Income Inequality and Poverty in Front of and During the Economic Crisis – An Empirical Investigation for Germany 2002-2010

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 increase of persons, who stayed within the poverty region, occurred between 2008 and 2009 (compared with 2007/2008)