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Income inequality and poverty in front of and during the economic crisis – An empirical investigation for Germany 2002-2010

Working Paper 2012-255

Abstract

Based on data from the German Socio-Economic Panel (SOEP), both income inequality and poverty are considered for Germany in front of and during the economic crisis 2008-2010. This comprises binary logistic regressions where it is tested whether a person is belonging to a certain income region or not. The units of analysis are differentiated by residential status, nationality, sex, age, household size/household type, employment status, etc. For instance, the likelihood of unemployed persons for being located in the low-income region weakly increased between 2007 and 2009. Those microeconomic calculations are correlated with the macroeconomic variables economic growth, inflation, and general unemployment. At the peak of the crisis – in 2009 – inequality dropped, and it increased afterwards. Poverty was not
affected very much by economic developments during the crisis but at least an in-crease of persons, who stayed within the poverty region, occurred between 2008 and 2009 (compared with 2007/2008).

Authors: Jürgen Faik.

Keywords: Personal income distribution, welfare, inequality, poverty, economic crisis
JEL: D30, D31, D60.