Advanced Search
MyIDEAS: Login to save this paper or follow this series

poverty persistence among belgian elderly: true or spurious?

Contents:

Author Info

  • Maes, Marjan

    ()
    (Hogeschool-Universiteit Brussel (HUB), Belgium
    Katholieke Universiteit Leuven, Belgium)

Abstract

On the basis of a longitudinal administrative dataset (1991-2002) merged with the socioeconomic survey of 2001 and the national register, the majority of the poor elderly in Belgium appear to be persistently poor. The question arises why this might be so. To the extent that individual characteristics such as low abilities persist over time, they may also be the reason that individuals persist in poverty over time. In that case, one expects that once individual characteristics are controlled for, duration dependence becomes spurious. The alternative possibility is that poverty experience has a causal impact on future poverty. This may be because of a poverty trap: people may be given an incentive not to work while at the same time they slip into poverty. Or this may be due to depreciation of human capital or loss of motivation. The reasons for dependence in poverty are of interest for developing effective poverty reducing measures since true dependence would suggest to focus on stigma and adverse labour market incentives while spurious dependence would suggest to change individual’s characteristics. The simultaneous estimation of a multiple-spell discrete- time hazard model of transitions in and out of poverty, that allows for unobserved effects and a significant initial condition problem, lends strong empirical support for true duration dependence in poverty. This suggestion sounds reasonable since elderly unemployed are exempted from the search for a job and thus easily exposed to depreciation of human capital and employers are reluctant to invest in the human capital of elderly workers. In addition both employers and the Belgian government design retirement schemes that give elderly strong incentives to leave the labour market as soon as possible.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://lirias.hubrussel.be/handle/123456789/2214
Download Restriction: no

Bibliographic Info

Paper provided by Hogeschool-Universiteit Brussel, Faculteit Economie en Management in its series Working Papers with number 2008/10.

as in new window
Length: 37 pages
Date of creation: Feb 2008
Date of revision:
Handle: RePEc:hub:wpecon:200810

Contact details of provider:
Web page: http://research.hubrussel.be
More information through EDIRC

Related research

Keywords: poverty dynamics; poverty persistence; early retirement; retirement incentives; multiple spell discrete-time hazard model;

Other versions of this item:

References

References listed on IDEAS
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.:
as in new window
  1. Costas Meghir & Edward Whitehouse, 1993. "Labour market transitions and retirement of men in the UK," IFS Working Papers W93/12, Institute for Fiscal Studies.
  2. Tamm, Marcus, 2008. "Does money buy higher schooling?: Evidence from secondary school track choice in Germany," Economics of Education Review, Elsevier, vol. 27(5), pages 536-545, October.
  3. Muriel Dejemeppe & Bart Cockx, 2005. "Duration dependence in the exit rate out of unemployment in Belgium. Is it true or spurious?," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(1), pages 1-23.
  4. Ruud Muffels & Didier Fouarge, 2004. "The Role of European Welfare States in Explaining Resources Deprivation," Social Indicators Research, Springer, vol. 68(3), pages 299-330, September.
  5. Francesco Devicienti, 2011. "Estimating poverty persistence in Britain," Empirical Economics, Springer, vol. 40(3), pages 657-686, May.
  6. Stewart, M.B. & Swaffield, J.K., 1997. "Low Pay Dynamics and Transition Probabilities," The Warwick Economics Research Paper Series (TWERPS) 495, University of Warwick, Department of Economics.
  7. Jean-Marc Burniaux & Flavio Padrini & Nicola Brandt, 2006. "Labour Market Performance, Income Inequality and Poverty in OECD countries," OECD Economics Department Working Papers 500, OECD Publishing.
  8. Biewen, Martin, 2003. "Who Are the Chronic Poor? Evidence on the Extent and the Composition of Chronic Poverty in Germany," IZA Discussion Papers 779, Institute for the Study of Labor (IZA).
  9. David Dorn & Alfonso Sousa-Poza, 2005. "Early Retirement: Free Choice or Forced Decision," CESifo Working Paper Series 1542, CESifo Group Munich.
  10. Stephen P. Jenkins, 2000. "Modelling household income dynamics," Journal of Population Economics, Springer, vol. 13(4), pages 529-567.
  11. repec:ese:iserwp:2000-33 is not listed on IDEAS
  12. Van Kerm, Philippe, 2004. "Une évaluation économétrique des flux vers et hors de la pauvreté en Belgique," IRISS Working Paper Series 2004-04, IRISS at CEPS/INSTEAD.
  13. Bart L. W. Cockx, 2000. "Analysis Of Transition Data By The Minimum-Chi-Square Method: An Application To Welfare Spells In Belgium," The Review of Economics and Statistics, MIT Press, vol. 79(3), pages 392-405, August.
  14. Lorenzo Cappellari & Richard Dorsett & Getinet Haile, 2007. "State dependence, duration dependence and unobserved heterogeneity in the employment transitions of the over-50s," DISCE - Quaderni dell'Istituto di Economia dell'Impresa e del Lavoro ieil0049, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
  15. 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.
  16. Lee A. Lillard & Constantijn W. A. Panis, 1998. "Panel Attrition from the Panel Study of Income Dynamics: Household Income, Marital Status, and Mortality," Journal of Human Resources, University of Wisconsin Press, vol. 33(2), pages 437-457.
  17. Desmet, Raphaël & Jousten, Alain & Perelman, Sergio, 2005. "The Benefits of Separating Early Retirees from the Unemployed: Simulation Results for Belgian Wage Earners," IZA Discussion Papers 1571, Institute for the Study of Labor (IZA).
  18. 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.
  19. Arulampalam, Wiji & Booth, Alison L & Taylor, Mark P, 2000. "Unemployment Persistence," Oxford Economic Papers, Oxford University Press, vol. 52(1), pages 24-50, January.
  20. Michele Boldrin & Juan J. Dolado & Juan F. Jimeno & Franco Peracchi, 1999. "The future of pensions in Europe," Economic Policy, CEPR;CES;MSH, vol. 14(29), pages 287-320, October.
  21. repec:ese:iserwp:2006-53 is not listed on IDEAS
  22. Lorenzo Cappellari & Stephen P. Jenkins, 2002. "Modelling Low Income Transitions," Discussion Papers of DIW Berlin 288, DIW Berlin, German Institute for Economic Research.
  23. Van den Berg, Gerard J., 2000. "Duration Models: Specification, Identification, and Multiple Durations," MPRA Paper 9446, University Library of Munich, Germany.
  24. Meyer, Bruce D, 1990. "Unemployment Insurance and Unemployment Spells," Econometrica, Econometric Society, vol. 58(4), pages 757-82, July.
  25. Sveinbjörn Blöndal & Stefano Scarpetta, 1999. "The Retirement Decision in OECD Countries," OECD Economics Department Working Papers 202, OECD Publishing.
  26. Martin Biewen, 2004. "Measuring State Dependence in Individual Poverty Status: Are there Feedback Effects to Employment Decisions and Household Composition?," Discussion Papers of DIW Berlin 429, DIW Berlin, German Institute for Economic Research.
  27. Ambra Poggi, 2007. "Does persistence of social exclusion exist in Spain?," Journal of Economic Inequality, Springer, vol. 5(1), pages 53-72, April.
  28. Ross Finnie & Arthur Sweetman, 2003. "Poverty dynamics: empirical evidence for Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 36(2), pages 291-325, May.
  29. 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.
  30. repec:ese:iserwp:2001-02 is not listed on IDEAS
  31. Maarten Lindeboom, 1998. "Microeconometric Analysis of the Retirement Decision: The Netherlands," OECD Economics Department Working Papers 207, OECD Publishing.
  32. 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.
  33. Hansen, Jörgen & Wahlberg, Roger, 2004. "Poverty Persistence in Sweden," CEPR Discussion Papers 4539, C.E.P.R. Discussion Papers.
  34. Nickell, S J, 1979. "The Effect of Unemployment and Related Benefits on the Duration of Unemployment," Economic Journal, Royal Economic Society, vol. 89(353), pages 34-49, March.
  35. Pablo Antolín & Thai-Thanh Dang & Howard Oxley, 1999. "Poverty Dynamics in Four OECD Countries," OECD Economics Department Working Papers 212, OECD Publishing.
  36. Hansen, Jörgen & Wahlberg, Roger, 2004. "Poverty Persistence in Sweden," IZA Discussion Papers 1209, Institute for the Study of Labor (IZA).
  37. Sueyoshi, Glenn T, 1995. "A Class of Binary Response Models for Grouped Duration Data," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 10(4), pages 411-31, Oct.-Dec..
  38. 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.
  39. Robert Fenge & Pierre Pestieau, 2005. "Social Security and Early Retirement," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262062496, December.
  40. Mark B. Stewart, 2002. "The Inter-related Dynamics of Unemployment and Low Pay," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 B2-4, International Conferences on Panel Data.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:hub:wpecon:200810. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sabine Janssens).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.