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Decomposing Permanent and Transitory Poverty

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  • Jan Goebel

Abstract

In der vorliegenden Arbeit wird eine neue Berechnungsweise des Anteils permanenter Armut an der gesamten vorhandenen Armut vorgestellt. Es wird gezeigt, dass der weithin genutzte Shorrocks-Index zur Zerlegung von permanenter und transitorischer Ungleichheit auch zur Beschreibung von Armut genutzt werden kann. Damit können Unzulänglichkeiten in der von Rodgers & Rodgers (1993) gewählten Berechnung behoben werden. Die Nutzung des hier vorgeschlagenen Armuts-Stabilitäts-Koeffizienten erlaubt eine gut interpretierbare Unterscheidung der relativen Größe von permanenter und transitorischer Armut. Empirische Ergebnisse werden anhand des Sozio-oekonomischen Panels für Ost- und Westdeutschland dargestellt. This paper proposes a new method of calculating the proportion of permanently impoverished persons among persons in poverty as a whole. The paper shows that the widely used Shorrocks-Index for decomposing permanent and transitory inequality can also be acquired to describe poverty. This method overcomes certain difficulties involved in the methods of Rodgers & Rodgers (1993). The characteristics of the proposed Poverty-Stability- Index allow for an intuitive differentiation between the relative sizes of permanent and transitional poverty. Empirical results using data from the German Socio-Economic Panel (GSOEP) will be presented for East- and West- Germany.

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File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.38509.de/dp256.pdf
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Bibliographic Info

Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 256.

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Length: 12 p.
Date of creation: 2001
Date of revision:
Handle: RePEc:diw:diwwpp:dp256

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Related research

Keywords: Permanent poverty; transitory poverty; poverty dynamics; panel data;

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References

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  1. Duncan, Greg J, et al, 1993. "Poverty Dynamics in Eight Countries," Journal of Population Economics, Springer, vol. 6(3), pages 215-34.
  2. repec:ese:iserwp:99-23 is not listed on IDEAS
  3. Richard V. Burkhauser & John G. Poupore, 1997. "A Cross-National Comparison Of Permanent Inequality In The United States And Germany," The Review of Economics and Statistics, MIT Press, vol. 79(1), pages 10-17, February.
  4. Shorrocks, Anthony, 1978. "Income inequality and income mobility," Journal of Economic Theory, Elsevier, vol. 19(2), pages 376-393, December.
  5. Joan R. Rodgers & John L. Rodgers, 1993. "Chronic Poverty in the United States," Journal of Human Resources, University of Wisconsin Press, vol. 28(1), pages 25-54.
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