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Adaptation to Poverty in Long-Run Panel Data

Author

Listed:
  • Clark, Andrew E.

    () (Paris School of Economics)

  • D'Ambrosio, Conchita

    () (University of Luxembourg)

  • Ghislandi, Simone

    () (Bocconi University)

Abstract

We consider the link between poverty and subjective well-being, and focus in particular on potential adaptation to poverty. We use panel data on almost 54,000 individuals living in Germany from 1985 to 2012 to show first that life satisfaction falls with both the incidence and intensity of contemporaneous poverty. We then reveal that there is little evidence of adaptation within a poverty spell: poverty starts bad and stays bad in terms of subjective well-being. We cannot identify any cause of poverty entry which explains the overall lack of poverty adaptation.

Suggested Citation

  • Clark, Andrew E. & D'Ambrosio, Conchita & Ghislandi, Simone, 2014. "Adaptation to Poverty in Long-Run Panel Data," IZA Discussion Papers 8656, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp8656
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Adaptation to Poverty in Long-Run Panel Data
      by maximorossi in NEP-LTV blog on 2014-12-30 18:16:51
    2. Adaptation to Poverty in Long-Run Panel Data By: Clark, Andrew E. ; D’Ambrosio, Conchita ; Ghislandi, Simone
      by maximorossi in NEP-LTV blog on 2015-07-30 22:24:38
    3. “Poverty starts bad and stays bad”
      by Robin in Cherokee Gothic on 2014-02-06 20:00:00
    4. Policy, & the aspirations gap
      by chris dillow in Stumbling and Mumbling on 2014-02-12 20:00:03

    Citations

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    as


    Cited by:

    1. Etilé, Fabrice & Frijters, Paul & Johnston, David W. & Shields, Michael A., 2020. "Psychological Resilience to Major Socioeconomic Life Events," IZA Discussion Papers 13063, Institute of Labor Economics (IZA).
    2. Andrew E. Clark, 2015. "Adaptation and the Easterlin Paradox," PSE Working Papers halshs-01112725, HAL.
    3. Andrew E. Clark & Conchita d'Ambrosio & Rong Zhu, 2020. "Living in the Shadow of the Past: Financial Profiles and Well-Being," Working Papers halshs-02497067, HAL.
    4. repec:bof:bofitp:urn:nbn:fi:bof-201508181355 is not listed on IDEAS
    5. Ayllón, Sara & Fusco, Alessio, 2017. "Are income poverty and perceptions of financial difficulties dynamically interrelated?," Journal of Economic Psychology, Elsevier, vol. 61(C), pages 103-114.
    6. Marta Barazzetta & Andrew E. Clark & Conchita d'Ambrosio, 2017. "Childhood Circumstances and Young Adulthood Outcomes: The Effects of Mothers' Financial Problems," Working Papers halshs-01622334, HAL.
    7. de Hond, Anne & Bakx, Pieter & Versteegh, Matthijs, 2019. "Can time heal all wounds? An empirical assessment of adaptation to functional limitations in an older population," Social Science & Medicine, Elsevier, vol. 222(C), pages 180-187.
    8. 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.
    9. Van Landeghem, Bert & Vandeplas, Anneleen, 2018. "The relationship between status and happiness: Evidence from the caste system in rural India," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 77(C), pages 62-71.
    10. 1, "undated". "," Working Papers 8123, Department of Economics, City University London.
      • 1 & 1 & 1, 2019. "," Working Papers 19/12, Department of Economics, City University London.
      • 1 & 1 & 1, 2013. "," Working Papers 13/02, Department of Economics, City University London.
    11. Hai-Anh H. Dang & Michael M. Lokshin & Kseniya Abanokova, 2019. "Did the Poor Adapt to Their Circumstances? Evidence from Long-run Russian Panel Data," Economics Bulletin, AccessEcon, vol. 39(4), pages 2258-2274.
    12. Dang, Hai-Anh & Abanokova, Kseniya & Lokshin, Michael, 2020. "Life Satisfaction, Subjective Wealth, and Adaptation to Vulnerability in the Russian Federation during 2002-2017," IZA Discussion Papers 13058, Institute of Labor Economics (IZA).
    13. Tim Reeskens & Leen Vandecasteele, 2017. "Economic Hardship and Well-Being: Examining the Relative Role of Individual Resources and Welfare State Effort in Resilience Against Economic Hardship," Journal of Happiness Studies, Springer, vol. 18(1), pages 41-62, February.
    14. Fabrice Etilé & Paul Frijters & David W. Johson & Michael A. Shields, 2017. "Modelling Heterogeneity in the Resilience to Major Socioeconomic Life Events," PSE Working Papers halshs-01485989, HAL.
    15. Hovi Matti & Laamanen Jani-Petri, 2017. "Adaptation and Loss Aversion in the Relationship between GDP and Subjective Well-being," Working Papers 1717, Tampere University, School of Management and Business, Economics.
    16. Haining Wang & Zhiming Cheng & Russell Smyth, 2015. "Does Consuming More Make You Happier? Evidence from Chinese Panel Data," Monash Economics Working Papers 29-15, Monash University, Department of Economics.
    17. Kaiser, Caspar, 2018. "People do not adapt to income changes: A re-evaluation of the dynamic effects of (reference) income on life satisfaction with GSOEP and UKHLS data," MPRA Paper 89867, University Library of Munich, Germany.
    18. Vanessa Sha Fan & Renuka Mahadevan, 2019. "The Role of Social Capital and Remote Chinese Villagers’ Well-Being," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 143(3), pages 1109-1128, June.

    More about this item

    Keywords

    SOEP; adaptation; subjective well-being; poverty; income;

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • D60 - Microeconomics - - Welfare Economics - - - General

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