We consider the link between poverty and subjective well-being, and focus in particular on the role of time. We use panel data on 49,000 individuals living in Germany from 1992 to 2012 to uncover three empirical relationships. First, life satisfaction falls with both the incidence and intensity of contemporaneous poverty. Second, poverty scars: those who have been poor in the past report lower life satisfaction today, even when out of poverty. Last, the order of poverty spells matters: for a given number of years in poverty, satisfaction is lower when the years are linked together. As such, poverty persistence reduces well-being. These effects differ by population subgroups.
We are grateful to the Editors and an anonymous referee for useful comments; we also thank participants at many seminars and conferences for valuable suggestions. The German data used in this paper were made available by the German Socio-Economic Panel Study (SOEP) at the German Institute for Economic Research (DIW), Berlin: see Wagner, Frick, and Schupp (2007). Neither the original collectors of the data nor the Archive bear any responsibility for the analyses or interpretations presented here. Conchita D’Ambrosio gratefully acknowledges financial support from the Fonds National de la Recherche Luxembourg. This work was also supported by the French National Research Agency, through the program Investissements d’Avenir, ANR-10-LABX-93–01.
Clark, A.E., D’Ambrosio, C. and Ghislandi, S. (2015), "Poverty Profiles and Well-Being: Panel Evidence from Germany", Measurement of Poverty, Deprivation, and Economic Mobility (Research on Economic Inequality, Vol. 23), Emerald Group Publishing Limited, Bingley, pp. 1-22. https://doi.org/10.1108/S1049-258520150000023001
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