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The determinants of poverty transitions in Europe and the role of duration dependence

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  • Eirini Andriopoulou

    () (Hellenic Competition Commission)

  • Panagiotis Tsakloglou

    () (Athens University of Economics and Business)

Abstract

The paper examines the mobility into and out of poverty and identifies the determinants of poverty spell beginnings and endings in 14 European Countries for the period 1994-2000, using the European Community Household Panel. The first part of the paper offers a snapshot of poverty mobility in Europe calculating the entry and exit poverty rates, along with the conditional, to the duration of spell, exit probabilities and re-entry rates to poverty. In the second part observed characteristics of the household and the household head are examined in order to identify the determinants of the transitions into and out of poverty, taking into account unobserved heterogeneity across individuals and duration dependence. Multivariate discrete hazard analysis is used and the duration dependence is captured with time dummies. In almost all the 14 EU Member-States examined, the probability of exiting (re-entering) poverty is inversely related to the duration of the poverty (non-poverty) spell. The effect is significant to the inclusion of variables capturing observed heterogeneity (socioeconomic characteristics of the household head and the household and particular employment and demographic events), as well as to the inclusion of a random effects factor capturing the unobserved heterogeneity across individuals. With regards to the socio-economic variables, in most countries, households headed by young or elderly individuals, as well as households with dependent children are in higher risk of staying longer in poverty. In many cases, event variables improve the model significantly and highlight the mechanisms that bring individuals into and out of poverty.

Suggested Citation

  • Eirini Andriopoulou & Panagiotis Tsakloglou, "undated". "The determinants of poverty transitions in Europe and the role of duration dependence," DEOS Working Papers 1120, Athens University of Economics and Business.
  • Handle: RePEc:aue:wpaper:1120
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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Eirini Andriopoulou & Alexandros Karakitsios & Panos Tsakloglou, 2017. "Inequality and Poverty in Greece:Changes in Times of Crisis," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 116, Hellenic Observatory, LSE.
    2. Aysenur Acar & Cem Baslevent, 2014. "Examination of the Transitions of Households into and out of Poverty in Turkey," Working Papers 015, Bahcesehir University, Betam.
    3. repec:spr:qualqt:v:52:y:2018:i:1:d:10.1007_s11135-016-0464-5 is not listed on IDEAS
    4. Massimo Baldini & Giovanni Gallo & Manuel Reverberi & Andrea Trapani, 2016. "Social transfers and poverty in Europe: comparing social exclusion and targeting across welfare regimes," Center for the Analysis of Public Policies (CAPP) 0145, Universita di Modena e Reggio Emilia, Dipartimento di Economia "Marco Biagi".
    5. Stephen Jenkins & Philippe Van Kerm, 2014. "The Relationship Between EU Indicators of Persistent and Current Poverty," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 116(2), pages 611-638, April.
    6. Birhanu, Mulugeta Y. & Ambaw, Birhanu & Mulu, Yohannis, 2017. "Dynamics of multidimensional child poverty and its triggers: Evidence from Ethiopia using Multilevel Mixed Effect Model," MPRA Paper 79377, University Library of Munich, Germany.
    7. Massimo Baldini & Giovanni Gallo & Manuel Reverberi & Andrea Trapani, 2016. "Social transfers and poverty in Europe: comparing social exclusion and targeting across welfare regimes," Department of Economics 0091, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".
    8. Sırma Demir Şeker & Meltem Dayıoğlu, 2015. "Poverty Dynamics in Turkey," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 61(3), pages 477-493, September.
    9. Sèna Kimm Gnangnon, 2012. "An analysis of duration dependence of government revenue expansions and contractions in Developing Countries," Working Papers halshs-00722083, HAL.
    10. Jenkins, Stephen P. & Van Kerm, Philippe, 2011. "Patterns of persistent poverty: evidence from EU-SILC," ISER Working Paper Series 2011-30, Institute for Social and Economic Research.
    11. Elena Bárcena-Martín & M. Carmen Blanco-Arana & Salvador Pérez-Moreno, 2017. "Dynamics of child poverty in the European countries," Working Papers 437, ECINEQ, Society for the Study of Economic Inequality.
    12. repec:spr:soinre:v:136:y:2018:i:1:d:10.1007_s11205-016-1547-3 is not listed on IDEAS
    13. Sena Kimm GNANGNON, 2012. "An analysis of duration dependence of government revenue expansions and contractions in Developing Countries," Working Papers 201229, CERDI.
    14. Anna Sączewska-Piotrowska, 2016. "Badanie dynamiki ubóstwa gospodarstw domowych z wykorzystaniem wybranych modeli analizy historii zdarzeń," Collegium of Economic Analysis Annals, Warsaw School of Economics, Collegium of Economic Analysis, issue 41, pages 29-46.
    15. Bruno, Bosco & Ambra, Poggi, 2016. "Government effectiveness, middle class and poverty in the EU: A dynamic multilevel analysis," Working Papers 344, University of Milano-Bicocca, Department of Economics, revised 27 Jun 2016.
    16. repec:cep:sticas:/169 is not listed on IDEAS
    17. Raluca Iorgulescu, 2014. "Poverty, Well-Being And Sustainable Development: Official And Experimental Measures In Postmodern Societies," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 1, pages 34-41, February.

    More about this item

    Keywords

    Poverty dynamics; EU;

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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