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Headey, Bruce
Krause, Peter
Habich, Roland
[Publisher:] Deutsches Institut für Wirtschaftsforschung (DIW) [Place:] Berlin [Year:] 1991
DIW Discussion Papers 38
Social scientists and media commentators have expressed concern that Western countries are becoming two-thirds societies in which two-thirds enjoy the benefits of affluence, while one-third are locked into poverty or near-poverty. This paper, based on economic panel data, tests the two-thirds society hypothesis in the case of (West) Germany 1984-89. The main finding is that poverty (defined as receiving less than half of average net household equivalent income) is mostly short term and that nothing like one-third are locked into poverty On the other hand, far more people than had previously been thought are at risk of poverty. In 1984-89 only 3% were poor every year but about 25% were poor in at least one year. Germany appears to be a 75-15-10 society: 75% not poor, 15% occasionally poor but with generally adequate incomes, and 10% frequently poor or near-poor with incomes that may be considered inadequate. Analysis is based on the German Socio-Economic Panel Study (SOEP) and relates to the 8,000 people who were interviewed each year from 1984 to 1989.
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