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Estimating poverty persistence in Britain

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  • Francesco Devicienti

Abstract

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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Suggested Citation

  • Francesco Devicienti, 2011. "Estimating poverty persistence in Britain," Empirical Economics, Springer, vol. 40(3), pages 657-686, May.
  • Handle: RePEc:spr:empeco:v:40:y:2011:i:3:p:657-686
    DOI: 10.1007/s00181-010-0350-2
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    More about this item

    Keywords

    Poverty persistence; Hazard models; Multiple spells; Unobserved heterogeneity; Variance-components models; I32; C33; C41;
    All these keywords.

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies

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