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Time and Income Poverty: An Interdependent Multidimensional Poverty Approach with German Time Use Diary Data

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  • Merz, Joachim

    ()
    (Leuphana University Lüneburg)

  • Rathjen, Tim

    ()
    (Leuphana University Lüneburg)

Abstract

Income as the traditional one dimensional measure in well-being and poverty analyses is extended in recent studies by a multidimensional poverty concept. Though this is certainly a progress, however, two important aspects are missing: time as an important dimension and the interdependence of the often only separately counted multiple poverty dimensions. Our paper will contribute to both aspects: First, we consider time – and income – both as striking and restricting resources of everyday activities and hence account for time and income as important multiple poverty dimensions. Second, the interdependence of the poverty dimensions will be evaluated by the German population to allow an advanced approach to understand possible substitution effects and the respective trade offs between the dimensions. Referring to the time dimension, we follow Sen's capability approach with its freedom of the living conditions' choice and social exclusion and argue, that restricted time might exclude from social participation. In particular, restricted genuine, personal leisure time (not entire leisure time) in particular is associated with a restricted social participation. The crucial question then is how to measure the substitution between income and such genuine leisure time. In our analysis we consider the country population’s valuation with data from the German Socio-Economic Panel and estimate the substitution by a CES-utility function of general utility/satisfaction. Given this quantification we disentangle time, income and interdependent multidimensional poverty regimes characterising the working poor. In addition, we quantify further socio-economic influences for each interdependent multidimensional poverty regime by a multinomial logit based on time use diary data of the German Time Use Study 2001/02. One striking result for Germany: the substitution between time and income is significant and we find an important fraction of time poor who are unable to substitute their time deficit by income. These poor people are ignored within the poverty and well-being as well as the time crunch and time famine discussion so far.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4337.

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Length: 30 pages
Date of creation: Aug 2009
Date of revision:
Handle: RePEc:iza:izadps:dp4337

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Keywords: interdependent multidimensional time and income poverty; time and income substitution; extended economic well-being; satisfaction; CES utility function estimation; working poor; German Socio-Economic Panel; German Time Use Surveys 2001/02;

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References

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Citations

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Cited by:
  1. Joachim Merz & Bettina Scherg, 2013. "Polarization of Time and Income: A Multidimensional Approach with Well-Being Gap and Minimum 2DGAP ; German Evidence," SOEPpapers on Multidisciplinary Panel Data Research 574, DIW Berlin, The German Socio-Economic Panel (SOEP).
  2. Merz, Joachim & Rathjen, Tim, 2011. "Intensity of Time and Income Interdependent Multidimensional Poverty: Well-Being and Minimum 2DGAP – German Evidence," IZA Discussion Papers 6022, Institute for the Study of Labor (IZA).
  3. Busch, Christopher & Peichl, Andreas, 2010. "The Development of Multidimensional Poverty in Germany 1985-2007," IZA Discussion Papers 4922, Institute for the Study of Labor (IZA).
  4. Bell, David & Otterbach, Steffen & Sousa-Poza, Alfonso, 2011. "Work hours constraints and health," FZID Discussion Papers 36-2011, University of Hohenheim, Center for Research on Innovation and Services (FZID).
  5. Joachim Merz & Tim Rathjen, 2011. "Zeit- und Einkommensarmut von Freien Berufen und Unternehmern," FFB-Discussionpaper 89, Research Institute on Professions (Forschungsinstitut Freie Berufe (FFB)), LEUPHANA University Lüneburg.
  6. Tim Rathjen, 2011. "Do Time Poor Individuals Pay More?," FFB-Discussionpaper 91, Research Institute on Professions (Forschungsinstitut Freie Berufe (FFB)), LEUPHANA University Lüneburg.
  7. Joachim Merz & Henning Stolze, 2010. "Kumulation von Querschnitten - Evaluierung alternativer Konzepte für die kumulierten laufenden Wirtschaftsrechnungen 1999 bis 2003 im Vergleich zur Einkommens- und Verbrauchsstichprobe 2003," FFB-Discussionpaper 85, Research Institute on Professions (Forschungsinstitut Freie Berufe (FFB)), LEUPHANA University Lüneburg.

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