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

Martin Biewen

No 779, IZA Discussion Papers from IZA Network @ LISER

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.

Keywords: unobserved heterogeneity; chronic poverty; poverty persistence; multiple spells (search for similar items in EconPapers)
JEL-codes: C23 D31 I32 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2003-05
New Economics Papers: this item is included in nep-edu
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

Published - published in: Research on Economic Inequality, 2006, 13 (1), 31-62

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Working Paper: Who Are the Chronic Poor?: Evidence on the Extent and the Composition of Chronic Poverty in Germany (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp779

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