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Time and income poverty: An interdependent multidimensional poverty approach with German time use diary data

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  • Joachim Merz

    (LEUPHANA University Lüneburg – IZA)

  • Tim Rathjen

    (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, 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: We consider time – and income – both as important resources of everyday activities; the interdependence of the poverty dimensions will be evaluated by the German population. Referring to the time dimension, we follow Sen’s capability approach and argue, that restricted genuine, leisure time might exclude from social participation. The substitution between income and genuine leisure time is estimated by a CES-utility function of general utility with the German Socio-Economic Panel. We disentangle time, income and interdependent multidimensional poverty regimes characterising the working poor by a multinomial logit based on German 2001/02 time use diary data. One striking result: 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/time famine discussion so far.

Suggested Citation

  • Joachim Merz & Tim Rathjen, 2009. "Time and income poverty: An interdependent multidimensional poverty approach with German time use diary data," Working Papers 126, ECINEQ, Society for the Study of Economic Inequality.
  • Handle: RePEc:inq:inqwps:ecineq2009-126
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    Cited by:

    1. Cristian F. Sepulveda, 2019. "Time-saving Goods, Time Inequalities, and Optimal Taxation," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1902, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    2. Joachim Merz & Tim Rathjen, 2014. "Time And Income Poverty: An Interdependent Multidimensional Poverty Approach With German Time Use Diary Data," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(3), pages 450-479, September.
    3. Busch, Christopher & Peichl, Andreas, 2010. "The Development of Multidimensional Poverty in Germany 1985-2007," IZA Discussion Papers 4922, Institute of Labor Economics (IZA).
    4. 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 of Labor Economics (IZA).
    5. Nicolai Suppa, 2018. "Towards a multidimensional poverty index for Germany," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 45(4), pages 655-683, November.
    6. David Bell & Steffen Otterbach & Alfonso Sousa-Poza, 2012. "Work Hours Constraints and Health," Annals of Economics and Statistics, GENES, issue 105-106, pages 35-54.
    7. Nicholas Rohde & Ross Guest, 2018. "Multidimensional Inequality Across Three Developed Countries," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 64(3), pages 576-591, September.
    8. 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.
    9. Merz, Joachim & Rathjen, Tim, 2016. "Entrepreneurs and Freelancers: Are They Time and Income Multidimensional Poor? The German Case," IZA Discussion Papers 9912, Institute of Labor Economics (IZA).
    10. Merz, Joachim & Peters, Normen, 2019. "Parental Child Care Time, Income and Subjective Well-Being: A Multidimensional Polarization Approach for Germany," IZA Discussion Papers 12145, Institute of Labor Economics (IZA).
    11. Joachim Merz & Normen Peters, 2019. "Parental Child Care Time, Income and Subjective Well-Being: A Multidimensional Polarization Approach for Germany," SOEPpapers on Multidisciplinary Panel Data Research 1021, DIW Berlin, The German Socio-Economic Panel (SOEP).
    12. Iris Burmester & Bettina Scherg, 2013. "Polarisierung von Arbeitseinkommen im internationalen Vergleich – Empirische Befunde," FFB-Discussionpaper 96, Research Institute on Professions (Forschungsinstitut Freie Berufe (FFB)), LEUPHANA University Lüneburg.
    13. 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.
    14. Joachim Merz & Bettina Scherg, 2013. "Polarization of time and income – A multidimensional approach with well-being gap and minimum 2DGAP: German evidence," Working Papers 297, ECINEQ, Society for the Study of Economic Inequality.
    15. Nicolai Suppa, 2018. "Towards a multidimensional poverty index for Germany," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 45(4), pages 655-683, November.
    16. Venn, Danielle & Strazdins, Lyndall, 2017. "Your money or your time? How both types of scarcity matter to physical activity and healthy eating," Social Science & Medicine, Elsevier, vol. 172(C), pages 98-106.
    17. Tim Rathjen, 2011. "Do Time Poor Individuals Pay More?," FFB-Discussionpaper 91, Research Institute on Professions (Forschungsinstitut Freie Berufe (FFB)), LEUPHANA University Lüneburg.
    18. Joachim Merz & Tim Rathjen, 2014. "Multidimensional time and income poverty: well-being gap and minimum 2DGAP poverty intensity – German evidence," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 12(4), pages 555-580, December.
    19. Yuta J. Masuda & Jason R. Williams & Heather Tallis, 2021. "Does Life Satisfaction Vary with Time and Income? Investigating the Relationship Among Free Time, Income, and Life Satisfaction," Journal of Happiness Studies, Springer, vol. 22(5), pages 2051-2073, June.

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    More about this item

    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.;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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