TY  - RPRT
        AU  - Biewen, Martin
        TI  - The Covariance Structure of East and West German Incomes and its Implications for the Persistence of Poverty and Inequality
        PY  - 2002/Mar/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 459
        UR  - https://www.iza.org/index.php/publications/dp459
        AB  - Using data from the German Socio-Economic Panel (GSOEP), this paper analyzes the
dynamics of equivalent income in Germany in the eighties and nineties. Special emphasis is
given to the separation of permanent and transitory components, the persistence of transitory
shocks and their implications for the persistence of poverty and income inequality. The
results suggest that 52 to 69 percent of income inequality in West Germany were due to
permanent differences between individuals and that poor individuals stayed in poverty for two
years on average. In East Germany, the contribution of the permanent component to overall
income inequality increased from 20 percent in 1990 to over 70 percent in 1998 and the
persistence of poverty rose accordingly. The paper also looks at the special situation of
population subgroups such as lone mothers, ‘double income no kids’ households, couples with children and pensioners.
        KW  - covariance structure
KW  - poverty
KW  - mobility
KW  - inequality
        ER  -