Longitudinal Poverty and Income Inequality a Comparative Panel Study for the Netherlands, Germany and the UK

Abstract

The increasing availability of longitudinal data on income in Europe greatly facilitates the analysis of income and poverty dynamics. In this paper, the results of longitudinal data- analyses on income and poverty in three European welfare states are reported. Using panel data for Germany, the Netherlands and the UK a variety of longitudinal inequality and poverty measures have been applied to reveal these dynamics. The focus will be on so-called poverty profiles indicating whether people belong to the permanent poor, the transient poor, the recurrent poor or the never poor. Multinomial regression models are estimated that aim to explain the likelihood of belonging to each of the poverty profiles over time and on the events that trigger the belonging to the poverty profiles over time. Our results show that there is a great deal of economic mobility in and out of poverty over time. Most of the poor are only poor for a short period of time but, nevertheless, a substantial part of the population is found to be persistent poor. This is particularly the case in the UK. In matured welfare states, income mobility and persistency of poverty are co-occurring. Our analysis of poverty profiles shows that especially labor market events trigger the belonging to the persistent, the recurrent or the transient poor.