Poverty Profiles and Well-Being: Panel Evidence from Germany

28 Pages Posted: 12 Mar 2015

See all articles by Andrew Clark

Andrew Clark

Paris School of Economics (PSE); IZA Institute of Labor Economics

Conchita D'Ambrosio

Universite du Luxembourg - Faculty of Language and Literature, Humanities, Arts and Education

Simone Ghislandi

Bocconi University - Department of Policy Analysis and Public Management

Date Written: February 2015

Abstract

We consider the link between poverty and subjective well-being, and focus in particular on the role of time. We use panel data on 49,000 individuals living in Germany from 1992 to 2012 to uncover three empirical relationships. First, life satisfaction falls with both the incidence and intensity of contemporaneous poverty. Second, poverty scars: those who have been poor in the past report lower life satisfaction today, even when out of poverty. Last, the order of poverty spells matters: for a given number of years in poverty, satisfaction is lower when the years are linked together. As such, poverty persistence reduces well-being. These effects differ by population subgroups.

Keywords: Income, Poverty, Subjective well-being, SOEP.

JEL Classification: I31, I32, D60

Suggested Citation

Clark, Andrew Eric and D'Ambrosio, Conchita and Ghislandi, Simone, Poverty Profiles and Well-Being: Panel Evidence from Germany (February 2015). SOEPpaper No. 739. Available at SSRN: https://ssrn.com/abstract=2576631 or http://dx.doi.org/10.2139/ssrn.2576631

Andrew Eric Clark (Contact Author)

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Conchita D'Ambrosio

Universite du Luxembourg - Faculty of Language and Literature, Humanities, Arts and Education ( email )

Campus Belval
2, Avenue de l'Université
Esch sur Alzette, L-4365
Luxembourg

Simone Ghislandi

Bocconi University - Department of Policy Analysis and Public Management ( email )

Via Roentgen 1
Milan, 20136
Italy

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