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Poverty Persistence in Sweden

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  • Hansen, Jörgen
  • Wahlberg, Roger
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    Abstract

    This Paper analyses the persistence of poverty in Sweden using a hazard rate model based on multiple spells. The model also accounts for unobserved heterogeneity and possibly endogenous initial conditions. We estimate the model on a large representative Swedish panel dataset, LINDA, for the years 1991-2001. The data contains precise information on household disposable income obtained from individual tax files. Poverty is defined using information on annual minimum needs standards determined by the Swedish National Board of Health and Welfare. The data indicates that poverty rates are highest for immigrants, especially refugee immigrants, and for households with children. Further, poverty rates declined, both for natives and for immigrants, between 1991 and 2001, partly as a result of improved labour market conditions. The empirical results suggest that there is significant negative duration dependence in both exit and entry hazard rates. Moreover, the transition rates are significantly affected by immigrant status, educational attainment, labour market conditions, age, and family status. Accounting for multiple spells shows that for two-parent families with two children who are represented by a male person, 44% of native households that fall into poverty at any given point in time remain poor in five or more out of the next ten years. For refugee and non-refugee households, the figures are 62% and 50%, respectively.

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    Bibliographic Info

    Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 4539.

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    Date of creation: Aug 2004
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    Handle: RePEc:cpr:ceprdp:4539

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    Related research

    Keywords: duration dependence; multiple spells; poverty persistence; unobserved heterogeneity;

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    Cited by:
    1. Francesco Devicienti, 2011. "Estimating poverty persistence in Britain," Empirical Economics, Springer, vol. 40(3), pages 657-686, May.
    2. 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.
    3. 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.
    4. 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.
    5. Bigsten, Arne & Shimeles, Abebe, 2008. "Poverty Transition and Persistence in Ethiopia: 1994-2004," World Development, Elsevier, vol. 36(9), pages 1559-1584, September.
    6. Maes, Marjan, 2008. "poverty persistence among belgian elderly: true or spurious?," Working Papers 2008/10, Hogeschool-Universiteit Brussel, Faculteit Economie en Management.
    7. Matthew Lindquist & Gabriella Sjögren Lindquist, 2012. "The dynamics of child poverty in Sweden," Journal of Population Economics, Springer, vol. 25(4), pages 1423-1450, October.

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