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

Martin Biewen

No 350, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

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: chronic poverty; poverty persistence; multiple spells; unobserved heterogeneity (search for similar items in EconPapers)
JEL-codes: C23 D31 I32 (search for similar items in EconPapers)
Pages: 31 p.
Date: 2003
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Citations: View citations in EconPapers (19)

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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:diw:diwwpp:dp350

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