The persistence of poverty: true state dependence or unobserved heterogeneity? Some evidence from the Italian Survey on Household Income and Wealth
AbstractEvidence 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 InfoPaper 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.
Date of creation: Jan 2002
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Attrition ignorability; Discrete response panel data models; Poverty dynamics;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2002-07-04 (All new papers)
- NEP-LTV-2002-07-04 (Unemployment, Inequality & Poverty)
- NEP-MIC-2002-07-05 (Microeconomics)
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