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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. Poverty persistence predictions are also produced for various subgroups of the populations. To do this, 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. Components-of-variance models are also used to predict the number of years in poverty for the targeted groups. The two sets of predictions are then compared.

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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
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