Time and Income Poverty: An Interdependent Multidimensional Poverty Approach with German Time Use Diary Data

This study contributes to the multidimensional poverty discussion in two ways. First, we argue for and consider time-in particular genuine personal leisure time-as an important and prominent resource, additional to income, for everyday activities and individual well-being. Second, we evaluate and quantify the interdependence among the multiple poverty dimensions (via a CES well-being function and SOEP data) of the German population instead of arbitrarily choosing substitution parameters. We characterize the working poor and their multidimensional poverty regimes by descriptive results and by multinomial logit estimation based on German 2001/02 time use diary data. We find that the interdependence between time and income is significant. There is an important fraction of time poor individuals who are assigned not to compensate their time deficit even by above poverty threshold income. These poor people in particular have so far been ignored in the literature on poverty and well-being as well as the time pressure/time crunch.