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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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Paper provided by LABORatorio R. Revelli, Centre for Employment Studies in its series LABORatorio R. Revelli Working Papers Series with number 1.

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Length: 48 pages
Date of creation: 2001
Date of revision:
Handle: RePEc:cca:wplabo:1
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