Extreme Poverty in Wealthy Nations

While we have by now detailed knowledge of the dynamics of income, consumption and wealth at the top of the distribution, much less is known about the other end, i.e. the poorest households. What are the key determinants of poverty and homelessness? What are their dynamics, i.e., are they transitory or persistent, and what factors drive people's entry into, and chances to break out of, poverty? What are the respective roles of individual or household characteristics versus local economic conditions, such as labor market and cost of living? In this paper, the authors of the paper presented in this Mannheim Apllied Seminar offer new empirical facts and insights into the demography, geography, and dynamics of extreme poverty in an advanced market economy, based on a novel data set from France’s largest food assistance charity that is unique in its - near universal - coverage of low-income households. Preliminary results suggest the presence of substantial non-housing subsistence expenditures, and they identify subsidized housing availability as a critical gateway out of homelessness.