The relationship between income and multiple deprivation in Luxembourg: a longitudinal analysis

The relationship between income and multiple deprivation in Luxembourg is analysed. We build an index of multiple deprivation based on items belonging to several domains such as financial difficulties, possession of durable goods or housing conditions. The association between income and multiple deprivation is analysed both at a cross-sectional and longitudinal level using data from the Panel Socio-Economique ‘Liewen zu Lëtzebuerg’ (PSELL3) from 2003 to 2009. Multiple deprivation is negatively associated with income but the size of the impact is highly reduced when we control for unobserved heterogeneity. The link is different across dimensions.