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Poverty Profiles and Well-Being: Panel Evidence from Germany

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  • Andrew E. Clark
  • Conchita D'Ambrosio
  • Simone Ghislandi

Abstract

We consider the link between poverty and subjective well-being, and focus in particular on the role of time. We use panel data on 49,000 individuals living in Germany from 1992 to 2012 to uncover three empirical relationships. First, life satisfaction falls with both the incidence and intensity of contemporaneous poverty. Second, poverty scars: those who have been poor in the past report lower life satisfaction today, even when out of poverty. Last, the order of poverty spells matters: for a given number of years in poverty, satisfaction is lower when the years are linked together. As such, poverty persistence reduces well-being. These effects differ by population subgroups.

Suggested Citation

  • Andrew E. Clark & Conchita D'Ambrosio & Simone Ghislandi, 2015. "Poverty Profiles and Well-Being: Panel Evidence from Germany," SOEPpapers on Multidisciplinary Panel Data Research 739, DIW Berlin, The German Socio-Economic Panel (SOEP).
  • Handle: RePEc:diw:diwsop:diw_sp739
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    References listed on IDEAS

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    Cited by:

    1. Rodríguez-Álvarez, A. & Orea, L. & Jamasb, T., 2016. "Fuel poverty and well-being: a consmer theory and stochastic fronteir approach," Cambridge Working Papers in Economics 1668, Faculty of Economics, University of Cambridge.
    2. repec:cog:socinc:v:7:y:2019:i:3:p:4-16 is not listed on IDEAS
    3. Heinz Welsch & Philipp Biermann, 2019. "Poverty is a Public Bad: Panel Evidence From Subjective Well‐Being Data," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 65(1), pages 187-200, March.
    4. World Bank, "undated". "Europe and Central Asia Economic Update, November 2016," World Bank Other Operational Studies 25341, The World Bank.
    5. Nicholas Rohde, 2016. "J-divergence measurements of economic inequality," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 179(3), pages 847-870, June.

    More about this item

    Keywords

    Income; poverty; subjective well-being; SOEP;

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • D60 - Microeconomics - - Welfare Economics - - - General

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