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Title:Who Are the Chronic Poor? Evidence on the Extent and the Composition of Chronic Poverty in Germany PDF Logo
Authors:Biewen, Martin
Issue Date:2003
Series/Report no.:IZA Discussion paper series 779
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.
Subjects:chronic poverty
poverty persistence
multiple spells
unobserved heterogeneity
JEL:D31
I32
C23
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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