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Estimating Poverty Persistence in Britain

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Author Info
Francesco Devicienti

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Abstract

This paper uses longitudinal data from the BHPS, waves 1-8, to document low-income dynamics and persistence for individuals living in Britain in the 1990s. Poverty exit and re-entry rates are estimated and the resulting distribution of time spent in poverty is calculated, both in single and in multiple-spells frameworks. Poverty persistence predictions are also produced for various subgroups of the populations. To do this, I estimate a multiple-spell model of transitions in and out of poverty, controlling for observed and correlated unobserved individual heterogeneity and for a potential initial condition problem. Components-of-variance models are also used to predict the number of years in poverty for the targeted groups. The two sets of predictions are then compared.

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Publisher Info
Paper provided by LABORatorio R. Revelli, Centre for Employment Studies in its series LABORatorio R. Revelli Working Papers Series with number 1.

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Length: 48 pages
Date of creation: 2001
Date of revision:
Handle: RePEc:cca:wplabo:1

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Related research
Keywords: poverty persistence; hazard models; multiple spells; unobserved heterogeneity; variance-components models;

Other versions of this item:

Find related papers by JEL classification:
I32 - Health, Education, and Welfare - - Welfare and Poverty - - - Measurement and Analysis of Poverty
C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data
C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis

References listed on IDEAS
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  1. Flinn, Christopher J & Heckman, James J, 1983. "Are Unemployment and Out of the Labor Force Behaviorally Distinct Labor Force States?," Journal of Labor Economics, University of Chicago Press, vol. 1(1), pages 28-42, January. [Downloadable!] (restricted)
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  2. Bourguignon, F. & Morrisson, C. & Atkinson, A.B., 1991. "Empirical Studies of Earnings Mobility," DELTA Working Papers 91-14, DELTA (Ecole normale supérieure).
  3. Heckman, James & Singer, Burton, 1984. "A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data," Econometrica, Econometric Society, vol. 52(2), pages 271-320, March. [Downloadable!] (restricted)
  4. Böheim, René & Taylor, Mark P, 2000. "Unemployment Duration and Exit States in Britain," CEPR Discussion Papers 2500, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  5. Meyer, Bruce D, 1990. "Unemployment Insurance and Unemployment Spells," Econometrica, Econometric Society, vol. 58(4), pages 757-82, July. [Downloadable!] (restricted)
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  6. Abowd, John M & Card, David, 1989. "On the Covariance Structure of Earnings and Hours Changes," Econometrica, Econometric Society, vol. 57(2), pages 411-45, March. [Downloadable!] (restricted)
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  7. Ondrich, Jan & Rhody, Stephen E., 1999. "Multiple spells in the Prentice-Gloeckler-Meyer likelihood with unobserved heterogeneity," Economics Letters, Elsevier, vol. 63(2), pages 139-144, May. [Downloadable!] (restricted)
  8. Meghir, Costas & Whitehouse, Edward, 1997. "Labour market transitions and retirement of men in the UK," Journal of Econometrics, Elsevier, vol. 79(2), pages 327-354, August. [Downloadable!] (restricted)
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  9. Jenkins, Stephen P, 1995. "Easy Estimation Methods for Discrete-Time Duration Models," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 57(1), pages 129-38, February.
  10. Ann Huff Stevens, 1995. "Climbing Out of Poverty, Falling Back In: Measuring the Persistence of Poverty over Multiple Spells," NBER Working Papers 5390, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  11. Cappellari, Lorenzo, 2000. "The Covariance Structure of Italian Male Wages," Manchester School, University of Manchester, vol. 68(6), pages 659-84, December. [Downloadable!] (restricted)
  12. Lillard, Lee A & Willis, Robert J, 1978. "Dynamic Aspects of Earning Mobility," Econometrica, Econometric Society, vol. 46(5), pages 985-1012, September. [Downloadable!] (restricted)
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  13. Ham, John C & LaLonde, Robert J, 1996. "The Effect of Sample Selection and Initial Conditions in Duration Models: Evidence from Experimental Data on Training," Econometrica, Econometric Society, vol. 64(1), pages 175-205, January. [Downloadable!] (restricted)
  14. Burgess, Simon & Propper, Carol, 1998. "An Economic Model of Household Income Dynamics, with an Application to Poverty Dynamics among American Women," CEPR Discussion Papers 1830, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  15. Gottschalk, Peter & Moffitt, Robert A, 1994. "Welfare Dependence: Concepts, Measures, and Trends," American Economic Review, American Economic Association, vol. 84(2), pages 38-42, May. [Downloadable!] (restricted)
  16. Stephen P. Jenkins, 2000. "Modelling household income dynamics," Journal of Population Economics, Springer, vol. 13(4), pages 529-567. [Downloadable!] (restricted)
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Cited by:
(explanations, 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.)

  1. Anna Giraldo & Enrico Rettore & Ugo Trivellato, 2002. "The persistence of poverty: true state dependence or unobserved heterogeneity? Some evidence from the Italian Survey on Household Income and Wealth," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 B2-1, International Conferences on Panel Data. [Downloadable!]
  2. Glauben, Thomas & Herzfeld, Thomas & Wang, Xiaobing, 2006. "The Persistence of Poverty in Rural China: Applying an Ordered Probit and a Hazard Approach," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25249, International Association of Agricultural Economists. [Downloadable!]
  3. Martin Biewen, 2002. "The Covariance Structure of East and West German Incomes and its Implications for the Persistence of Poverty and Inequality," Discussion Papers of DIW Berlin 292, DIW Berlin, German Institute for Economic Research. [Downloadable!]
    Other versions:
  4. Michael Fertig & Marcus Tamm, 2007. "Always Poor or Never Poor and Nothing in Between? Duration of Child Poverty in Germany," RWI Discussion Papers 0056, Rheinisch-Westfälisches Institut für Wirtschaftsforschung. [Downloadable!]
    Other versions:
  5. Martin Biewen, 2003. "Who Are the Chronic Poor?: Evidence on the Extent and the Composition of Chronic Poverty in Germany," Discussion Papers of DIW Berlin 350, DIW Berlin, German Institute for Economic Research. [Downloadable!]
    Other versions:
  6. Jorgen Hansen & Roger Wahlberg, 2009. "Poverty and its persistence: a comparison of natives and immigrants in Sweden," Review of Economics of the Household, Springer, vol. 7(2), pages 105-132, June. [Downloadable!] (restricted)
  7. Francesco Devicienti & Valentina Gualtieri, 2007. "The Dynamics and Persistence of Poverty: Evidence from Italy," LABORatorio R. Revelli Working Papers Series 63, LABORatorio R. Revelli, Centre for Employment Studies. [Downloadable!]
  8. repec:ese:iserwp: is not listed on IDEAS
  9. Hansen, orgen & Wahlberg, Roger, 2004. "Poverty Persistence in Sweden," IZA Discussion Papers 1209, Institute for the Study of Labor (IZA). [Downloadable!]
  10. Lorenzo Cappellari & Stephen P. Jenkins, 2004. "Modelling low income transitions," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 19(5), pages 593-610. [Downloadable!]
    Other versions:
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