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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

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    More about this item

    Keywords

    SOEP; adaptation; subjective well-being; poverty; income;
    All these keywords.

    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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