POVERTY LINES IN EAST AND WEST GERMANY, 2005-2017

 

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The poverty line for single-person households in Germany has risen continually1 in recent years – in both East and West Germany. For Germany as a whole, the poverty line in 2005 was 736 euros a month. By 2017 it had risen to 999 euros. This means that everyone living on his/her own with a monthly net income below 999 euros in 201 was deemed poor.

The poverty line for families with two children also rose constantly from 2005 to 2017. Families with two adults and two children under the age of 14 were considered poor in Germany in 2005 if their monthly net income was less than 1,545 euros. In 2005 the poverty threshold was 1,366 euros in East Germany and 1,600 euros in West Germany. By 2017 the poverty lines had risen to 2,099 euros for Germany, 2,125 euros for West Germany, and 1,921 euros for East Germany.

By definition, the trend in poverty lines follows that of net income. When median income rises, the poverty line invariably does, too.

1Until 2011 the data were based on the census in 1987. Since then the census 2011 has been used for the calculations. Therefore, data before and after 2011 are not fully comparable.


Further explanations

Poverty line: the poverty line is at 60 per cent of the median equivalised net income of the population in private housholds.

Equivalised income: the equivalised income is taken to compare the incomes of households of different sizes. This makes allowance for the fact that although larger households require more living space, food, clothing, etc., in some spheres of life they incur lower costs per capita than in a single-person household through the joint use of kitchen and bath, joint insurance policies, etc. It is also assumed that younger children need less than adults. The equivalised income is derived from the sum of the incomes of all members of the household divided by a figure generally worked out using the “modified OECD equivalence scale”. The head of the household is assigned a weighting factor of 1. To make allowance for the benefits of joint housekeeping, other persons aged 14 and over are given a value of 0.5. Children under 14 years of age are assigned a value of 0.3. So, the household income of a family with two children under 14 would be divided by 2.1.

Median income: the median income is the value that is exactly in the middle when all incomes are arranged in ascending order.

Net household income: the net household income is the total incomes of all members of a household after taxes and social security contributions. These incomes include compensation of employees, corporate and investment income, state transfer payments, and savings on rent through owner occupancy.

References

Amtliche Sozialberichterstattung des Bundes und der Länder (Official System Of Social Reporting)

 

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