Who are the chronic poor? An econometric analysis of chronic poverty in germany

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.

Citation

Biewen, M. (2006), "Who are the chronic poor? An econometric analysis of chronic poverty in germany", Creedy, J. and Kalb, G. (Ed.) Dynamics of Inequality and Poverty (Research on Economic Inequality, Vol. 13), Emerald Group Publishing Limited, Leeds, pp. 31-62. https://doi.org/10.1016/S1049-2585(06)13002-1