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The German spatial poverty divide: poorly endowed or bad luck?

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  • Bönke, Timm
  • Schröder, Carsten

Abstract

We study inter-temporal changes in poverty for Germany from year 1978 to 2003, and we employ the bootstrap method to test for statistical significance of results. All results are decomposed by household type and region. Poverty estimates are particularly high for single parents. Most striking, however, is the poverty divide between the old and newly-formed German Federal States, with poverty being significantly higher in the latter. We conduct a nonlinear Oaxaca-Blinder decomposition to quantify the separate contribution of regional differences in households' characteristics to the probability of being poor. --

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Paper provided by Free University Berlin, School of Business & Economics in its series Discussion Papers with number 2009/6.

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Date of creation: 2009
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Handle: RePEc:zbw:fubsbe:20096

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Keywords: Poverty; decomposition; expenditure patterns; necessities; Oaxaca-Blinder decomposition; bootstrap; equivalence scale;

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  1. Phil Oreopoulos & Mark Stabile & Randy Walld & Leslie Roos, 2006. "Short, Medium, and Long Term Consequences of Poor Infant Health: An Analysis using Siblings and Twins," NBER Working Papers 11998, National Bureau of Economic Research, Inc.
  2. Michael Fertig & Marcus Tamm & Miles Corak, 2005. "A Portrait of Child Poverty in Germany," RWI Discussion Papers, Rheinisch-Westfälisches Institut für Wirtschaftsforschung 0026, Rheinisch-Westfälisches Institut für Wirtschaftsforschung.
  3. Richard V. Burkhauser & Timothy M. Smeeding & Joachim Merz, 1994. "Relative Inequality and Poverty in Germany and the United States Using Alternative Equivalence Scales," FFB-Discussionpaper, Research Institute on Professions (Forschungsinstitut Freie Berufe (FFB)), LEUPHANA University Lüneburg 12, Research Institute on Professions (Forschungsinstitut Freie Berufe (FFB)), LEUPHANA University Lüneburg.
  4. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
  5. Robert G. Valletta, 2006. "The Ins And Outs Of Poverty In Advanced Economies: Government Policy And Poverty Dynamics In Canada, Germany, Great Britain, And The United States," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 52(2), pages 261-284, 06.
  6. Stephen P. Jenkins & Christian Schluter & Gert G. Wagner, 2001. "The Dynamics of Child Poverty: Britain and Germany Compared," Discussion Papers of DIW Berlin 233, DIW Berlin, German Institute for Economic Research.
  7. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, Econometric Society, vol. 52(3), pages 761-66, May.
  8. Stephen P. Jenkins & Christian Schluter, 2003. "Why Are Child Poverty Rates Higher in Britain than in Germany?: A Longitudinal Perspective," Journal of Human Resources, University of Wisconsin Press, vol. 38(2).
  9. Finis Welch, 1999. "In Defense of Inequality," American Economic Review, American Economic Association, American Economic Association, vol. 89(2), pages 1-17, May.
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