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Poverty risk for German families higher than previously-recognized: study
February 08,2018   By:Xinhua
BERLIN, Feb.8,2018-- The risk of falling into poverty is more widespread among German families than indicated by official statistics, a study published on Wednesday by the Bertelsmann Foundation warned.
 
"Many families are poorer than previously assumed," the study read.
 
The Guetersloh-based think-tank commissioned researchers at the University of Bochum to develop a novel methodology to assess the financial health of German families. The study pays greater attention to the differential experiences of wealthy and poor households. For example, a single mother on a low income would be more likely to have to move to a larger home following the birth of her first child than a high-income earning couple.
 
To gain a "more realistic perspective", the study authors drew on detailed national income and expenditure data from the Federal Statistical Office to model the actual additional costs of children imposed on high and low-income families. In so doing, the Bertelsmann Foundation sought to challenge the widespread approach across the OECD group of highly-industrialized nations that measure poverty risk ratios on the basis of so-called "equivalence average income".
 
POOR FAMILIES RICHER UNDER OECD METHOD
 
In the equivalence average income measurement method, "poor families were calculated to be richer than they actually are," the study found. Using the new methodology, the poverty risk ratio among German families rose by around three percentage points compared to official estimates to a total of 13 percent for couples with one child, 16 percent for couples with two children, and 18 percent for couples with three children.
 
The difference in measurement outcomes was even more dramatic for single parents, 68 percent (an additional 20 percent) of which were found to be at risk of poverty. The study further showed that couples with children or single parents were consistently worse off than childless couples in Germany during the past 25 years.
 
"The financial situation of families becomes more difficult with every additional child," Bertelsmann Foundation director Joerg Draeger said in a statement.
 
CHILD BENEFIT
 
Speaking to Xinhua on Wednesday, Bertelsmann Foundation expert Sarah Menne highlighted that applying the new methodology to other OECD countries would "certainly also reveal a greater social divide than previously assumed" by policymakers.
 
Menne noted that unlike the expansion of affordable high-quality child care, child benefit payments had done little to alleviate the situation in Germany. She advocated for the creation of a means-tested system of state financial assistance for families.
 
However, the Bertelsmann expert said that despite increasing poverty among children and families, the new coalition agreement reached on Wednesday between the Christian Democratic Union (CDU), Christian Social Union (CSU) and German Social Democrats (SPD) represented "more of the same".
 
According to Menne, the new government's plan to raise the child benefit by 25 euros for all of its recipients would be expensive without be able to offer meaningful assistance to impoverished children with the "most urgent need" in Germany.
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