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The Dynamics and Persistence of Poverty: Evidence from Italy

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  • Francesco Devicienti
  • Valentina Gualtieri

Abstract

This article studies the dynamics and persistence of poverty in Italy during the nineties, using the ECHP, 1994-2001. Various definitions of poverty are analyzed in parallel, income poverty, subjective poverty and a multidimensional index of life-style deprivation. For each poverty definition, the hazard rates of leaving poverty and re-entering into it are estimated and combined to compute a measure of poverty persistence that takes account of individuals’ repeated spells in poverty. The estimates provide a picture of high poverty turnover for the majority of the Italian population, which is true for any of the alternative definitions of poverty considered. Thus movements in and out of poverty cannot be simply related to spurious transitions due to measurement errors in household income. Multivariate exit and re-entry rate regressions are then estimated jointly to allow for correlated unobserved heterogeneity. The results highlight the role of demographic characteristics, the insufficiencies of the existing social security system and, above all, the weaknesses of the Italian labor market in generating persistent poverty for certain subgroups of the population.

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Bibliographic Info

Paper provided by LABORatorio R. Revelli, Centre for Employment Studies in its series LABORatorio R. Revelli Working Papers Series with number 63.

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Length: 47 pages
Date of creation: 2007
Date of revision:
Handle: RePEc:cca:wplabo:63

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Keywords: Poverty dynamics; poverty persistence; repeated spells; duration models; Italy.;

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References

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  1. Christopher Whelan & Bertrand Maître, 2006. "Comparing poverty and deprivation dynamics: Issues of reliability and validity," Journal of Economic Inequality, Springer, vol. 4(3), pages 303-323, December.
  2. Ann Huff Stevens, 1999. "Climbing out of Poverty, Falling Back in: Measuring the Persistence of Poverty Over Multiple Spells," Journal of Human Resources, University of Wisconsin Press, vol. 34(3), pages 557-588.
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  4. Francesco Devicienti, 2001. "Estimating Poverty Persistence in Britain," LABORatorio R. Revelli Working Papers Series 1, LABORatorio R. Revelli, Centre for Employment Studies.
  5. repec:ese:iserwp:99-01 is not listed on IDEAS
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  7. Arnstein Aassve & Simon Burgess & Matt Dickson & Carol Propper, 2006. "Modelling poverty by not modelling poverty: an application of a simultaneous hazards approach to the UK," LSE Research Online Documents on Economics 6243, London School of Economics and Political Science, LSE Library.
  8. Tindara Addabbo, 2000. "Poverty Dynamics: Analysis of Household Incomes in Italy," LABOUR, CEIS, vol. 14(1), pages 119-144, 03.
  9. 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.
  10. Joseph Deutsch & Jacques Silber, 2005. "Measuring Multidimensional Poverty: An Empirical Comparison Of Various Approaches," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 51(1), pages 145-174, 03.
  11. Mary Jo Bane & David T. Ellwood, 1986. "Slipping into and out of Poverty: The Dynamics of Spells," Journal of Human Resources, University of Wisconsin Press, vol. 21(1), pages 1-23.
  12. Massimo Baldini & Stefano Toso & Paolo Bosi, 2002. "Targeting welfare in Italy: old problems and perspectives on reform," Fiscal Studies, Institute for Fiscal Studies, vol. 23(1), pages 51-75, March.
  13. Conchita D'Ambrosio & Joseph Deutsch & Jacques Silber, 2009. "Multidimensional approaches to poverty measurement: an empirical analysis of poverty in Belgium, France, Germany, Italy and Spain, based on the European panel," Applied Economics, Taylor & Francis Journals, vol. 43(8), pages 951-961.
  14. Bruce D. Meyer, 1991. "Unemployment Insurance And Unemployment Spells," NBER Working Papers 2546, National Bureau of Economic Research, Inc.
  15. Franco Peracchi, 2002. "The European Community Household Panel: A review," Empirical Economics, Springer, vol. 27(1), pages 63-90.
  16. Stephen P. Jenkins, 2000. "Modelling household income dynamics," Journal of Population Economics, Springer, vol. 13(4), pages 529-567.
  17. Massimo V. Rostagno & Francesca Utili, 1998. "The Italian Social Protection System - The Poverty of Welfare," IMF Working Papers 98/74, International Monetary Fund.
  18. Lorenzo Cappellari & Stephen P. Jemkins, 2002. "Who Stays Poor? Who Becomes Poor? Evidence from the British Household Panel Survey," Economic Journal, Royal Economic Society, vol. 112(478), pages C60-C67, March.
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  20. Robert G. Valletta, 2006. "The Ins And Outs Of Poverty In Advanced Economies: Government Policy And Poverty Dynamics In Canada, Germany, Great Britain, And The United States," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 52(2), pages 261-284, 06.
  21. Ambra Poggi, 2003. "Does persistence of social exclusion exist in Spain?," Working Papers wpdea0308, Department of Applied Economics at Universitat Autonoma of Barcelona.
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Citations

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Cited by:
  1. Veronica Polin & Michele Raitano, 2012. "Poverty Dynamics in Clusters of European Union Countries: Related Events and Main Determinants," Working Papers 10/2012, University of Verona, Department of Economics.
  2. Andriopoulou, Eirini & Tsakloglou, Panagiotis, 2011. "The determinants of poverty transitions in Europe and the role of duration dependence," MPRA Paper 30659, University Library of Munich, Germany.
  3. repec:tur:wpapnw:7 is not listed on IDEAS
  4. repec:ese:iserwp:2008-24 is not listed on IDEAS
  5. Amendola, Nicola & rossi, mariacristina & Vecchi, Giovanni, 2012. "Vulnerability to poverty in Italy," MPRA Paper 38583, University Library of Munich, Germany.
    • Nicola Amendola & Mariacristina Rossi & Giovanni Vecchi, 2012. "Vulnerability to Poverty in Italy," Working papers 007, Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino.
  6. Eisenhauer, Joseph G., 2011. "The rich, the poor, and the middle class: Thresholds and intensity indices," Research in Economics, Elsevier, vol. 65(4), pages 294-304, December.
  7. Maes, Marjan, 2008. "poverty persistence among belgian elderly: true or spurious?," Working Papers 2008/10, Hogeschool-Universiteit Brussel, Faculteit Economie en Management.
  8. Marjan, MAES, 2008. "Poverty persistence among Belgian elderly in the transition from work to retirement : an empirical analysis," Discussion Papers (ECON - Département des Sciences Economiques) 2008042, Université catholique de Louvain, Département des Sciences Economiques.

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