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Poverty dynamics and disability: An empirical exercise using the European community household panel

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  • Dávila Quintana, C. Delia
  • Malo, Miguel A.

Abstract

In this article, we analyze the influence of being disabled on poverty dynamics. We present results adjusting the modified OECD equivalence scale by the number of adults with severe disabilities in the household and calculate poverty rates with this disability-adjusted scale. In addition we address the problem of incidental parameters in econometric models for the probability of being poor and separate the effects of being disabled on poverty that are short and long-term. The results show that the long-term (‘persistence’) effect is three times the short-term (‘true state dependence’) effect, which has significant social policy implications.

Suggested Citation

  • Dávila Quintana, C. Delia & Malo, Miguel A., 2012. "Poverty dynamics and disability: An empirical exercise using the European community household panel," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 41(4), pages 350-359.
  • Handle: RePEc:eee:soceco:v:41:y:2012:i:4:p:350-359
    DOI: 10.1016/j.socec.2012.04.004
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    References listed on IDEAS

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    1. Jeffrey M. Wooldridge, 2005. "Simple solutions to the initial conditions problem in dynamic, nonlinear panel data models with unobserved heterogeneity," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(1), pages 39-54.
    2. Olga Canto, 2002. "Climbing out of poverty, falling back in: low income stability in Spain," Applied Economics, Taylor & Francis Journals, vol. 34(15), pages 1903-1916.
    3. 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 60-67, March.
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    5. Hernández-Quevedo, Cristina & Jones, Andrew M. & Rice, Nigel, 2008. "Persistence in health limitations: A European comparative analysis," Journal of Health Economics, Elsevier, vol. 27(6), pages 1472-1488, December.
    6. Ambra Poggi, 2007. "Does persistence of social exclusion exist in Spain?," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 5(1), pages 53-72, April.
    7. 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.
    8. Jones, Andrew & O'Donnell, Owen, 1995. "Equivalence scales and the costs of disability," Journal of Public Economics, Elsevier, vol. 56(2), pages 273-289, February.
    9. Francesco Devicienti, 2002. "Poverty persistence in Britain: A multivariate analysis using the BHPS, 1991–1997," Journal of Economics, Springer, vol. 77(1), pages 307-340, December.
    10. van Praag, Bernard M S & Hagenaars, Aldi J M & van Weeren, Hans, 1982. "Poverty in Europe," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 28(3), pages 345-359, September.
    11. Richard V. Burkhauser & Timothy M. Smeeding & Joachim Merz, 1996. "Relative Inequality And Poverty In Germany And The United States Using Alternative Equivalence Scales," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 42(4), pages 381-400, December.
    12. Tania Burchardt, 2000. "The Dynamics of Being Disabled," CASE Papers case36, Centre for Analysis of Social Exclusion, LSE.
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    14. Asghar Zaidi & Tania Burchardt, 2005. "Comparing Incomes When Needs Differ: Equivalization For The Extra Costs Of Disability In The U.K," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 51(1), pages 89-114, March.
    15. McClements, L. D., 1977. "Equivalence scales for children," Journal of Public Economics, Elsevier, vol. 8(2), pages 191-210, October.
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    Citations

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    Cited by:

    1. Agovino, Massimiliano & Ferrara, Maria, 2015. "Disabilità e povertà: il ruolo delle pensioni di invalidità civile. Un'analisi DSGE per i dati italiani
      [Disability and poverty: the role of civilian disability pensions. A DSGE analysis for Italia
      ," MPRA Paper 65616, University Library of Munich, Germany.
    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, March.
    3. Parodi, Giuliana & Sciulli, Dario, 2012. "Disability and Social Exclusion Dynamics in Italian Households," MPRA Paper 42445, University Library of Munich, Germany.
    4. Ke-Mei Chen & Te-Mu Wang, 2015. "Determinants of Poverty Status in Taiwan: A Multilevel Approach," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 123(2), pages 371-389, September.
    5. repec:spr:qualqt:v:51:y:2017:i:4:d:10.1007_s11135-016-0347-9 is not listed on IDEAS
    6. Massimiliano Agovino & Maria Ferrara, 2017. "Can civilian disability pensions overcome the poverty issue? A DSGE analysis for Italian data," Quality & Quantity: International Journal of Methodology, Springer, vol. 51(4), pages 1469-1491, July.

    More about this item

    Keywords

    Disabilities; Equivalence scale; Poverty persistence; Social policy;

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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