Increasing poverty in Germany : differences according to region, household and age

In 2010 almost one person in six was poor in Germany. The average poverty rate has increased since 1984. The poverty risk varies according to region (East/West), type of household and age.

Overview

In 2010 more than 15 % of Germans were affected by poverty, as shows the data from the micro census conducted since 1984 by the Socio-economic panel (SOEP). This rate is following the trend of a continuous rise of poverty that started at the turn of the millennium, with only a short phase of decline in 2007.
Thus in 2010, almost one person in six, or in absolute terms, around 12.5 Million people were affected by poverty, one million people more than in 2008. For this data, poverty was defined as a living standard below 60 % of the median income, which was at 1,542 Euros in 2008 (latest data available). On the basis of this threshold, a single person living of less than 925 Euros per months was considered poor.

Poverty according to region

During the whole period observed, the poverty risk in East Germany was above the West-German rate. While the rate for the whole of Germany was at 15.3 % in 2010, it was below this average in West Germany but amounted to 20.4 % in East Germany. Although the first decade after the German reunification in 1990 has brought an improvement concerning the poverty rate in East Germany – it went down from almost 20 % in 1992 to 13.1 % by the close of the 1990s – it shot even above the level of 1992 in 2006, reaching 21 %. After a short phase of decline in 2007 it has been rising since and was more than six percentage points higher than the West German rate in 2010.This is most likely linked to the higher unemployment as well as the lack of alternative sources of income, such as capital income, due to collapsing housing prices.

Poverty according to household – risk increases with the number of children

A comparative study conducted by the SOEP for the years 1998 and 2008 also showed that the risk of poverty has increased throughout all household types, the only exceptions being couples with children aged at least 12 to 16 and women over 65 years living by themselves, both types showing a slight decrease in 2008.

Among all household types, single parents with under aged children had the highest poverty risk, amounting to over 40 % in 2008, while childless couples (30 to 65 years) had the lowest poverty risk, with a rate of just over 5 %.
Single parents with children under 3 years have a poverty risk of more than 50 %. But also families consisting of two adults but with three or more children have a higher risk of poverty.
Although the poverty rate for children is above average, the existence of a child in a household is not necessarily linked to a higher poverty risk. When differentiating the number of children living in a household, the statistics show that a household consisting of two adults and two children have a poverty risk of 13.4 %, which is below the average of 15.3 %. However, with a number of children of three or more, the poverty risk increases significantly, mounting to 22 % for families with three, and 36 % for those with four or more children. In comparison to the data from 1998, the poverty risk for families with many children has increased dramatically.

Poverty according to age

In 2008, the lowest risk of poverty could be found among the 46 to 55 year olds. At this stage of life persons have normally finished their educational career and the employment rate is high. In addition, with the children grown up, there are less problems of reconciling family and career. However, also here the poverty risk had risen between 1998 and 2008 from six to about eleven percent, staying however below the 2008 average of 14 %.
In the first years after retirement (66 to 76 years) the poverty rate was also below this average, it rises however above average for the persons older than 76 years. This could be related to the lower life expectancy of men and thus the cuts in life standards for widowed older women, who often rely on a lower pension payment.

A risk-of-poverty rate way over the average can be observed among children and young adults. In 2008 almost one quarter of those aged 19 to 25 lived below the poverty threshold, making this the highest gain (+6 percentage points) among all age groups compared to the rate of 1998. This development is due to three major factors : First, the time spent enrolled in education or training programs has increased for all ages in this group, which delays the entry into the labor market and the earning of income. Secondly, the entry into the labor market often starts with precarious employments or internships (“internship generation”). Thirdly, a tendency towards moving out of the parental home can be observed among young adults, increasing the number of one-person and single-parent households. The poverty rate of young adults living alone mounted up to 65 % in 2008.

Although the data collected in the SOEP is based on self-declared real income, it must be added that it is not possible to know where this income comes from. Young people who get financial aid from their parents, although it may allow them only a poor living standard, could be considered as "better off" than those who have to work to attain the same low standard of living.

Please click here to read the full report "Weiterhin hohes Armutsrisiko in Deutschland : Kinder und junge Erwachsene sind besonders betroffen" by Markus Grabka and Joachim Frick (in German only).

Source : Markus Grabka and Joachim Frick "Weiterhin hohes Armutsrisiko in Deutschland : Kinder und junge Erwachsene sind besonders betroffen", DIW Weekly Report 07/2010.


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19 octobre 2012

Thèmes : • Pauvreté • Europe occidentale

Analyses

En partenariat

Le Panel Socio-économique Allemand (SOEP) est une étude sur le long-terme et longitudinale conduite sur la base d’un panel représentatif de ménages privés. Il est situé à l’Institut allemand de recherche économique (DIW), à Berlin.

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