It is common to analyse poverty data broken down by household or economic status. Implicitly, it is assumed that people change state (for example, single, married, children, no children) for exogenous reasons. If we bring economic behaviour into the problem, then such transitions become endogenous. The data are then insufficient to identify the claims made from them. The distribution of the characteristics of the individuals in the states will be endogenous, and the state average poverty rate will depend on the composition of the individuals in the state as well as on the economic impact of being in that state per se. In this paper, we set out a simple model with endogenous transitions to make our point, and apply this to Family Expenditure Survey data for Britain. We show that our argument has empirical content for Britain.
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Find related papers by JEL classification: D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution I32 - Health, Education, and Welfare - - Welfare and Poverty - - - Measurement and Analysis of Poverty J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Jantti, Markus & Danziger, Sheldon, 2000.
"Income poverty in advanced countries,"
Handbook of Income Distribution,
in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 6, pages 309-378
Elsevier.
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