Is material deprivation decreasing in Germany? A trend analysis using PASS data from 2006 to 2013

The analysis uses seven waves from the German Panel Study Labor Market and Social Security (PASS) covering the period from 2006 to 2013. During the observation period, Germany experienced a significant increase in average real incomes and employment, accompanied by a decrease of absolute income poverty as measured by the at-risk-of-poverty rate anchored at a fixed moment in time. PASS collects information on material deprivation with a list of 26 possessions and activities. The article discusses the difficulties of measuring material deprivation and identifies several sources of measurement error and selection bias. However, even when controlling for such errors and biases, regression models for different deprivation indices show a significant downward trend in material deprivation for the German resident population. Given the simultaneous decrease in absolute income poverty, it is concluded that measures of material deprivation behave like absolute income poverty indicators if the list of possessions and activities is not updated to changed living standard standards in society. A similar downward trend is observed also for individuals receiving basic income support. Moreover, supported individuals report deprivation differently depending on survey mode and number of previous panel interviews, raising the question of measurement equivalence in this subgroup.