Relative Inequality and Poverty in Germany and the United States Using Alternative Equivalence Scales

FFB Discussion Paper No.12

36 Pages Posted: 11 Jun 2009

See all articles by Joachim Merz

Joachim Merz

Research Institute on Professions; Research Institute on Professions; Leuphana University of Lueneburg; Institute for the Study of Labor (IZA)

Date Written: November 1994

Abstract

German and United States data from the Luxembourg Income Study are used to compare the relative economic well-being of Germans and Americans in the 1980s. In our analysis we use both official equivalence scales and consumption-based country-specific equivalence scales developed for Germany and the United States by Merz et al. (1993). We verify previous studies that show that inequality and the incidence of poverty are greater in the United States than in Germany. Overall inequality and poverty levels are found not to be sensitive to the equivalence scale used. But the official German equivalence scales yields quite different results from those using all other scales with respect to the relative income and poverty levels of vulnerable groups within the population, especially older single people.

Keywords: alternative equivalence scale, Germany, USA, distribution of income, inequality, poverty

JEL Classification: I30, I32, D30, D31

Suggested Citation

Merz, Joachim and Merz, Joachim, Relative Inequality and Poverty in Germany and the United States Using Alternative Equivalence Scales (November 1994). FFB Discussion Paper No.12, Available at SSRN: https://ssrn.com/abstract=1413651

Joachim Merz (Contact Author)

Research Institute on Professions ( email )

Lüneburg
Germany

Research Institute on Professions ( email )

Lüneburg
Germany

Leuphana University of Lueneburg

Scharnhorststrasse 1
Lüneburg, 21314
Germany

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany