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Estimating poverty persistence in Britain

  • Francesco Devicienti

    ()

This paper uses longitudinal data from the BHPS, waves 1-8, to document low-income dynamics and persistence for individuals living in Britain in the 1990s. Poverty exit and re-entry rates are estimated and the resulting distribution of time spent in poverty is calculated, both in single and in multiple-spells frameworks. Following Stevens (1999), I estimate a multiple-spell model of transitions in and out of poverty, controlling for observed and correlated unobserved individual heterogeneity and for a potential initial condition problem. Both hazard rate and components-of-variance models are used to predict the number of years in poverty for various subgroups of the populations.

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File URL: http://hdl.handle.net/10.1007/s00181-010-0350-2
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Article provided by Springer in its journal Empirical Economics.

Volume (Year): 40 (2011)
Issue (Month): 3 (May)
Pages: 657-686

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Handle: RePEc:spr:empeco:v:40:y:2011:i:3:p:657-686
DOI: 10.1007/s00181-010-0350-2
Contact details of provider: Web page: http://www.springer.com

Order Information: Web: http://www.springer.com/economics/econometrics/journal/181/PS2

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  1. Lorenzo Cappellari & Stephen P. Jenkins, 2002. "Modelling Low Income Transitions," Discussion Papers of DIW Berlin 288, DIW Berlin, German Institute for Economic Research.
  2. Baker, Michael, 1997. "Growth-Rate Heterogeneity and the Covariance Structure of Life-Cycle Earnings," Journal of Labor Economics, University of Chicago Press, vol. 15(2), pages 338-375, April.
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  4. 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.
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  7. Ondrich, Jan & Rhody, Stephen E., 1999. "Multiple spells in the Prentice-Gloeckler-Meyer likelihood with unobserved heterogeneity," Economics Letters, Elsevier, vol. 63(2), pages 139-144, May.
  8. Devicienti, Francesco, 2001. "Poverty persistence in Britain: a multivariate analysis using the BHPS, 1991-1997," ISER Working Paper Series 2001-02, Institute for Social and Economic Research.
  9. Joseph G. Altonji & Lewis M. Segal, 1994. "Small sample bias in GMM estimation of covariance structures," Working Paper Series, Macroeconomic Issues 94-8, Federal Reserve Bank of Chicago.
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  11. Devicienti, Francesco, 2002. "Estimating Poverty Persistence in Britain," Royal Economic Society Annual Conference 2002 61, Royal Economic Society.
  12. Fertig, Michael & Tamm, Marcus, 2007. "Always Poor or Never Poor and Nothing in Between? Duration of Child Poverty in Germany," IZA Discussion Papers 2645, Institute for the Study of Labor (IZA).
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  17. 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.
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  23. 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.
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  25. Lillard, Lee A & Willis, Robert J, 1978. "Dynamic Aspects of Earning Mobility," Econometrica, Econometric Society, vol. 46(5), pages 985-1012, September.
  26. Jenkins, Stephen P, 1995. "Easy Estimation Methods for Discrete-Time Duration Models," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 57(1), pages 129-138, February.
  27. Meyer, Bruce D, 1990. "Unemployment Insurance and Unemployment Spells," Econometrica, Econometric Society, vol. 58(4), pages 757-782, July.
  28. Hansen, Jörgen & Wahlberg, Roger, 2004. "Poverty Persistence in Sweden," IZA Discussion Papers 1209, Institute for the Study of Labor (IZA).
  29. Cappellari, Lorenzo, 2000. "The Covariance Structure of Italian Male Wages," Manchester School, University of Manchester, vol. 68(6), pages 659-684, December.
  30. Gottschalk, Peter & Moffitt, Robert A, 1994. "Welfare Dependence: Concepts, Measures, and Trends," American Economic Review, American Economic Association, vol. 84(2), pages 38-42, May.
  31. 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.
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