IDEAS home Printed from https://ideas.repec.org/p/ehl/lserod/6243.html
   My bibliography  Save this paper

Modelling poverty by not modelling poverty: an application of a simultaneous hazards approach to the UK

Author

Listed:
  • Aassve, Arnstein
  • Burgess, Simon
  • Dickson, Matt
  • Propper, Carol

Abstract

We pursue an economic approach to analysing poverty. This requires a focus on the variables that individuals can influence, such as forming or dissolving a union or having children. We argue that this indirect approach to modelling poverty is the right way to bring economic tools to bear on the issue. In our implementation of this approach, we focus on endogenous demographic and employment transitions as the driving forces behind changes in poverty. We construct a dataset covering event histories over a long window and estimate five simultaneous hazards with unrestricted correlated heterogeneity. The model fits the demographic and poverty data reasonably well. We investigate the important parameters and processes for differences in individuals’ poverty likelihood. Employment, and particularly employment of disadvantaged women with children, is important.

Suggested Citation

  • Aassve, Arnstein & Burgess, Simon & Dickson, Matt & Propper, Carol, 2006. "Modelling poverty by not modelling poverty: an application of a simultaneous hazards approach to the UK," LSE Research Online Documents on Economics 6243, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:6243
    as

    Download full text from publisher

    File URL: http://eprints.lse.ac.uk/6243/
    File Function: Open access version.
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Markus Jäntti & Stephen P. Jenkins, 2013. "Income Mobility," SOEPpapers on Multidisciplinary Panel Data Research 607, DIW Berlin, The German Socio-Economic Panel (SOEP).
    2. 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.
    3. Lorenzo Cappellari & Stephen P. Jenkins, 2004. "Modelling Low Pay Transition Probabilities, Accounting for Panel Attrition, Non-Response, and Initial Conditions," CESifo Working Paper Series 1232, CESifo.
    4. Lillard, Lee A & Willis, Robert J, 1978. "Dynamic Aspects of Earning Mobility," Econometrica, Econometric Society, vol. 46(5), pages 985-1012, September.
    5. Lorenzo Cappellari & Stephen P. Jenkins, 2004. "Modelling low income transitions," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 19(5), pages 593-610.
    6. Simon Burgess & Carol Propper & Matt Dickson, 2006. "The analysis of poverty data with endogenous transitions," Fiscal Studies, Institute for Fiscal Studies, vol. 27(1), pages 75-98, March.
    7. Martin Biewen, 2004. "Measuring State Dependence in Individual Poverty Status: Are there Feedback Effects to Employment Decisions and Household Composition?," Discussion Papers of DIW Berlin 429, DIW Berlin, German Institute for Economic Research.
    8. Burgess, Simon & Propper, Carol, 1998. "An Economic Model of Household Income Dynamics, with an Application to Poverty Dynamics among American Women," CEPR Discussion Papers 1830, C.E.P.R. Discussion Papers.
    9. Dickens & David T. Ellwood, 2004. "Whither Poverty in Great Britain and the United States? The Determinants of Changing Poverty and Whether Work Will Work," NBER Chapters, in: Seeking a Premier Economy: The Economic Effects of British Economic Reforms, 1980–2000, pages 313-370, National Bureau of Economic Research, Inc.
    10. Maggio, Guido, 2004. "Multidimensional analysis of poverty dynamics in Great Britain," ISER Working Paper Series 2004-10, Institute for Social and Economic Research.
    11. Stevens, Ann Huff, 1994. "The Dynamics of Poverty Spells: Updating Bane and Ellwood," American Economic Review, American Economic Association, vol. 84(2), pages 34-37, May.
    12. 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.
    13. Lee Lillard & Linda Waite, 1993. "A joint model of marital childbearing and marital disruption," Demography, Springer;Population Association of America (PAA), vol. 30(4), pages 653-681, November.
    14. Peter Gottschalk & Sheldon Danziger, 2003. "Wage Inequality, Earnings Inequality and Poverty in the U.S. Over the Last Quarter of the Twentieth Century," Boston College Working Papers in Economics 560, Boston College Department of Economics.
    15. 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.
    16. Arnstein Aassve & Simon Burgess & Carol Propper & Matt Dickson, 2006. "Employment, family union and childbearing decisions in Great Britain," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 169(4), pages 781-804, October.
    17. Burtless, Gary, 1999. "Effects of growing wage disparities and changing family composition on the U.S. income distribution," European Economic Review, Elsevier, vol. 43(4-6), pages 853-865, April.
    18. Lillard, Lee A., 1993. "Simultaneous equations for hazards : Marriage duration and fertility timing," Journal of Econometrics, Elsevier, vol. 56(1-2), pages 189-217, March.
    19. Burgess, Simon & Propper, Carol, 1998. "An Economic Model of Household Income Dynamics, with an Application to Poverty Dynamics among American Women," CEPR Discussion Papers 1830, C.E.P.R. Discussion Papers.
    20. Stephen P. Jenkins, 2000. "Modelling household income dynamics," Journal of Population Economics, Springer;European Society for Population Economics, vol. 13(4), pages 529-567.
    21. Dawn Upchurch & Lee Lillard & Constantijn Panis, 2002. "Nonmarital childbearing: Influences of education, marriage, and fertility," Demography, Springer;Population Association of America (PAA), vol. 39(2), pages 311-329, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Marjan, MAES, 2008. "Poverty persistence among Belgian elderly in the transition from work to retirement : an empirical analysis," Discussion Papers (ECON - Département des Sciences Economiques) 2008042, Université catholique de Louvain, Département des Sciences Economiques.
    2. Elena Giarda & Gloria Moroni, 2018. "The Degree of Poverty Persistence and the Role of Regional Disparities in Italy in Comparison with France, Spain and the UK," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 136(1), pages 163-202, February.
    3. Andriopoulou, Eirini & Tsakloglou, Panos, 2011. "The Determinants of Poverty Transitions in Europe and the Role of Duration Dependence," IZA Discussion Papers 5692, Institute of Labor Economics (IZA).
    4. Francesco Devicienti, 2011. "Estimating poverty persistence in Britain," Empirical Economics, Springer, vol. 40(3), pages 657-686, May.
    5. Maes, Marjan, 2008. "Poverty persistence among Belgian elderly: true or spurious?," ISER Working Paper Series 2008-24, Institute for Social and Economic Research.
    6. Ambra Poggi, 2007. "Does persistence of social exclusion exist in Spain?," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 5(1), pages 53-72, April.
    7. Pérez-Mayo, Jesús, 2009. "Un análisis dinámico de la privación en España /A Dynamic Analysis of Deprivation for Spain," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 27, pages 501-522, Agosto.
    8. Sara Ayllón, 2013. "Understanding poverty persistence in Spain," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 4(2), pages 201-233, June.
    9. Francesco Devicienti, 2002. "Poverty persistence in Britain: A multivariate analysis using the BHPS, 1991–1997," Journal of Economics, Springer, vol. 9(1), pages 307-340, December.
    10. Bigsten, Arne & Shimeles, Abebe, 2008. "Poverty Transition and Persistence in Ethiopia: 1994-2004," World Development, Elsevier, vol. 36(9), pages 1559-1584, September.
    11. FUSCO Alessio & ISLAM Nizamul, 2012. "Understanding the drivers of low income transitions in Luxembourg," LISER Working Paper Series 2012-31, Luxembourg Institute of Socio-Economic Research (LISER).
    12. Philippe Kerm, 2002. "How much low income turnover is there in Belgium?," Journal of Economics, Springer, vol. 9(1), pages 341-363, December.
    13. repec:dau:papers:123456789/4994 is not listed on IDEAS
    14. Stephanie Riegg Cellini & Signe-Mary McKernan & Caroline Ratcliffe, 2008. "The dynamics of poverty in the United States: A review of data, methods, and findings," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 27(3), pages 577-605.
    15. P. Jenkins, Stephen & Gardiner, Karen & Burgess, Simon & Propper, Carol, 2000. "Measuring income risk," ISER Working Paper Series 2000-15, Institute for Social and Economic Research.
    16. Arnstein Aassve & Simon Burgess & Carol Propper & Matt Dickson, 2006. "Employment, family union and childbearing decisions in Great Britain," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 169(4), pages 781-804, October.
    17. Olga Cantó & Coral del Río & Carlos Gradín, 2007. "What helps households with children in leaving poverty? Evidence from Spain," Research on Economic Inequality, in: Inequality and Poverty, pages 1-29, Emerald Group Publishing Limited.
    18. Islam, Nizamul & Shimeles, Abebe, 2007. "Poverty dynamics in Ethiopia: state dependence," Working Papers in Economics 260, University of Gothenburg, Department of Economics.
    19. Martin Biewen, 2004. "Measuring State Dependence in Individual Poverty Status: Are there Feedback Effects to Employment Decisions and Household Composition?," Discussion Papers of DIW Berlin 429, DIW Berlin, German Institute for Economic Research.
    20. Martin Biewen, 2009. "Measuring state dependence in individual poverty histories when there is feedback to employment status and household composition," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 24(7), pages 1095-1116, November.
    21. Francesco Devicienti & Valentina Gualtieri & Mariacristina Rossi, 2014. "The Persistence Of Income Poverty And Lifestyle Deprivation: Evidence From Italy," Bulletin of Economic Research, Wiley Blackwell, vol. 66(3), pages 246-278, July.

    More about this item

    Keywords

    poverty dynamics; poverty transitions; simultaneous hazards;
    All these keywords.

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ehl:lserod:6243. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: LSERO Manager (email available below). General contact details of provider: https://edirc.repec.org/data/lsepsuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.