Munich Personal RePEc Archive

Poverty and unemployment in Spain during the 2008's financial crises

Workneh, Migbaru Alamirew (2018): Poverty and unemployment in Spain during the 2008's financial crises.

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Abstract

The main objective of this paper is to examine the contribution of the high unemployment rate for the increase in the level of poverty and income inequality during and after the 2008 global financial crisis in Spain. Secondary household survey data from the European Union database (EU_SLIC) for 2008 and 2014 was used for the descriptive and inferential statistics. The two years are chosen purposely since 2008 was the year that the global financial crisis began, and 2014 was the year that unemployment rate was very high and Spain's economy was starting to revive from the crisis. Binary Logistic regression is used for inferential statistics since the dependent variable (being poor) is a binary variable and basic activity status(with four categorical variables), citizenship (with three categorical variables) and a number of workers in the household (as a ratio of the total number of individuals in the household) are used as explanatory variables. Based on the descriptive and inferential statistics results, the contribution of the high unemployment rate for the increase in poverty rate and income inequality was high in Spain during and after the 2008 global financial crisis. The probability of being poor for unemployed increases from 0.18 in 2008 to 0.255 in 2014. Being unemployed, being inactive households, and being from other citizens are more likely to poor compared with workers, and local citizens respectively.

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