Why are Child Poverty Rates Higher in Britain than in Germany? A Longitudinal Perspective

Abstract

We analyze why child poverty rates were much higher in Britain than in Western Germany during the 1990s, using a framework focusing on poverty transition rates. Child poverty exit rates were significantly lower, and poverty entry rates significantly higher, in Britain. We decompose these cross-national differences into differences in the prevalence of “trigger events” (changes in household composition, household labor market attachment, and labor earnings), and differences in the chances of making a poverty transition conditional on experiencing a trigger event. The latter are the most important in accounting for the cross-national differences in poverty exit and entry rates.