Why Are Child Poverty Rates Higher in Britain than in Germany?

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.