1997 - 2000 using hazard models," Working Papers 2009-09, Faculty of Economic Sciences, University of Warsaw.
    15. Wan-Lin Chiang & Tung-liang Chiang, 2018. "Risk Factors for Persistent Child Poverty during the First Five Years of Life in Taiwan Birth Cohort Study," Child Indicators Research, Springer;The International Society of Child Indicators (ISCI), vol. 11(3), pages 885-896, June.
    16. Jorgen Hansen & Roger Wahlberg, 2009. "Poverty and its persistence: a comparison of natives and immigrants in Sweden," Review of Economics of the Household, Springer, vol. 7(2), pages 105-132, June.

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    More about this item

    Keywords

    unobserved heterogeneity; chronic poverty; poverty persistence; multiple spells;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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