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Relative Inequality and Poverty in Germany and the United States Using Alternative Equivalence Scales

Author

Listed:
  • Richard V. Burkhauser
  • Timothy M. Smeeding
  • Joachim Merz

    () (LEUPHANA University Lüneburg,Department of Economic, Behaviour and Law Sciences, Research Institute on Professions (Forschungsinstitut Freie Berufe (FFB)))

Abstract

German and United States data from the Luxembourg Income Study are used to compare the relative economic well-being of Germans and Americans in the 1980s. In our analysis we use both official equivalence scales and consumption-based country-specific equivalence scales developed for Germany and the United States by Merz et al. (1993). We verify previous studies that show that inequality and the incidence of poverty are greater in the United States than in Germany. Overall inequality and poverty levels are found not to be sensitive to the equivalence scale used. But the official German equivalence scales yields quite different results from those using all other scales with respect to the relative income and poverty levels of vulnerable groups within the population, especially older single people.

Suggested Citation

  • Richard V. Burkhauser & Timothy M. Smeeding & Joachim Merz, 1994. "Relative Inequality and Poverty in Germany and the United States Using Alternative Equivalence Scales," FFB-Discussionpaper 12, Research Institute on Professions (Forschungsinstitut Freie Berufe (FFB)), LEUPHANA University Lüneburg.
    • Handle: RePEc:leu:wpaper:12
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    File URL: http://www.leuphana.de/fileadmin/user_upload/Forschungseinrichtungen/ffb/files/publikationen/diskussion/DP_12_inequality_poverty.pdf
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    References listed on IDEAS

    as
    1. Merz, Joachim & Garner, Thesia & Smeeding, Timothy M. & Faik, Jürgen & Johnson, David, 1994. "Two Scales, One Methodology - Expenditure Based Equivalence Scales for the United States and Germany," MPRA Paper 7233, University Library of Munich, Germany.
    2. Burkhauser, Richard V, et al, 1990. "Economic Burdens of Marital Disruptions: A Comparison of the United States and the Federal Republic of Germany," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 36(4), pages 319-333, December.
    3. Jenkins, Stephen P & Cowell, Frank A, 1994. "Parametric Equivalence Scales and Scale Relativities," Economic Journal, Royal Economic Society, vol. 104(425), pages 891-900, July.
    4. Coulter, Fiona A E & Cowell, Frank A & Jenkins, Stephen P, 1992. "Equivalence Scale Relativities and the Extent of Inequality and Poverty," Economic Journal, Royal Economic Society, vol. 102(414), pages 1067-1082, September.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    alternative equivalence scale; Germany; USA; distribution of income; inequality; poverty;
    All these keywords.

    JEL classification:

    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • D30 - Microeconomics - - Distribution - - - General
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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