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Always Poor or Never Poor and Nothing in Between? Duration of Child Poverty in Germany

Author

Listed:
  • Michael Fertig

    (RWI Essen and IZA Bonn)

  • Marcus Tamm

    () (RWI Essen and Ruhr-University Bochum)

Abstract

This paper analyses the duration of child poverty in Germany. In our sample, we observe the entire income history from the individuals' birth to their coming of age at age 18. Therefore we are able to analyze dynamics in and out of poverty for the entire population of children, whether they become poor at least once or not. Using duration models, we allow poverty exit and re-entry to be correlated even after controlling for observable characteristics and also account for correlations with initial conditions. Our results indicate that household composition, most importantly single parenthood, and the labour market status as well as level of education of the household head are the main driving forces behind exit from and re-entry into poverty and thus determine the (longterm) experience of child poverty. However, unobserved heterogeneity seems to play an important role as well.

Suggested Citation

  • Michael Fertig & Marcus Tamm, 2007. "Always Poor or Never Poor and Nothing in Between? Duration of Child Poverty in Germany," Working Papers 59, ECINEQ, Society for the Study of Economic Inequality.
  • Handle: RePEc:inq:inqwps:ecineq2007-59
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    References listed on IDEAS

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    1. Miles Corak & Michael Fertig & Marcus Tamm, 2008. "A Portrait Of Child Poverty In Germany," Review of Income and Wealth, International Association for Research in Income and Wealth, pages 547-571.
    2. Devicienti, Francesco, 2002. "Estimating Poverty Persistence in Britain," Royal Economic Society Annual Conference 2002 61, Royal Economic Society.
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    4. Arild Aakvik & Kjell G. Salvanes & Kjell Vaage, 2005. "Educational Attainment and Family Background," German Economic Review, Verein für Socialpolitik, vol. 6(3), pages 377-394, August.
    5. 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, pages 557-588.
    6. 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.
    7. Anne Case & Darren Lubotsky & Christina Paxson, 2002. "Economic Status and Health in Childhood: The Origins of the Gradient," American Economic Review, American Economic Association, pages 1308-1334.
    8. Lawrence F. Katz & Jeffrey R. Kling & Jeffrey B. Liebman, 2000. "Moving to Opportunity in Boston: Early Results of a Randomized Mobility Experiment," Working Papers 820, Princeton University, Department of Economics, Industrial Relations Section..
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    10. 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.
    11. Lorenzo Cappellari & Stephen P. Jemkins, 2002. "Who Stays Poor? Who Becomes Poor? Evidence from the British Household Panel Survey," Economic Journal, Royal Economic Society, vol. 112(478), pages 60-67, March.
    12. Martin Biewen, 2003. "Who Are the Chronic Poor?: Evidence on the Extent and the Composition of Chronic Poverty in Germany," Discussion Papers of DIW Berlin 350, DIW Berlin, German Institute for Economic Research.
    13. Carneiro, Pedro & Heckman, James J., 2003. "Human Capital Policy," IZA Discussion Papers 821, Institute for the Study of Labor (IZA).
    14. Arnstein Aassve & Simon Burgess & Matt Dickson & Carol Propper, 2005. "Modelling Poverty by not Modelling Poverty: An Application of a Simultaneous Hazards Approach to the UK," The Centre for Market and Public Organisation 05/134, Department of Economics, University of Bristol, UK.
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    Citations

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    Cited by:

    1. Alexander Ahammer & Ivan Zilic, 2017. "Do Financial Incentives Alter Physician Prescription Behavior? Evidence from Random Patient-GP Allocations," Working Papers 1701, The Institute of Economics, Zagreb.
    2. Marjan Maes, 2013. "Poverty persistence among the elderly in the transition from work to retirement," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, pages 35-56.
    3. Matthew Lindquist & Gabriella Sjögren Lindquist, 2012. "The dynamics of child poverty in Sweden," Journal of Population Economics, Springer;European Society for Population Economics, pages 1423-1450.
    4. Francesco Devicienti, 2011. "Estimating poverty persistence in Britain," Empirical Economics, Springer, pages 657-686.
    5. Zabel, Cordula, 2011. "Lone mothers' participation in labor market programs for means-tested benefit recipients in Germany," IAB Discussion Paper 201114, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    6. Matthew Lindquist & Gabriella Sjögren Lindquist, 2012. "The dynamics of child poverty in Sweden," Journal of Population Economics, Springer;European Society for Population Economics, pages 1423-1450.
    7. Kerstin Schneider & Claudia Schuchart & Horst Weishaupt & Andrea Riedel, 2011. "The effect of free primary school choice on ethnic groups – Evidence from a policy reform," Schumpeter Discussion Papers sdp11007, Universitätsbibliothek Wuppertal, University Library.
    8. KYZYMA Iryna, 2013. "Changes in the patterns of poverty duration in Germany, 1992-2009," LISER Working Paper Series 2013-06, LISER.
    9. Tamm Marcus, 2010. "Child Benefit Reform and Labor Market Participation," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, pages 313-327.
    10. Iryna Kyzyma & Donald R. Williams, 2017. "Public cash transfers and poverty dynamics in Europe," Empirical Economics, Springer, pages 485-524.
    11. Görlitz, Katja, 2010. "The effect of subsidizing continuous training investments -- Evidence from German establishment data," Labour Economics, Elsevier, pages 789-798.
    12. Krämer Walter & Arminger Gerhard, 2011. "“True Believers” or Numerical Terrorism at the Nuclear Power Plant," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, pages 608-620.
    13. Schneider, Kerstin & Schuchart, Claudia & Weishaupt, Horst & Riedel, Andrea, 2012. "The effect of free primary school choice on ethnic groups — Evidence from a policy reform," European Journal of Political Economy, Elsevier, vol. 28(4), pages 430-444.
    14. REINSTADLER Anne & RAY Jean-Claude, 2010. "Macro Determinants of Individual Income Poverty in 93 Regions of Europe," LISER Working Paper Series 2010-13, LISER.
    15. Nguyen, Cuong Viet & Vu, Linh Hoang, 2014. "Should Parents Work Away from or Close to Home? The Effect of Temporary Parental Absence on Child Poverty and Children’s Time Use in Vietnam," MPRA Paper 52877, University Library of Munich, Germany.
    16. Krämer Walter & Arminger Gerhard, 2011. "“True Believers” or Numerical Terrorism at the Nuclear Power Plant," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, pages 608-620.

    More about this item

    Keywords

    Child poverty; duration analysis; unobserved heterogeneity.;

    JEL classification:

    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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