Understanding the drivers of low income transitions in Luxembourg
AbstractWe analyse the determinants of poverty transitions, defined as movements across a low income threshold, in Luxembourg. Data used are those from the Luxembourg socioeconomic panel ?Liewen zu Lëtzebuerg? (PSELL3) running from 2003 to 2009. Using an endogenous switching first-order Markov model, we control for potential endogeneity to low income transitions due to both initial condition and non random attrition. We find that employment protects from both remaining poor and entering poverty. In addition, attrition and initial low income are found to be endogenous processes with respect to low income transitions. Finally, genuine state dependence accounts for a substantial level of aggregate state dependence.
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Bibliographic InfoPaper provided by CEPS/INSTEAD in its series CEPS/INSTEAD Working Paper Series with number 2012-31.
Length: 40 pages
Date of creation: Jul 2012
Date of revision:
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More information through EDIRC
poverty dynamics; Luxembourg; Markov transitions models; attrition; initial conditions; state dependence;
Find related papers by JEL classification:
- I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-08-23 (All new papers)
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