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 Institute of Labor Economics (IZA)

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
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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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