Household-level Prevalence and Poverty Penalties of Working in Non-teleworkable and Non-essential Occupations:Evidence from East and West Germany in 2019

Abstract

AbstractHouseholds are prime locations of risk pooling and redistribution. Household constellations in terms of the number of earners and their occupations define households’ capacity to cushion crises such as the COVID-19 pandemic or rising inflation. The occupational structure and the sociodemographic composition of households continue to vary widely between the former East and West German regions. Against the background of rising levels of in-work poverty in recent years, we extend the prevalence and penalties framework as used in poverty research to two occupational risks that gained significance in post-COVID-19 labour markets. Our study addresses two questions: 1) How prevalent were household constellations in which the sole earner or both earners worked in an occupation that was both non-teleworkable and non-essential (NTNE) in East and West Germany in 2019? 2) Did the poverty penalty associated with the sole or both earners working in NTNE occupations differ in East and West Germany in 2019? The most recent available data from the German Microcensus (2019, N=179,755 households) is linked to new data collected on the teleworkability of occupations and occupations’ classification as essential by German federal state decrees in the spring of 2020. Descriptive statistics and regression models show that the prevalence of household constellations where the sole earner or both earners worked in NTNE occupations was relatively similar across East and West Germany. In contrast to overall similar prevalence, in East Germany the poverty penalty associated with the sole or both earners working in NTNE occupations was substantially elevated. Controlling for known occupational disadvantages, including low education, fixed-term contracts, shift work and the lack of leadership responsibilities narrowed but did not eliminate the sizeable gap in poverty penalties associated with NTNE occupations between East and West Germany.