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The persistence of poverty: true state dependence or unobserved heterogeneity? Some evidence from the Italian Survey on Household Income and Wealth

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Author Info

  • Anna Giraldo

    (Dip. di Scienze Statistiche, Univ. di Padova)

  • Enrico Rettore

    (Dip. di Scienze Statistiche, Univ. di Padova)

  • Ugo Trivellato

    (Dip. di Scienze Statistiche, Univ. di Padova)

Abstract

Evidence from several countries is that any household experiencing poverty today is much more likely to experience it again, which may be due to both unobserved heterogeneity (UH) and true state dependence (TSD). We point out that in this context there are two sources of UH: (1) the household ability to obtain income at a specific time period and (2) the way in which this ability evolves from that time period onwards. We test for TSD using a panel from Italy. After testing for the ignorability of the massive attrition plaguing the panel and accepting it, we do not find any sign of TSD.

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Bibliographic Info

Paper provided by International Conferences on Panel Data in its series 10th International Conference on Panel Data, Berlin, July 5-6, 2002 with number B2-1.

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Date of creation: Jan 2002
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Handle: RePEc:cpd:pd2002:b2-1

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Related research

Keywords: Attrition ignorability; Discrete response panel data models; Poverty dynamics;

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References

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  1. Stewart, Mark B & Swaffield, Joanna K, 1999. "Low Pay Dynamics and Transition Probabilities," Economica, London School of Economics and Political Science, vol. 66(261), pages 23-42, February.
  2. Devicienti, Francesco, 2002. "Estimating Poverty Persistence in Britain," Royal Economic Society Annual Conference 2002 61, Royal Economic Society.
  3. Brandolini, A., 1999. "The Distribution of Personal Income in Post-War Italy: Source Description, Date Quality, and the Time Pattern of Income Inequality," Papers 350, Banca Italia - Servizio di Studi.
  4. 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.
  5. Arellano, Manuel & Honore, Bo, 2001. "Panel data models: some recent developments," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 53, pages 3229-3296 Elsevier.
  6. 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.
  7. Gary Chamberlain, 1982. "Panel Data," NBER Working Papers 0913, National Bureau of Economic Research, Inc.
  8. Lorenzo Cappellari, 1999. "Low-pay transitions and attrition bias in Italy : An analysis using simulation based estimation," The Warwick Economics Research Paper Series (TWERPS) 532, University of Warwick, Department of Economics.
  9. Duncan, Greg J, et al, 1993. "Poverty Dynamics in Eight Countries," Journal of Population Economics, Springer, vol. 6(3), pages 215-34.
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Cited by:
  1. Alem, Yonas, 2013. "Poverty Persistence and Intra-Household Heterogeneity in Occupations: Evidence from Urban Ethiopia," Working Papers in Economics 580, University of Gothenburg, Department of Economics.
  2. Giuliana Parodi & Dario Sciulli, 2012. "Disability and low income persistence in Italian households," International Journal of Manpower, Emerald Group Publishing, vol. 33(1), pages 9-26, June.
  3. Rafael Perez Ribas & Ana Flávia Machado, 2007. "Distinguishing Chronic Poverty from Transient Poverty in Brazil: Developing a Model for Pseudo-Panel Data," Working Papers 36, International Policy Centre for Inclusive Growth.
  4. Parodi, Giuliana & Sciulli, Dario, 2012. "Disability and Social Exclusion Dynamics in Italian Households," MPRA Paper 42445, University Library of Munich, Germany.
  5. Rafael Perez Ribas & Ana Flávia Machado & André Braz Golgher, 2006. "Fluctuations and persistence in poverty: a transient-chronic decomposition model for pseudo-panel data," Textos para Discussão Cedeplar-UFMG td290, Cedeplar, Universidade Federal de Minas Gerais.
  6. 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.

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