Long and short term poverty: Is Germany a two-thirds society?

Abstract

Social scientists and media commentators have expressed concern that Western countries are becoming "two-thirds societies" in which two-thirds enjoy the benefits of affluence, while one-third are locked into poverty or near-poverty. This paper, based on economic panel data, tests the two-thirds society hypothesis in the case of (West) Germany 1984-89. The main finding is that poverty (defined as receiving less than half of average household income) is mostly short term and that nothing like one-third are locked into poverty. On the other hand, far more people than had previously been thought are at risk of poverty. In 1984-89 only 3% were poor every year but about 25% were poor in at least o..