The Covariance Structure of East and West German Incomes and its Implications for the Persistence of Poverty and Inequality
Using data from the German Socio-Economic Panel (GSOEP), this paper analyzes the dynamics of equivalent income in Germany in the eighties and nineties. Special emphasis is given to the separation of permanent and transitory components, the persistence of transitory shocks and their implications for the persistence of poverty and income inequality. The results suggest that 52 to 69 percent of income inequality in West Germany were due to permanent differences between individuals and that poor individuals stayed in poverty for two years on average. In East Germany, the contribution of the permanent component to overall income inequality increased from 20 percent in 1990 to over 70 percent in 1998 and the persistence of poverty rose accordingly. The paper also looks at the special situation of population subgroups such as lone mothers, "double income no kids" households, couples with children and pensioners.
|Date of creation:||2002|
|Date of revision:|
|Contact details of provider:|| Postal: Mohrenstraße 58, D-10117 Berlin|
Web page: http://www.diw.de/en
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Devicienti, Francesco, 2002.
"Estimating Poverty Persistence in Britain,"
Royal Economic Society Annual Conference 2002
61, Royal Economic Society.
- Francesco Devicienti, 2001. "Estimating Poverty Persistence in Britain," LABORatorio R. Revelli Working Papers Series 1, LABORatorio R. Revelli, Centre for Employment Studies.
- Francesco Devicienti, 2001. "Estimating Poverty Persistence in Britain," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 B2-3, International Conferences on Panel Data.
- Martin Biewen, 2002.
"The Covariance Structure of East and West German Incomes and its Implications for the Persistence of Poverty and Inequality,"
Discussion Papers of DIW Berlin
292, DIW Berlin, German Institute for Economic Research.
- Martin Biewen, 2005. "The Covariance Structure of East and West German Incomes and its Implications for the Persistence of Poverty and Inequality," German Economic Review, Verein für Socialpolitik, vol. 6(4), pages 445-469, November.
- Biewen, Martin, 2002. "The Covariance Structure of East and West German Incomes and its Implications for the Persistence of Poverty and Inequality," IZA Discussion Papers 459, Institute for the Study of Labor (IZA).
- Dickens, Richard, 2000. "The Evolution of Individual Male Earnings in Great Britain: 1975-95," Economic Journal, Royal Economic Society, vol. 110(460), pages 27-49, January.
- Ann Huff Stevens, 1999.
"Climbing out of Poverty, Falling Back in: Measuring the Persistence of Poverty Over Multiple Spells,"
Journal of Human Resources,
University of Wisconsin Press, vol. 34(3), pages 557-588.
- Ann Huff Stevens, 1995. "Climbing Out of Poverty, Falling Back In: Measuring the Persistence of Poverty over Multiple Spells," NBER Working Papers 5390, National Bureau of Economic Research, Inc.
- Schluter, Christian, 1998. "Statistical inference with mobility indices," Economics Letters, Elsevier, vol. 59(2), pages 157-162, May.
- Ramos, Xavier, 2001. "The dynamics of individual male earnings in Great Britain: 1991-1999," ISER Working Paper Series 2001-15, Institute for Social and Economic Research.
- Grabka, Markus M. & Schwarze, Johannes & Wagner, Gert G., 1999.
"How Unification and Immigration Affected the German Income Distribution,"
EconStor Open Access Articles,
ZBW - German National Library of Economics, pages 867-878.
- Grabka, Markus M. & Schwarze, Johannes & Wagner, Gert G., 1999. "How unification and immigration affected the German income distribution," European Economic Review, Elsevier, vol. 43(4-6), pages 867-878, April.
- Wolfgang Franz & Viktor Steiner, 2000.
"Wages in the East German Transition Process: Facts and Explanations,"
German Economic Review,
Verein für Socialpolitik, vol. 1(3), pages 241-269, 08.
- Franz, Wolfgang & Steiner, Viktor, 1999. "Wages in the East German transition process: facts and explanations," ZEW Discussion Papers 99-40, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Biewen, Martin, 2000. "Income Inequality in Germany during the 1980s and 1990s," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 46(1), pages 1-19, March.
- Abowd, John M & Card, David, 1989.
"On the Covariance Structure of Earnings and Hours Changes,"
Econometric Society, vol. 57(2), pages 411-45, March.
- John M. Abowd & David Card, 1986. "On the Covariance Structure of Earnings and Hours Changes," NBER Working Papers 1832, National Bureau of Economic Research, Inc.
- Martin Biewen, 2001. "Measuring the Effects of Socio-Economic Variables on the Income Distribution: An Application to the East German Transition Process," The Review of Economics and Statistics, MIT Press, vol. 83(1), pages 185-190, February.
- Fouarge, Didier & Muffels, Ruud, 2000. "Persistent poverty in the Netherlands, Germany and the UK," MPRA Paper 13297, University Library of Munich, Germany.
- Chamberlain, Gary, 1984. "Panel data," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 2, chapter 22, pages 1247-1318 Elsevier.
- M. Burda & C. Schmidt, 1997. "Getting Behind The East-West Wage Differential: Theory and Evidence," SFB 373 Discussion Papers 1997,77, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
- Baker, Michael, 1997. "Growth-Rate Heterogeneity and the Covariance Structure of Life-Cycle Earnings," Journal of Labor Economics, University of Chicago Press, vol. 15(2), pages 338-75, April.
- Lillard, Lee A & Willis, Robert J, 1978.
"Dynamic Aspects of Earning Mobility,"
Econometric Society, vol. 46(5), pages 985-1012, September.
- Lorenzo Cappellari, 2002.
"The dynamics and inequality of Italian male earnings: permanent changes or transitory fluctuations?,"
10th International Conference on Panel Data, Berlin, July 5-6, 2002
C2-2, International Conferences on Panel Data.
- Cappellari, Lorenzo, 2000. "The dynamics and inequality of Italian male earnings: permanent changes or transitory fluctuations?," ISER Working Paper Series 2000-41, Institute for Social and Economic Research.
- MaCurdy, Thomas E., 1982. "The use of time series processes to model the error structure of earnings in a longitudinal data analysis," Journal of Econometrics, Elsevier, vol. 18(1), pages 83-114, January.
When requesting a correction, please mention this item's handle: RePEc:diw:diwwpp:dp292. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bibliothek)
If references are entirely missing, you can add them using this form.