Sources of Income Persistence: Evidence from Rural El Salvador
AbstractThis article uses a unique panel data set of rural El Salvador to investigate the main sources of persistence and variability in incomes. Our econometric framework validly reduces a general panel model to a dynamic linear model with a covariance structure that can be estimated efficiently with short panels. We find that life-cycle incomes are largely explained by the productive characteristics of families, such as education and access to public goods, and unobserved heterogeneity. Pure state dependence, arising from income shocks persistency, is of second order. In El Salvador, frequent transitory shocks are a more important source of income variation than in developed countries.
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Bibliographic InfoArticle provided by Journal of Income Distribution in its journal Journal of Income Distribution.
Volume (Year): 20 (2011)
Issue (Month): 1 (March)
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income mobility; income dynamics; poverty traps; panel data; El Salvador;
Find related papers by JEL classification:
- I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
- D1 - Microeconomics - - Household Behavior
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
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- Cerro, Ana María & Ortega, Ana Carolina, 2012. "Sources of Regional Crime Persistence Argentina 1980-2008," MPRA Paper 44482, University Library of Munich, Germany.
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