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Poverty in Germany – Statistical Inference and Decomposition

Author

Listed:
  • Bönke Timm

    (Freie Universität Berlin, Fachbereich Wirtschaftswissenschaft, Öffentliche Finanzen und Socialpolitik, Boltzmannstraße 20, 14195 Berlin, Germany)

  • Schröder Carsten

    (Christian-Albrechts-Universität zu Kiel, Institut für Volkswirtschaftslehre, Wilhelm-Seelig-Platz 1, 24118 Kiel, Germany)

Abstract
Based on six harmonized cross-sections of the German Sample Survey of Income and Expenditure, we study inter-temporal changes in poverty from year 1978 to 2003. Results are decomposed by region and household types, and the bootstrap method is applied to test for the statistical significance of all our findings. Across household types, single parents with children have the highest poverty risk.Most striking is a huge regional divide in poverty which only narrows slightly over the period under investigation: the incidence and the intensity of poverty are substantially higher in the New states. A nonlinear Oaxaca-Blinder decomposition is conducted to quantify the separate contribution of regional differences in households’ characteristics to the likelhood of being poor. Estimates from the decomposition indicate that differences in the distributions of socioeconomic characteristics play a negligible role for the 1993 poverty divide. Already in year 2003, however, differences in the distributions of characteristics explain more than fifty percent of the poverty divide, indicating that the poverty divide is likely to become a persistent phenomenon.

Suggested Citation

  • Bönke Timm & Schröder Carsten, 2011. "Poverty in Germany – Statistical Inference and Decomposition," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 231(2), pages 178-209, April.
    • Handle: RePEc:jns:jbstat:v:231:y:2011:i:2:p:178-209
    DOI: 10.1515/jbnst-2011-0202
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    Cited by:

    1. Theresa Köhler, 2016. "Income and Wealth Poverty in Germany," SOEPpapers on Multidisciplinary Panel Data Research 857, DIW Berlin, The German Socio-Economic Panel (SOEP).

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    More about this item

    Keywords

    Poverty; Oaxaca-Blinder decomposition; bootstrap; equivalence scale; Poverty; Oaxaca-Blinder decomposition; bootstrap; equivalence scale;
    All these keywords.

    JEL classification:

    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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