The role of social policy in poverty reduction : a comparative study on life course changes and the dynamics of poverty in Germany and the United Kingdom

Abstract

Despite the vast research on poverty, little is known about poverty transitions at a cross-European level, particularly in a longer run. The aim of this research is to analyse the interrelation between the welfare state and poverty transitions in Germany (East and West Germany) from 1993 to 2013 and in the United Kingdom from 1991 to 2006. This study updates and extends existing comparative works on both trends and dynamics of poverty linking the cross-sectional poverty research to a longitudinal approach in Germany and the United Kingdom by employing data from Cross-National Equivalence Files (CNEF) which provides nationally representative panels. This data is used on description of poverty transitions and spells of poverty both pre-and post- transfers to evaluate the effectiveness of the social transfer of different welfare systems. Following the tradition of most comparative analyses of poverty, the poverty is measured as a relative terms and the analysis is supplemented by a measure of the sensitivity of the chosen poverty indicator. Furthermore, exit and entry rates and the duration of poverty are added to the analysis by applying discrete time event history analysis. The results of this study indicate that when poverty hit rates were compared findings followed a pattern familiar from previous studies. Most of the people never experience poverty in their life. The amount of those never facing poverty was higher in Germany than in the United Kingdom. For most of the people poverty experiences were fairly short for one or two years. The characteristics associated with shorter poverty spells and higher exit rates can be summarized as follows: having fewer children in the household, having additional adults in the household, having a household head older than 30 years, having completed high school or higher education and having a household head or partner in employment. Also, a shorter duration of poverty spell was found to be connected to a higher likelihood of leaving poverty.